Staycation tax credit for 2022 looks to incentivize tourism travel

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With the tourism and hospitality sector reeling financially after two years of lockdowns and restrictions due to COVID-19, a new provincial tax credit for leisure travel accommodations is welcome news, according to local tourism officials.

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Ontario’s “staycation” tax credit, which came into effect Jan. 1, will allow Ontario residents to claim up to 20 per cent of eligible leisure accommodation expenses for stays between Jan. 1 and December 31, 2022, when filing personal 2022 income tax returns .

Individuals will be able to claim up to $1,000 and families can claim up to $2,000 for a maximum credit of $200 and $400 respectively.

Gordon Orr, chief executive officer for Tourism Windsor Essex Pelee Island, said the credit will be a boost to the industry locally.

“It is basically an incentive to help encourage travel, of course when it’s safe to do so, and it is also to give more money back to Ontario residents to help offset the cost of that travel,” said Orr, who was appointed by Lisa MacLeod, Ontario’s Minister of Tourism, Culture and Sport, to the task force that recommended the tax credit and how it could be used.

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“We know that people are eager to travel. We know that they want to get out there and spend money,” he said.

“We know that people will probably still want to stay somewhat closer to home and all of those conditions play well into the Ontario staycation tax credit.”

The tax credit can be applied to many forms of accommodation including hotel, motel, a resort, a lodge, a bed and breakfast establishment, a cottage and a campground.

Orr said the provincial government set aside $270 million in a funding envelope for the program.

“We recognize that we want people to enjoy the Province of Ontario,” he said. “And we know the longer that they stay — meaning an overnight visit — the longer the stay, the more money they’ll spend in that particular region … on meals, entertainment attractions, tours, gas/transportation, touching all aspects of tourism and hospitality industry, which is why the overnight component to receive tax credit is so crucial.”

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In Windsor and Essex County, Orr said spring and summer are the primary tourist seasons and local marketing efforts are focusing on travel packages with hoteliers and the promotion of the tax credit.

“I do want to commend the province of Ontario and in particular the Minister of Tourism Lisa MacLeod because this $270 million is just but one of a number of funding envelopes that they’ve put to encourage and help support the tourism and hospitality industry during this time,” Orr said.

“Because we do know that travel is usually a discretionary expense… considered a luxury in a lot of cases.

“This will encourage travel because you get a monetary benefit in return.”

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