Susie Grynol, president of the Hotel Association of Canada, speaks at a news conference calling on the federal government to take action on tax avoidance by digital platforms such as Airbnb, on Parliament Hill in Ottawa. (Justin Tang/The Canadian Press)

On tax deadline day, hotels urge Ottawa to tax Airbnb

Hotel Association of Canada says taxing online rental company could bring in $100 million a year

Canada’s hotels are asking the federal Liberal government to take a heavier hand with online rental services like Airbnb and force the platforms to collect and remit sales tax.

The Hotel Association of Canada has been lobbying the government for more than a year to make online rental services collect and remit sales taxes, estimating the cost of not doing so to be some $100 million in revenues annually from Airbnb alone, not including other rental services.

Two provinces and several Canadian cities have already taken steps to regulate such businesses.

READ MORE: Airbnb to collect provincial sales tax in B.C.

But while federal officials have been receptive to the idea and are “critically aware” that there is an issue they need to tackle, they are struggling to find ways to tax digital services, said association president Susie Grynol.

“The government has a responsibility to keep up with the times and other governments around the world have done so, so it’s time for Canada to take some action as well,” Grynol told a news conference Monday.

Pressure from domestic businesses has been building on the Trudeau government to apply sales taxes to online services providers like Airbnb and Netflix, arguing that different tax treatments create an unequal playing field.

Last week a Liberal-dominated Commons committee urged Ottawa to make online service providers based outside the country collect and remit sales taxes on as part of a series of recommendations to help Canada’s small businesses compete online.

The international trade committee’s report on e-commerce issues recommended the government apply sales taxes “on tangible and intangible products” sold through online platforms, and tax the profits from those sales.

During question period Monday, Finance Minister Bill Morneau said Canada was working with other OECD countries to co-ordinate tax policies so internet giants are appropriately taxed.

Airbnb agrees to collect provincial taxes on short-term rentals in Quebec and B.C., and the company has previously said it would be willing to work with governments on further tax collection agreements.

In the rest of the country, it is up to hosts to collect sales tax and provide it to the federal government. The company has partnered with the Canada Revenue Agency to increase tax compliance, last year providing statements of earnings and educational materials to its more than 55,000 hosts.

Grynol said she would like to see the various platforms be proactive in either collecting sales taxes.

Ahead of this year’s budget, the company asked the Commons finance committee to recommend the Liberals “apply a light regulatory touch” to the online rental sector, noting that most of its hosts “are home sharing on an occasional basis.”

As for taxation, the committee submission asked the Liberals to take a “progressive and forward-looking approach.”

“Airbnb helps to democratize revenue by generating new tax revenue through hotel and tourist taxes that governments can dedicate to existing critical services, or governments can work with us to develop funding and tools to support new programs that help their middle-class citizens and address local social challenges.”

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Fire, theft, fights: Homeless population disturbs east Abbotsford neighbourhood

Outreach worker says problems are offshoot of housing crisis

Province has been missing in action on flood protection, experts say

Political will to improve dikes lacking, says B.C.’s former flood safety chief

VIDEO: Fiery crash closes Highway 1 at 232 Street

One vehicle burst into flames, victim airlifted to hospital following Thursday evening collision

Becoming Abbotsford Made

New free basketball camp giving local youth a professional experience

Abbotsford high school football talent sign with university teams

Bateman’s McGennis, Abby’s Uko continue football journeys at post-secondary level

Black Press Media to launch Pipeline Full of Controversy series

Series covers Trans Mountain’s history, science, Indigenous reaction, politics and economics

Canucks sign top prospect Elias Pettersson to entry-level deal

Slick centre drafted No. 5 overall in 2017 NHL draft

Wildfire northwest of Kamloops jumps to 1,600 hectares overnight

Ground crews and aircraft are responding to an estimated 1,600 hectare wildfire approximately 55 kilometers northwest of Kamloops, near the Deadman Vidette Road.

Former B.C. police chief dies in ATV accident

Ex-Nelson top cop began his career in Vancouver

5 to start your day

The latest on mobility pricing, thieves target a farmer’s market, and more

Referendum in Ireland would repeal strict ban on abortion

Voters throughout Ireland have begun casting votes in a referendum that may lead to a loosening of the country’s strict ban on most abortions.

Lava from Hawaii volcano enters ocean from 3 flows

The Kilauea volcano has been gushing lava on the big island of Hawaii for the past three weeks.

Summit talk turns warmer; Trump says ‘talking to them now’

North Korea issued a statement saying it was still “willing to give the U.S. time and opportunities” to reconsider talks

Harvey Weinstein turns himself in, arraigned on rape, criminal charges

Harvey Weinstein arraigned on rape, criminal sex act charges following allegations of sexual misconduct

Most Read