The Quebec government has reached an agreement with Airbnb that will see the home-rental website collect a lodging tax on behalf of its hosts.
Under the deal, which goes into effect on Oct. 1, Airbnb will automatically collect and remit the 3.5 per cent tax.
"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," Julie Boulet, the province's tourism minister, said in a statement.
Boulet said the agreement aims to address concerns voiced by the hotel industry, who argued Airbnb wasn't operating on a level playing field by not paying the lodging tax.
The money raised will be used to help fund the province's 22 regional tourism offices.
Alex Dagg, Airbnb's public policy manager for Canada, called the deal a "landmark" and a "defining moment for Airbnb in Canada."
"The agreement in Quebec is an example of how Airbnb and government officials can work together as partners," she said in a statement.
Representatives from Airbnb and the province made the deal official at a joint news conference Tuesday in Montreal.
Law put into effect last year
There are more than 22,000 Airbnb hosts in the province, with an average of 38 nights hosted per year.
In 2016, the Quebec government would have collected $3.7 million in taxes if the new agreement had been in place.
A provincial law that went into effect last year was meant to ensure hosts obtain a permit and pay a hotel tax, but the majority of hosts didn't register with the province.
New legislation will be tabled this fall to ensure Airbnb hosts comply with the new agreement, Boulet said.
"We have to make a distinction, draw a line between what the sharing economy is and what is a business," she told the news conference.