Toronto needs help paying for the 2026 FIFA World Cup and will lean on the city’s hotel industry to cover costs.
City council voted to increase the municipal accommodation tax — which applies to hotels and short-term rentals like Airbnb — to 8.5 per cent from six per cent for 14 months, from June 2025 until the end of July 2026.
The 2026 FIFA World Cup runs from June 11 to July 19, 2026. Toronto hosts six games between June 12 and July 2, including the Canadian Men’s National Team opening game on June 12.
Hosting duties are a drain on city coffers. It’s expected to cost about $380 million to host the six matches Toronto was allotted for the event. The provincial and federal governments are stepping in with over $200 million, leaving the city on the hook for the remaining $180 million.
The city has an existing plan to raise $84 million through commercial rights sales, rental fees and more. Council still needs to find $95 million to cover its portion of the tournament’s costs.
Temporarily raising the hotel tax will bring in over $56 million, according to a staff report. It will add just over $3 to the nightly cost of a typical hotel stay, which costs an average of $228 per night.
Toronto started taxing hotel stays in 2018 with a four per cent levy. It rose to six per cent in 2022, where it currently sits.
With the temporary increase to 8.5 per cent, the tax “will be more than doubled in less than two years,” said the Ontario Restaurant, Hotel and Motel Association (ORHMA) in a letter to council. “We feel this is unwarranted.”
ORHMA also said it’s concerned the revenue won’t be fully reinvested in programs that foster tourism growth, like Destination Toronto. Instead, it’s mostly going to general revenue.
“Such investments not only benefit the tourism sector but also have a positive ripple effect to the huge supply chain including on retail, manufacturing, and various other services, ultimately boosting trade and visitor returns,” the letter said.
The Greater Toronto Hotel Association expressed concern that the increase will hurt “Toronto’s competitiveness in the international tourism market” as the sector struggles to recover from COVID.
Coun. Shelley Carroll, the city’s budget chief, tried to cap the tax increase at eight per cent during the committee process but was voted down by her fellow councillors.
