Short-Term Rentals

Taking Action

The Emergence of a Digital Economy

Online rental platforms operating in Canada, like Airbnb, do not currently collect or remit GST/HST, pay no corporate income tax to the Canadian government, and make it far too easy for those renting rooms on their platforms to do the same. This puts online rental platforms at an unfair advantage over other accommodation businesses, like hotels, who pay their taxes and play by the rules. And the real loss is felt by Canadians who end up paying more in taxes to cover the cost of our social programs.

 

What started as true home sharing has expanded into a growing trend: people using these platforms to become commercial operators. This means that multiple units or entire homes are being rented out on a consistent basis. Effectively, these operators are running illegal hotels within existing residential housing.

What this means for Canadians:

 

  • Lost tax revenues for governments and cities.
  • Digital businesses having an unfair tax advantage over established businesses who contribute to the economy and employ Canadians.
  • Guests are potentially at risk, as there may not be any health and safety standards or inspections in place, no insurance, or there may not be any personnel on site to handle issues.
  • Impacts to local communities as nuisance, disruption and crime are increasingly reported.
  • Affordable housing is lost, as Airbnb and similar platforms convert long-term rental units into short-term rentals. This has decreased the supply of affordable housing units, which has exacerbated an already acute housing shortage in many of Canada’s largest cities.

The Issue

An Overview of Airbnb in Canada

The Hotel Association of Canada (HAC) conducted the most comprehensive Canada-wide study analyzing the impact and effects of the short-term rental industry in 2017. The results showed that commercial operators are growing exponentially, far outpacing actual home sharing activity. Alarmingly, only 17% of Airbnb’s total revenue in Canada is generated by true home sharing where the owner is present during the guest’s stay. The other approximately 80% comes from hosts renting entire home units where the owner is not present.

Key Findings:

 

  • Only 17% of total Airbnb revenues in Canada is generated by true home sharing, where the owner is present during the guest’s stay. This means that in 2016/17, entire-home rentals comprised 83% of total Airbnb revenues in Canada.
  • Approximately 7-in-every-10 units on the Airbnb distribution platform are entire-home rentals, with guests having complete and sole access of the entire unit during their stay.
  • 1 in every 3 units in Canada is rented out for more than 90 days per year and generates 71% of total Airbnb revenues in the past 12-month period.
  • Over the past 2 years, entire-home multi-unit hosts have increased at a much faster pace than single entire-home hosts, with revenues from this segment more than doubling from $71 million to $167 million – a 134% increase.
  • These multi-unit hosts account for over 30% of all revenue generated on Airbnb in Canada.
  • Canada’s Airbnb sector has the potential to contribute $85 million in consumer taxes and fees to the Canadian economy.

Full Study
An Overview of Airbnb and the Hotel Sector in Canada: A Focus on Hosts with Multiple Units

Full Study

An Overview of Airbnb and the Hotel Sector in Canada: A Focus on Hosts with Multiple Units

Full Study

City Overview
An Overview of Airbnb and the Hotel Sector in Canada: A Focus on Hosts with Multiple Units

City Overview

An Overview of Airbnb and the Hotel Sector in Canada: A Focus on Hosts with Multiple Units

City Overview

Best Practice Guidelines

Developing a Modern Approach to Short-Term Rentals in A Digital Economy

The short-term rental industry operates with limited regulation and online platforms are being used to operate commercial accommodation businesses, resulting in unintended consequences. Governments at all levels are grappling with the implications of the growing short-term rental industry and platforms like Airbnb.

 

Based on the clear and immediate need for action, HAC released best practice guidelines for regulating short-term rentals. The paper, “Developing a Modern Approach to Short-Term Rentals in a Digital Economy,” gives Canadian municipalities an analysis of regulatory developments worldwide and best practice approaches to developing a local framework.

The proposed framework outlines regulatory tools that cities can apply, including: 

  • Host registration and fees
  • Platform registration and fees
  • Principal residence restriction
  • Cap on usage
  • Health and safety standards
  • Reporting requirements
  • Taxation/levies
  • Enforcement/penalties

Executive Summary
Developing a Modern Approach to Short-Term Rentals in a Digital Economy

Executive Summary

Developing a Modern Approach to Short-Term Rentals in a Digital Economy

Executive Summary

Regulatory Framework
Developing a Modern Approach to Short-Term Rentals in a Digital Economy

Regulatory Framework

Developing a Modern Approach to Short-Term Rentals in a Digital Economy

Regulatory Framework

Join our Fight

It’s Time for Tax Fairness

The findings of our study have demonstrated that the hotel industry is competing on an uneven playing field. Commercial operators are running exactly the same kind of business as a hotel, but none of the rules and regulations apply to them. This includes taxation, health and safety standards, the requirement to obtain a business license, insurance, safety inspections, and accessibility requirements.

We have made progress in a number of jurisdictions. Watch our video to learn more.

To join our fight, send a letter to your Member of Parliament by visiting FairRules.ca.

Visit FairRules.ca
Wins so Far

Progress

As a result of the industry’s strong national presence and united message, we are seeing wins across Canada.

 

These wins include: 

  • New regulations on zoning and licensing in the Province of Quebec.
  • Limiting short-term rental accommodations to principal residences in:
    • Victoria, BC;
    • Vancouver, BC; and,
    • Toronto, ON.
  • Applying provincial or accommodation taxes in:
    • the Province of British Columbia;
    • Toronto, ON;
    • Ottawa, ON; and,
    • the Province of Quebec.