The GNWT has drafted its legislation to allow an accommodation levy in cities including Yellowknife, Hay River, Fort Smith, Fort Simpson, Norman Wells and Inuvik.
The levy, first proposed in 2010, would collect a marginal tax on accommodations to be reinvested in local tourism initiatives and promotion, said Gary Schauerte, director of corporate affairs for the GNWT's department of municipal and community affairs (MACA).
The department received approval for a proposed law, and is currently working with the Justice Department to prepare a bill to put before the legislative assembly as early as later this month or June, said Schauerte.
The six eligible jurisdictions would be able to bring in a levy because they are municipal taxation authorities with “economies of scale” to support such a tax, he said.
Before the city can establish a levy, the GNWT must give extra authority to the city by making changes to the Cities, Towns and Villages Act.
The City of Yellowknife is one of the last Canadian cities to not have an accommodation levy in place, said Kerry Penney, the city's director of communications and economic development.
Any tax levy in Yellowknife would fund a destination marketing organization to grow the number of visitors to the city, said Penney.
An online survey by the city revealed respondents favoured a levy between two and three per cent.
In 2016, tourism contributed more than $90 million to the economy and more than 1,000 jobs, stated a news release from the city.
“One of the economic objectives of council is diversity. There appears to be less emphasis on mining and this appears to be one way to grow the economy and diversify,” said Penney.
“Every month that we don't have the ability to collect this levy, that's funds that we'll never be able to collect. Every month that hotels are fully occupied, that's money we can't recoup,” she said.
Any prospective levy would be subject to public input, but unlike cannabis legislation is not “reinventing the wheel,” she said.
“We're eager and excited to see this legislation be passed. We're one of the last places in Canada that doesn't have destination marketing,” said Penney.
MACA is considering how other jurisdictions have instituted levies. The rates range anywhere from one to five per cent.
Individual municipalities can decide the specific parameters of where to invest the proceeds so long as they stay within the tourism envelope. That includes initiatives like destination marketing services and promotion.
Their return on investment from accommodation levies is staggering: every dollar invested in tourism generates a $67 return, said Deneen Everett, executive director of the Yellowknife Chamber of Commerce.
At a chamber event this week, that point was driven home by Bank of Canada Governor Stephen Poloz, who said the Northwest Territories has to grow tourism.
Everett said despite Yellowknife's burgeoning tourism industry, the industry is being held back from its full potential by a lack of investment.
“We still don't have the infrastructure to support these tourists,” said Everett. “That's why were supporting the City of Yellowknife to enact this tourism tax levy.”
“The wait for a levy has been “disheartening,” she said.
“I think there is a lot of optimism about the role that tourism can play. It will be a really nice supplement. It's not going to replace mining which is a pillar of our industry up here."
The tourism levy has been on the table for quite some time, since 2010 to be exact, said said Frame Lake MLA Kevin O'Reilly in an interview with Yellowknifer.
“It's already been implemented in other jurisdictions in a way to support the tourism industry,” said O'Reilly.
Some of the consequences of an underfunded tourism industry are the interim visitor's centre, currently being run out of the basement of city hall, said O'Reilly.
“If anyone has been to the so-called visitor's centre in city hall, it's not what it could or should be,” he said.
“(Industry Tourism and Investment) has not shown an adequate level of support or interest in supporting tourism in Yellowknife. It's one part of our economy that is growing and has enormous potential and our government is ignoring it,” said O'Reilly.
In comparison, the Yukon government puts more into its visitor's centre in Dawson alone than the GNWT puts into all of Yellowknife, he said.
The GNWT cannot rely exclusively on mining revenue because it is vulnerable to fluctuating commodity prices, said O'Reilly.
“We've seen the impact of that locally when diamond prices have dipped. We have very little control over that,” he said. “You can subsidize mining operations as much as you like but we cannot live on mining alone.”
“One part of our economy that has been growing is tourism and our government has not shown the support to diversify our economy,” said O'Reilly.
“Anybody who's been in downtown Yellowknife after 10 p.m. can see that buses lined up. You can see that there is money going into our economy,” he said.