I did a little searching and found mention of this.
http://www.niagarafalls.ca/tourism/index.asp
This is a little blurb from the above site.
Destination Marketing Fee (DMF)
Is the 3% Destination Marketing Fee (DMF) or Destination Promotion Fee (DPF) a Tax?
No, the fee is not a tax. It is a voluntary fee that is collected by establishments for additional marketing. As of 2004, the fee applies to guests rooms rented for less than 30 days. These legislated levies are automatically applied to a guest’s hotel bill.
What other Cities have a DMF or similar fees?
Many major North American cities have hotel taxes. Toronto, Hamilton, Ottawa, Edmonton are examples of different cities that collect a DMF from visitors. Others include Victoria, Quebec City, New York and Chicago.
What do the establishments do with the money raised from the DMF?
In Niagara Falls the money they generate is earmarked for advertising and other initiatives to attract more tourists and deliver more services to visitors while in the City. The fee, when used for marketing, promotion and Destination enhancements, will ensure that Niagara Falls continues to be promoted as a must see destination and that visitor experiences in our destination will be enhanced through additional programming and special events