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

Man killed in shooting at Abbotsford bank

Police believe incident on Thursday night to be targeted

Online fundraiser to cover funeral costs of motorcyclist killed in collision

Larry Nizio, 37, died after crash with pickup truck Oct. 12 in Abbotsford

ABBY ELECTION HUB: Everything you need to know in one spot

Interviews, Q&As, info on how to vote, stories on the issues and candidate bios all in one place.

Brothers who shot to fame with Jackson 5 song perform in Abbotsford

Melisizwe Brothers have performed on Ellen and America’s Got Talent

Alzheimer Society presents Family Caregiver Series

Program in Abbotsford runs for three Saturdays, starting Oct. 20

B.C. NDP retreats again on empty-home tax for urban areas

Rate reduced for all Canadians, dissident mayors to get annual meeting

Jets score 3 late goals to beat Canucks 4-1

Winnipeg ends three-game Vancouver win streak

Canada not sending anyone to Saudi business summit

Sources insist Ottawa never intended to dispatch a delegation this time around

Two B.C. cannabis dispensaries raided on legalization day

Port Alberni dispensaries ticketed for “unlawful sale” of cannabis

Earthquake early-warning sensors installed off coast of B.C.

The first-of-its kind warning sensors are developed by Ocean Networks Canada

VPD ordered to co-operate with B.C. police watchdog probe

According to the IIO, a court is ordering Vancouver police to co-operate with an investigation into a fatal shooting

B.C. woman looks to reduce stigma surrounding weed-smoking moms

Shannon Chiarenza, a Vancouver mom of two, started weedmama.ca to act as a guide for newcomers to legal cannabis, specifically mothers

B.C. teen gives away tickets to Ellen Degeneres show, plans O Canada welcome

The Grade 9 student wanted to give away tickets in the spirit of inclusivity

Most Read