The Canadian Centre for Ethics & Corporate Policy presents a panel on ‘Ethical Issues in Tourism and Hospitality During the Pandemic.’
Politicians unite on short‑term rentals
OTTAWA — Trudeau, Scheer, Singh and Blanchet didn’t agree on much during last fall’s election. Yet all parties included a commitment to tax digital businesses, like Airbnb, the same way as hotels thanks to the unified voice of the hotel industry.
By Colleen Isherwood
OTTAWA — Justin Trudeau, Andrew Scheer, Jagmeet Singh and Yves-François Blanchet didn’t agree on much during last fall’s election.
Yet all federal parties included a commitment to tax digital businesses, like Airbnb, the same way as hotels thanks to the unified voice of the hotel industry.
In the months leading up to the election, the Hotel Association of Canada executed a comprehensive lobbying campaign called #Fairrules.ca. The goal was to level the playing field for hotels at all levels of government, and to educate the public why the regulations exist for good reason. The result: 100s of MP meetings, 1000s of letters, and a commitment from every political party to deal with the issue.
During the election campaign, HAC got people to send thousands of letters to their MPs, and obtained a commitment from all political parties to apply taxes fairly.
“We have come together to do three things,” Susie Grynol, president of HAC, told CLN.1) Unite the industry in partnership with our provincial and city hotel associations; 2) invest in a comprehensive, joint national strategy; and 3) take charge of the regulations that will frame the short-term rental space across Canada.”
In order to minimize public backlash on its push for regulations, HAC focused solely on commercial operators – those renting multiple units and whole homes – not on home-sharing. “Home sharing is one thing, but the majority of Airbnb’s revenue is coming from commercial operators who are running a comparable business in size and scale to a hotel, said Grynol. “They just aren’t playing by the same rules.”
Over the past three years, HAC has had a number of Parliament Hill Days, where HAC invited a select group of hoteliers and representatives from city and provincial hotel associations to lobby for a level playing field for Airbnb-type operations and hotels. They have worked to convince governments to address problems such as taxation inequality, wild parties and parking issues in residential areas, zoning, and the effect of short-term rentals on the availability of rental units.
Governments at all levels are starting to pay attention because this impacts them at home in their constituencies. Wild parties, parking issues and community nuisance issues are often raised by voters. “There is a reason why commercial accommodation businesses are not allowed in the middle of communities. They just aren’t set up for it,” said Grynol.
Last week, HAC’s Susie Grynol was one of the few CEOs selected to appear before the House of Commons Finance Committee as part of its pre-budget consultations process, to discuss fair tax legislation for hotels. The event was followed up with a Hill Day on Thursday, Feb. 6, including more than 10 hoteliers. Over 25 meetings took place on that day, with a goal to educate, onboard and mobilize Members of Parliament and federal decision makers.
“We invited a select group of hotel leaders and met with targeted elected officials, specifically on our taxation push,” Grynol said. “We are getting in early with the new government to get them to move on this as quickly as possible,” although she noted that an issue as complicated as taxation won’t be solved overnight.
“We are at a turning point on this matter. We’ve changed the narrative that Airbnb successfully created for hotels: that they are outdated, too expensive and not connected to the local experience,” said Grynol.
“Now people are buying the new narrative. They realize that hotels offer a consistent product that is safe, reliable, convenient and professional. There’s a reason why hotels have a higher price point: it costs money to run an accommodation business properly, and the regulations – such as health and safety standards, or accessibility – are in place for a good reason. People are willing to pay for that certainty and safety. Airbnb hosts can’t deliver that same promise.”
The latest news about short-term rentals shows that the federal government has now started to crack down on digital businesses so that they don’t get a free ride in Canada, and all parties have now committed to modernize our tax laws to include digital businesses. Province by province and city by city, jurisdictions are enacting legislation that includes having short-term rentals pay provincial and DMF tourism levies, restricting short-term rentals to principal residences, keeping short-term rentals from operating in residential areas, requiring licenses and registration numbers for commercial-type units, and providing a tiered licensing system for short-term rentals.
“What’s important is that we have successfully established strong regulations in some of Canada’s largest cities including Toronto, Ottawa, and Vancouver, and this has now set a precedent for other cities to follow.” Grynol said.
“Our members deeply care about this issue and will put their resources behind it,” she added. The numbers back her up — over the past three years, HAC membership has grown from 45 members to 1,450.
The Hotel Association of Canada will be holding its annual conference at the Delta Hotel by Marriott Toronto Airport & Conference Centre Feb. 24 and 25, and short-term rentals will be a vital part of the agenda.