Municipal Services Corporation

The Municipality of Lambton Shores plans to implement a transient accommodation tax, more commonly known as a Municipal Accommodation Tax (MAT), in January 2026. As part of this process, the Municipality is proposing the incorporation of a not-for-profit Municipal Services Corporation to be the designated tourism entity for MAT revenue sharing in Lambton Shores.

The Municipality is looking for public input to help develop a Municipal Services Corporation. The feedback received will help provide direction on how the corporation can effectively support tourism efforts in Lambton Shores. Please find additional information below, which will provide some necessary background information to assist you with the public survey.

On this page:
  1. About the Municipal Accommodation Tax
  2. About Municipal Services Corporations
  3. Creating a Municipal Service Corporation: Public Consultation Survey
  4. Frequently Asked Questions
  5. Relevant Resources and Reports
  6. Next Steps
What is MAT?
The Municipal Accommodation Tax

Municipal Accommodation Tax (MAT) is a tax imposed by a municipality on the price of overnight accommodations in its jurisdiction. MAT is typically applied to hotels, motels, and other short-term rental lodging establishments, and is collected from guests at the time of their booking.

The primary purpose of the MAT is to generate additional revenue for the municipality to support various initiatives, such as tourism promotion, tourism-related infrastructure, and tourism product development, which directly or indirectly benefit both visitors and residents.

By implementing this tax on accommodations, municipalities can fairly distribute the costs of hosting tourists and maintaining tourism-related amenities.
How is MAT Distributed?
Municipal Accommodation Tax Distribution

When MAT is collected, the Municipality keeps 50 per cent of the revenue generated. The remaining 50 per cent must be shared with a designated Eligible Tourism Entity, which is a non-profit entity whose mandate includes the promotion of tourism in Ontario or in a municipality.

For example: if $100,000 was collected through the MAT:

  • $50,000 would be distributed to the tourism entity; and
  • $50,000 would be retained by the Municipality to assist with things like infrastructure projects or other tourism-related amenities or municipal services

The Municipality is proposing the creation of a Municipal Services Corporation to be the designated Eligible Tourism Entity in Lambton Shores.

 
Why a Municipal Services Corporation?

The primary purpose for implementing the MAT in Lambton Shores is to boost tourism efforts in the Municipality. At the same time, it will alleviate some of the financial pressures associated with tourism on infrastructure and municipal services. By establishing a Municipal Services Corporation (MSC) as the designated tourism entity for Lambton Shores, we ensure that every dollar generated through the Municipal Accommodation Tax (MAT) is reinvested directly into our community.

While there are broader regional or provincial organizations that provide tourism marketing for the area, creating an MSC helps ensure funding stays local to support specific and tangible tourism initiatives that directly benefit our businesses, accommodation providers, and residents. It will also ensure local community members are represented in the decision-making process regarding the application of MAT funds.

With a dedicated tourism entity rooted in Lambton Shores, we can strategically invest in marketing, infrastructure, and other experiences that attract visitors, extend stays, and enhance our reputation as a year-round destination for tourism. This structure will also provide greater transparency, accountability, and measurable results—ensuring that tourism revenue works for Lambton Shores.

Read the Draft Business Case Study: Municipal Services Corporation

Public Consultation: Creating a Municipal Services Corporation

Public input is essential in developing an effective Municipal Services Corporation. The Municipality is seeking feedback to help ensure the corporation is structured to successfully support and shape the future of tourism development in Lambton Shores.

The deadline to submit your feedback using the survey is Friday, May 16, 2025.

Complete the online Municipal Services Corporation Survey

Next Steps

Timeline of next steps

Frequently Asked Questions
What is the Municipal Accommodation Tax (MAT)?

A MAT is a mandatory municipal tax paid on accommodations. Travelers must pay the amount that is stipulated by the municipality. Many municipalities in Ontario have already implemented a MAT and the majority of municipalities have implemented a 4% MAT.
Under what authority does the accommodation operator have to charge/collect the Municipal Accommodation Tax?

The authority for accommodation operators to charge and collect the MAT comes from Ontario's Municipal Act, 2001:

  • Section 400.1 grants municipalities the power to impose a transient accommodation tax through by-law

Once a municipality passes a Municipal Accommodation Tax By-Law, all accommodation providers within that jurisdiction are legally required to collect the tax from guests and remit it to the municipality or its designated collection agent.
Is the Municipal Accommodation Tax voluntary? Or is it a mandatory tax? 
Once a MAT By-Law is passed by council, the tax is mandatory.
How is the Municipal Accommodation Tax collected?

MAT is collected by the accommodation provider at the time of booking. The accommodation provider then remits the MAT to the Municipality based on a remittance schedule outlined in a MAT collection by-law.

More information about this process will be shared in the future.
I have more questions about the Municipal Accommodations Tax.

While we understand there will be several logistical and technical questions related to the MAT, the Municipality is currently seeking public input on the creation of a Municipal Services Corporation.

As this process moves forward, there will be a separate communications campaign specific to the MAT and the collection, remittance, and other logistics around it.
What is an Eligible Tourism Entity?

Ontario Regulation 435/17 requires a 50/50 revenue sharing between a municipality and an Eligible Tourism Entity. An Eligible Tourism Entity is defined in Ontario Regulation 435/17 as a non-profit entity whose mandate includes the promotion of tourism in Ontario or a municipality.
What is a Municipal Services Corporation?

A Municipal Services Corporation (MSC) is a separate, legally incorporated entity established by a municipality and operates independently with a separate bank account. Under Ontario’s Municipal Act, 2001, municipalities can create MSCs to oversee projects such as economic development, tourism promotion, infrastructure management, and public utilities. The corporation operates at arm’s length from the municipality but remains accountable through governance structures, financial reporting, and municipal oversight.

In the case of the MAT in Lambton Shores, the proposed MSC would serve as the designated tourism entity. Some advantages include: 

  1. Satisfying the Province’s requirement for a non-profit tourism organization to serve as an Eligible Tourism Entity that utilizes a minimum of 50% of the MAT revenues; and
  2. Adopting a MSC model, which provides accountability, corporate responsibility and reasonable controls through the role of the voting members
What is the anticipated revenue from the MAT?
Revenue can vary year by year. Based on current estimations using average nightly rentals in Lambton Shores, staff expect that revenue generated from MAT in Lambton Shores could be as high of $400,000 annually (to be split with the designated tourism entity).

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