(Quebec) The legal battle is not over over the controversial Percé tourist tax. The Gaspé town announces that it will appeal a judgment of the Superior Court, with the “unreserved” support of the Union of Quebec Municipalities (UMQ).
“This is a debate that goes beyond the borders of the City of Percé and which concerns the powers of all municipalities in Quebec,” said the mayor of Percé, Cathy Poirier, in a press release.
PHOTO FRANÇOIS ROY, LA PRESSE ARCHIVES
The Mayor of Percé, Cathy Poirier.
The Superior Court declared on June 16 that the regulation which instituted a tourist tax in Percé was not legal. She therefore ruled in favor of the traders who had brought the case to court.
Judge Isabelle Germain concluded that the municipality exceeded its powers and contravened the Cities and Towns Act with its rules imposing a $1 royalty on every $20 purchase made by visitors.
The decision had a big impact in the municipal world. This cause is “crucial”, notes the UMQ in a press release sent Thursday. The court’s decision could have “significant repercussions” for all municipalities, which are desperately looking for ways to increase their revenues.
“This is why we unreservedly support Mayor Cathy Poirier and the Percé City Council, and we will continue to follow developments in the file very closely,” declared UMQ President Martin Damphousse.
Percé has announced that it will suspend the royalty until the Court of Appeal decides.
Powers obtained in 2017
This whole affair will be followed with interest by municipalities across Quebec, which are seeking to increase their revenues thanks to new powers obtained in 2017.
This is the case of Percé, which receives half a million tourists each year, attracted in particular by its famous rock. The city of 3100 inhabitants must maintain a range of infrastructures to accommodate all these people. At City Hall, we are looking for ways to increase revenue.
The municipality therefore decided in September 2021 to set up a tourist fee. The first draft of the rules asked merchants to collect $1 each time a visitor purchased more than $20 from their business.
But there is a catch. According to the court, the law does not allow municipalities to unilaterally transform merchants into royalty collectors. She must have their agreement, which was not the case in Percé.
“If the municipality fails to collect the fee itself, it can enter into an agreement with a third party or the State for the collection of it,” notes Judge Germain.
The City of Percé was made aware of this fact before the trial by a legal opinion from the UMQ. So city council changed the bylaw in June 2022 to make merchants pay — turn them into debtors — every time a visitor pays more than $20 to their business. The trader was therefore free to pass on the fee to the tourists, but was not obliged to do so.
This modification did not convince the judge, who considered it “purely cosmetic”.
“The fee is defined in Larousse as a ‘sum due in return for the use of a public service’. However, it seems clear that it is not the merchants who use the targeted public services, but the visitors, ”we can read in the decision dated June 16.
“It is the presence of many visitors to Percé that creates the need for tourist infrastructure and not the presence of merchants,” added the judge.