N.S. commits to fix for municipalities waiting on marketing levies from booking platforms

The provincial government has promised to find a solution for Nova Scotia municipalities struggling to have booking platforms like Airbnb or Vrbo collect and remit the fees they are legally owed.

Many cities, towns or districts in Nova Scotia have, or are exploring, marketing levies to bring in funds for tourism projects or events. The levies can be up to three per cent of an accommodation price, and apply to short stays at places like hotels, or rentals in homes or cottages.

Since April 2024, online platforms have been required under provincial law to collect the levies from guests and send them to the local municipality.

But so far, that has proved to be easier said than done.

"It's been a lot of legwork on our end to find these folks, to establish a relationship, to work through the documentation," said Donna Hatt, economic development officer for the Town of Bridgewater on the South Shore.

"Some of them aren't even in Canada. We're working with head offices for companies like Booking.com that are overseas … so it's been a bit more complicated."

Bridgewater's levy came into force on April 1, and Hatt said about 15 short-term rental properties fall under the bylaw, with many using online platforms for bookings.

Hatt said most of the platforms have been co-operative, but made it clear they don't want to deal individually with dozens of municipalities, who all have their own rules and regulations. She said they have warned her "it may be a little bit longer" before they start sending levies to Bridgewater.

CBC reached out to Airbnb, Vrbo and Booking.com, but did not receive a response.

Carolyn Penny, senior financial consultant for the Halifax Regional Municipality, said they are an outlier — likely because they make up the largest segment of rentals in the province. The online platforms have been sending monthly wire transfers of the levies to Halifax, which has more than 1,000 listings on Airbnb alone.

"I've actually had a few emails from municipalities wanting to know 'how did you make Airbnb remit to you?'" Penny said.

Staff said Halifax received $10 million in marketing levies from all the operators the levy applies to from May 2024 to this May, with about $750,000 coming through platforms like Airbnb.

Penny said she understands the administrative burden of dealing with smaller municipalities would be difficult for major companies, especially when some districts might only have a few listings with monthly levies adding up to just a few dollars.

Municipal Affairs Minister John Lohr told municipal leaders at a conference in early May that the province was aware local governments were "facing challenges" securing agreements with booking platforms, and will step in.

He said they will find a third party to serve as a single point of access between municipalities and the platforms. Provincial spokesperson Geoff Tobin said they are in the "early stages" of finding that third party, and the government has not committed to a timeline.

The District of Chester's senior economic development officer, Brian Webb, said getting that solution in place before the 2026 summer season would be ideal. Their new levy kicks in Jan. 1, 2026.

The district, which includes the scenic waterfront Village of Chester, has a high number of short-term rentals with 227 properties providing hundreds of bedrooms. Another 10 properties would be commercial businesses like hotels or resorts.

Webb said they had expected to make about $200,000 from the levy in its first year, because staff planned for "low levels of compliance" from online platforms. But with a provincial portal, he said they could get full compliance and bring in more than double that amount.

"It would allow us to achieve better results, to develop our tourism sector and much quicker, were this to be done at a provincial level for sure," Webb said.

Staff from multiple municipalities said having a third party handle the levies should mean that group also audits the funds. Right now, this takes a large amount of staff time in places like Halifax, or isn't being done at all in other areas where they don't have the time or expertise.

"We really are kind of blind to making sure that everybody is fully compliant … so having [the province] take ownership of this process alleviates some of that duplication of effort to make sure that everybody is remitting correctly," said Kelsey Hicks, finance manager for Bridgewater.

Both Chester and Bridgewater will develop a plan with local businesses and tourism organizations for how to spend their levy funds.