Winnipeg poised to apply hotel tax to Airbnb rentals as industry pushes for 'level playing field'

Winnipeg is poisedto ensure Airbnbrentals 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 theaccommodations sector.

The city is working on updating its 11-year-old accommodation-tax bylaw, which requires hotel rooms to levya 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 yearbefore 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.

• Hotels urge government to force Airbnb to pay up

"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 mostprovincial 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."

Hoteliersargue 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 partof 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 OsborneVillage. 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 BraydinHuyen, managed the most Airbnb listings in Winnipeg: 35 in total, in Osborne Village, River Heights, Tuxedo and other neighbourhoods.

Rounding out the top five Airbnbproperty managers in Winnipeg by volume on April 10were the firms Titan PM (13 listings), Homes By R (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 andmanages 14 other listings.

She said her business comes from tourists, film industry workers andpeople who visit family members in Winnipeg.

For people who travel as a family or larger group, theability 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-floorAirbnb suite in the Glasshouse condo building, on Hargrave Street near Bell MTS Place.

Robertson said she would adviseprospective Airbnblisters to use a professional property manager to ensure all company rules and regulations are followed, to provide the best possible service to guestsand to protect personal property from harm.

Nest Host properties payadditional insurance premiums to cover liability, Robertson said. Her companyalso 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 knowthe 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 iswilling to complywith 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 Airbnbrentals 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 foraccommodationsto Airbnb rentals.

Proceeds from Winnipeg's five per cent accommodation tax flow into the city'sdestination 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.

AirbnbCanada 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," AirbnbCanada spokesperson Alex Daggsaid in a statement.

She said Airbnbalready collects tourism or hotel taxes in more than 400 jurisdictions and encourages its competitors to do the same.

The hotel industry, however, is pushing forAirbnb rentals to be subject toprovincial and federal sales taxes. For now,Manitoba has no plans to charge PST on Airbnbrentals, Manitoba Finance said in a statement.

• Airbnb 'ghost hotels' keep 1,000+ homes from rental market, report suggests

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 offersa small-business PST exemption for annual taxable sales under $10,000.

Jocelyn argues the presence ofprofessionalAirbnb property managers within the Winnipeg accommodations market suggests more needs to be done in Manitoba.

Manitoba Finance said it's monitoring new developments.

Winnipeg poised to make Airbnb rentals subject to hotel taxes

5 years ago

Duration 2:34

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.

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.