Airbnb is putting in some serious work to help improve its image with regulating bodies in Canada.
The massive room and home sharing service has partnered with the Quebec government to offer Canada’s first-ever tax remittance agreement of its kind. This means Airbnb will collect the tax on bookings then return it to the government after the transaction is complete.
Starting on October 1, Airbnb will automatically remit the 3.5 per cent tax on lodging made in any one of Quebec’s 22 tourist areas, including Montreal, Quebec City and Laval. This makes the booking process seamless and easy for both hosts and the province itself. That 3.5 per cent tax is standard for any kind of lodging in the province, including hotels.
“As the first-of-its-kind tax agreement in this country, this is a landmark announcement and defining moment for Airbnb in Canada,” said Alex Dagg, public policy manager for Airbnb Canada. “The agreement in Quebec is an example of how Airbnb and government officials can work together as partners.”
Over the last year, almost one million people have booked stays through Airbnb in Quebec alone. In the province, the average host earns $2,600 per year and books 38 nights over that span. There are over 22,000 active hosts in Quebec.
The total collected taxes for 2016 would have been $3.7 million for the province of Quebec.
“The agreement announced today is a positive step toward the future and development of tourism in Quebec, since it will make it possible to adapt the taxation system to the new collaborative and digital economy,” said Julie Boulet, minister of tourism responsible for the Mauricie region. “The agreement not only addresses the concerns of the tourism industry, but will also ensure healthy competition within the tourism accommodation sector. It is essential that we join and keep pace with the collaborative economy.”
This decision could help to jumpstart provinces to work with Airbnb as opposed to against it. The company has been controversial ever since it began letting residents rent out their homes, and politicians and lawyers alike have raced to prevent the company from operating in some large areas.
In fact, a lawyer is attempting to levy a lawsuit against Airbnb for misleading service fees in Montreal right now. Toronto also recently agreed to go forward with plans for a “one host, one home” rule for short-term rentals, meaning hosts need to register with the city and pay fees.
Alex Dagg was interviewed earlier this year by Toronto Life and gave a pitch for Airbnb in Toronto, which can be echoed for any city in Canada.
“Airbnb allows tourists to experience Toronto and homeowners to monetize their most valuable asset, providing a lifeline for thousands of families,” said Dagg.
This deal with the province of Quebec could spur other provincial governments to see Airbnb as a boon to tourism and not a harm to community life or city dwellings.
Airbnb has listings in 191 countries and has booked over 200 million guests since its inception.