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Comfort Inn Toronto Northeast
Government Relations > Proposed Hotel/ Lodging Tax
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Proposed Hotel/ Lodging Tax
City of Toronto Revenue Tools: Hotel/ Lodging Tax

The City of Toronto is currently reviewing a variety of new revenue tools including a hotel/lodging tax on room revenue in all hotels in the City of Toronto  

As the City currently does not have the authority to implement a hotel/ lodging tax they are considering a request to the province to amend the City of Toronto Act (COTA) to provide them the taxation authority. The GTHA is opposed to any amendments to the City of Toronto Act and the Ontario Municipal Act that would provide the City of Toronto or any municipality the power to implement a hotel/lodging tax. In addition, there are a variety of other proposed taxes which would impact the hotel community such as Beverage Alcohol Tax, Parking Tax.

The City of Toronto Act is very clear as Section 267 (6) states:

 “The city is not authorized to impose any of the following taxes:  

 6. A tax imposed on a person in respect of lodging in or the use of the rooms or other facilities of a hotel, motel, hostel, apartment house, lodging house, boarding house, club or other similar type of accommodation, including a tax in respect of services provided by the owner of the accommodation that are related to the lodging or that are related to the use of the rooms or other facilities, but not a tax described in subparagraphs 5 i to iv.:”

The GTHA is opposed to any amendments to COTA that will allow the City to implement a lodging/ hotel tax and supports the current exclusion under Section 267 (6) of the Act. 

The Toronto accommodation industry participates in a very competitive international, national and provincial marketplace. The Toronto region tourism sector is a major contributor to the region’s economy with total visitor spending of $7.2 billion in 2015.  This spending is across a range of businesses including accommodations, attractions; restaurants, taxis, retail and entertainment which combined employ 315,000 people. 

Any addition of a new hotel/lodging tax will cause job loss, reduction of foreign direct investment in the hotel industry and other economic harm.


On December 13th, Toronto City Council met to discuss the City’s Long-Term Financial Plan and new revenue tools.

At this meeting the City of Toronto Council voted in favor of requesting the authority from the Province of Ontario to implement a hotel tax of 4%.  The hotel tax revenues will be used by the City for their operating budget, not for any of the $33 billion capital requirements. 

The resolution passed at City Council also included the implementation of a tax on lodging applied to short-term rentals and requested that the City Manager report back on a recommended tax rate no higher than 10%.

The City of Toronto does not have the authority to implement a hotel/ lodging tax under the City of Toronto Act (COTA). The City of Toronto has requested from the Province of Ontario a legislative amendment to COTA to provide them the authority for a hotel tax.

The GTHA opposes any amendments to the COTA by the Provincial Government to give the City the authority to implement a hotel/ lodging tax. 

Council also voted in favor of requesting the authority from the Province to implement road tolls on the Gardiner Expressway and Don Valley Parkway. The Province has declined this request.

GTHA will continue to keep its membership informed on this important issue. 

A study has been prepared for the City of Toronto by KPMG evaluating the potential revenue tools, including the hotel/ lodging tax. The full study can be found here.

KPMG 2nd Report: Additional Economic Assessment November 2016