Winnipeg poised to apply hotel tax to Airbnb rentals as industry pushes for 'level playing field'
'Our community wants to pay its fair share,' Airbnb Canada says
Winnipeg is poised to ensure Airbnb rentals are subject to the same five per cent tax as conventional hotel rooms in a move described as a "first step" toward levelling the economic playing field in the accommodations sector.
The city is working on updating its 11-year-old accommodation-tax bylaw, which requires hotel rooms to levy a five per cent surcharge on their rooms.
The city "is currently reviewing options to update" the bylaw "in order to specifically include online platform rental services" such as Airbnb, city spokesperson Kalen Qually said in a statement late last week.
A report is expected to arrive this year before city council, which must vote to enact the change.
"It's a matter of equity," said city council finance chair Scott Gillingham (St. James).
The proposed change comes as the hotel industry steps up its efforts to press municipal, provincial and federal governments to require Airbnb to pay the same taxes as hotels and comply with similar health and safety regulations.
"It's very, very difficult for us to compete if they don't have to collect the taxes hotels do," said Scott Jocelyn, president of the Manitoba Hotel Association, which represents about 80 hotels with a combined 7,100 rooms.
"This is a good first step," he said, adding Airbnb rentals also aren't subject to federal and most provincial sales taxes.
"We just want to compete. We want the level playing field. If someone is making a choice of where they're going to stay, it's something that works against us and we don't think that's fair."
Hoteliers argue governments should treat Airbnb as a major player in the hospitality business, as opposed to a collection of small property owners who rent out rooms or homes.
Airbnb promotes itself as part of the sharing economy, promising stays in real people's homes and relationships with personable hosts.
But a CBC News data analysis has found some its biggest players in Canada are actually — and sometimes secretly — multimillion-dollar for-profit corporations.
- CBC INVESTIGATES Who's behind the smiling faces of some Airbnb hosts? Multimillion-dollar corporations
The data analysis found 502 Airbnb listings for full homes or suites in Winnipeg on April 10, scattered throughout the city but concentrated in downtown neighbourhoods, as well as in Osborne Village. Half of those properties were managed by people who also manage or own other Winnipeg Airbnb properties.
A company called Air Property, owned by real-estate agent Braydin Huyen, managed the most Airbnb listings in Winnipeg: 35 in total, in Osborne Village, River Heights, Tuxedo and other neighbourhoods.
Rounding out the top five Airbnb property managers in Winnipeg by volume on April 10 were the firms Titan PM (13 listings), Homes By Ré (12), Nest Host (11) and Executive Stay (eight).
Nest Host co-owner Michelle Robertson, who also works a real estate agent, owns one Airbnb property and manages 14 other listings.
She said her business comes from tourists, film industry workers and people who visit family members in Winnipeg.
For people who travel as a family or larger group, the ability to book a suite or a home with multiple bedrooms provides an advantage over hotels, she said.
"You're getting to stay in the residential neighbourhoods and residential buildings, so you get more of that 'home away from home' feel, and you have access to fully stocked kitchens.
"It's a little bit more of a personal experience as opposed to renting a hotel room," said Robertson, standing in the living room of a 12th-floor Airbnb suite in the Glasshouse condo building, on Hargrave Street near Bell MTS Place.
Robertson said she would advise prospective Airbnb listers to use a professional property manager to ensure all company rules and regulations are followed, to provide the best possible service to guests — and to protect personal property from harm.
Nest Host properties pay additional insurance premiums to cover liability, Robertson said. Her company also employs the services of a professional handyman and a "turnover team" to prepare its suites, she added.
Accommodation tax little concern to Airbnb
Robertson said she does not believe Airbnb will be any less attractive in Winnipeg once the city applies accommodation taxes to its listings.
"I know the hotel business is pushing this tax to level out the playing field. However, I do foresee people coming in still choosing to stay in an Airbnb listing over a hotel room, just based on my experience and my reviews," she said.
"They're offered a lot more for the price they pay."
To date, Airbnb has demonstrated it is willing to comply with municipal and provincial tax regimes.
Six Ontario cities, including Ottawa and Mississauga, require Airbnb to collect a four per cent municipal accommodation tax. Municipalities in British Columbia require Airbnb to collect a tax equal to two to three per cent of the listing price. Quebec makes Airbnb rentals subject to a 3.5 per cent provincial lodging tax.
- Airbnb to collect tax on Windsor rentals
- Nova Scotia changing rules around Airbnb and other short-term accommodation rentals
B.C. also applies an eight per cent provincial sales tax rate for accommodations to Airbnb rentals.
Proceeds from Winnipeg's five per cent accommodation tax flow into the city's destination marketing reserve, which is used to promote events and conferences in Winnipeg and pay for the expansion of RBC Convention Centre. The city expects to collect a total of $9.9 million in accommodation taxes this year, according to budget documents.
Airbnb Canada signalled it's prepared to comply with the Winnipeg move.
"When it comes to accommodation taxes, our community wants to pay its fair share and ensure local governments can benefit from the economic impact of home sharing," Airbnb Canada spokesperson Alex Dagg said in a statement.
She said Airbnb already collects tourism or hotel taxes in more than 400 jurisdictions and encourages its competitors to do the same.
The hotel industry, however, is pushing for Airbnb rentals to be subject to provincial and federal sales taxes. For now, Manitoba has no plans to charge PST on Airbnb rentals, Manitoba Finance said in a statement.
Properties available through services like Airbnb are exempt from Manitoba's PST, as are bed-and-breakfast operators with fewer than four rooms for rent, Manitoba Finance said. The province also offers a small-business PST exemption for annual taxable sales under $10,000.
Jocelyn argues the presence of professional Airbnb property managers within the Winnipeg accommodations market suggests more needs to be done in Manitoba.
Manitoba Finance said it's monitoring new developments.
Methodology: How did CBC analyze Airbnb listings?
A minority of listings might be duplicates of the same property created by the same host as a marketing strategy.
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With files from Valerie Ouellet, Inayat Singh and Naël Shiab