TORONTO — The Hotel Association of Canada (HAC) presented its case for the need for proper tax regulations and fairness on short-term rentals last week, claiming hosts on platforms such as Airbnb are evading the taxes traditional accommodation businesses have to pay.
“We welcome the competition and understand that consumer’s choice is a good thing, but what we’re talking about is fairness,” said Alana Baker, director of Government Relations, HAC. “It doesn’t make any sense for hotels, who are good corporate citizens and paying taxes and abiding by the rules while someone else is doing the exact same thing but aren’t subjected to the same rules. It’s really about fairness. We’re looking to be a on a level playing field with platforms like Airbnb.”
Her comments followed a pre-budget meeting held last week at the Radisson Admiral in downtown Toronto. They also follow the release of a HAC study, which revealed Canadians have serious reservations about the impact of short-term rentals, such as Airbnb, on their communities.
Johnathan C. Lund, vice chair of the HAC and regional VP at InterContinental Hotels Group (IHG), noted that more than 60 per cent of Canadians are concerned about neighbouring homes being rented.
At a time when Canadians and foreign buyers are acquiring multiple condo units and offering them exclusively on short-term rental sites, the HAC appealed to government MPs, discussing the need for taxation and regulation for these digital platforms.
“What started as a true home sharing, where the owner is present during the guest stay, has expanded into growing commercial operations,” said Lund. “Over the last two years, the commercial side of Airbnb — those renting multi-unit entire homes — grew by 108 per cent. Clearly, these hosts are running a business through Airbnb.”
Lund added that guests of legitimate Canadian hotel properties contributed an estimated $2.2-billion in consumer taxes and fees on room revenues alone. And, if the same rates were applied to Airbnbs, the sector could contribute an extra $100-million to the Canadian economy.
According to the study, only one per cent of Canadians believe that Airbnb has a positive impact on their neighbourhood’s quality of life and more than three-in-five feel concern about a neighbouring home being regularly rented on Airbnb.
“Airbnb and similar online short-term-rental platforms have an impact beyond the host that rents out a property and the person that stays there,” Baker noted. “It’s important that regulators and elected representatives consider the effect that these platforms have on the community and its members as they move forward to consider regulations. Canadians have a right to feel safe and comfortable in their neighbourhood and that should be a priority for governments.”