OTTAWA — The Hotel Association of Canada has renewed its call to politicians of all stripes to make fair taxation of digital platforms like Airbnb an election issue. They have also launched a new website, VoteFairRules.ca.
Alana Baker, HAC's director of government relations, was joined by Xavier Gret, président directeur general of Association Hôtellerie Québec, and Steve Ball, president of the Ottawa-Gatineau Hotel Association, at a press conference last Wednesday at the Lord Elgin Hotel in downtown Ottawa.
The industry’s call to action was observed in major news outlets across the country, including CBC, CTV and City News, and several of Ottawa’s top political news outlets including iPolitics, and the Evan Solomon Show, earning more than 100 online news stories and broadcasted on more than 100 television and radio news shows, grossing 35 million impressions in the first 24 hours of the news cycle.
“Commercial short-term rental operators who use digital platforms like Airbnb continue to grow, while our laws remain outdated,” said Baker. “We are seeking support from candidates across the country during this federal election to ensure these digital businesses contribute their fair share to the Canadian economy.”
While Airbnb was meant to be a home sharing platform for everyday people to share rooms within their homes, it is now a multibillion-dollar corporation that has no responsibilities to federal taxation and other regulatory realities. While hotels pay taxes to reinvest in and strengthen our communities, these platforms reap the benefits of our communities without paying their fair share.
The most recent Auditor General 2019 Spring Report on the Taxation of e-Commerce estimates losses of $169 million in sales tax revenues alone on foreign digital products and services annually.
While other jurisdictions including European Union, Australia, Singapore, Japan and Norway, have taken action on taxing the digital economy, the Canadian government lags behind and needs to take action.
With these discrepancies in policies, governments and all Canadians are not just losing out on tax revenues. “A significant portion of Airbnb’s revenue in Canada is generated by commercial operators – those who are renting out entire homes or multiple listings,” said OGHA's Ball. “The emergence of these commercial operations occurring in our residential neighbourhoods is resulting in a number of unintended consequences including less housing, soaring rental prices, community nuisances and safety concerns.”
“Currently, Airbnb and similar platforms operating in Canada do not pay any corporate tax on their Canadian earnings, they do not collect or remit GST/HST, and they are not required to provide tax information slips to their hosts,” said AHQ's Gret. “We encourage all parties to address these measures within their election platforms in order to create a level playing field and curb unintended consequences.”
“At times, the question comes up as to whether or not the government should be concerned about consumer backlash if they were to modernize our tax laws. However, the government has the support of Canadians,” Baker told CLN.
“According to the Professional Institute of the Public Service of Canada, almost 8 out of 10 Canadians and almost 9 out of 10 Canada Revenue Agency tax professionals think that E-commerce companies should be subject to Canadian taxes for business carried out in Canada.
“The election timing provides an opportunity to take leadership and real action on this issue so Canada doesn’t continue to lag behind.
“We have always had a multi-partisan approach, which is why we are communicating with all parties,” Baker added. “We are letting every party know our concerns, and listening to them. The message is the same: time is of the essence.”
For more information, please visit www.VoteFairRules.ca.