A hotel tax is coming to Mississauga and the city hopes it will help attract visitors

The city of Mississaugais introducing afour per cent hotel tax next summer and says the money will go toward attracting more visitors and boostingtourism.

The tax, approved by city council this week, is consistent with a four per cent rate also under consideration by the city of Toronto, and could be the first wave in a tax change right across the Greater Toronto Area. If approved, it would come into effect in July 2018.

The measure is estimated to generate close to $10 million annually between Toronto and Mississauga. Half of that revenue would go to Tourism Torontoand the other half would be reinvested in Mississauga's "master plan" to attract more visitors,according to Mayor Bonnie Crombie. Tourism Toronto is a not-for-profit agency consisting of public and private partners with over 1,100 members of which the city of Mississauga is one.

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"Think of it as a user fee," Crombie told CBC Toronto, saying the rate would be consistent with the rate that Toronto is considering, "so that our hotels can be competitive with their hotels."

Crombie says the tax was made possible through the province's Stronger, Healthier Ontario Act, Bill 127, which went into effect this past May. But while Toronto hasn't yet moved on a tax, Mississauga is forging ahead. Crombiesays it willgenerate a new revenue stream for the city, which unlike Toronto, does not generate revenue through a land-transfer tax or vehicle-registration tax.

Crombie expects the revenue tool willstrengthen Mississauga's tourism industry, including its cultural attractions, festivalsand sporting events. But some worry it will do just the opposite.

"That's going to be expensive for clients because when you get a hotel room it's already expensive. To promote tourism in the city I think that you can use other methods," said touristMinh Va.

"I think if you lower prices and create deals for tourists that will bring more people into a city."

And it isn't just hotels that will be taxed. Crombie says short-term rentals, such as AirBnB, would also face the four per cent fee as Mississauga moves to regulate them.

That's something Mississauga resident Nima Parsa worries could make things harder for what he sees as an already struggling industry.

"These days I know hotels are struggling especially AirBnBs, so if you want to add taxes ...it's going to be harder for them," she said.

City staff will be meeting with hotel industry stakeholders in the coming months and Crombie says consultations will be held before the tax is implemented.

The recommendations go to council for final approval on Nov. 8.