Airbnb's federal budget proposal tells Liberals: 'We want to be regulated'

One of the world's largest short-term rental websites is inviting the Trudeau Liberals to create a regulatory regime for the burgeoning industry — something its critics have long advocated and raising pressure on the government to set rules in the market.

'We think as a platform our hosts should pay taxes,' says Airbnb executive

Airbnb say their renters should pay taxes and want the federal government to regulate their business model. (Gabrielle Lurie/Reuters)

One of the world's largest short-term rental websites is inviting the Trudeau Liberals to create a regulatory regime for the burgeoning industry — something its critics have long advocated and raising pressure on the government to set rules in the market.

Airbnb's budget proposal to the House of Commons finance committee asks the federal Liberals to avoid forcing "old and outdated rules" for traditional hotels onto Airbnb hosts, pushing instead for a simple-to-understand regime.

In its five-page submission, the company bluntly says: "We want to be regulated" — a step beyond last year's request for the government to apply a "light" regulatory touch.

"We think as a platform our hosts should pay taxes. I know people get shocked when we say that, but we do. We think we should be contributing," Alex Dagg, Airbnb's public policy manager in Canada, said in an interview.

"We just need to figure out what are the appropriate rules in place to do that and how can we facilitate that."

The submission leaves the Liberals with mounting requests and offers from online service providers themselves to set some regulations around their work, including applying sales taxes, all of which the government has thus far shied away from.

Quebec, British Columbia and a handful of cities have enacted rules and struck deals to get tax revenues from bookings on Airbnb, which is one of the few services of its kind to negotiate tax agreements with Canadian governments. Quebec's deal netted the province about $2.8 million over the first six months of the tax agreement.

Taxing online service providers

In April, a Liberal-dominated Commons committee urged Ottawa to make online service providers based outside the country collect and remit sales taxes as part of a series of recommendations to help Canada's small businesses compete online.

In late May, the national broadcast regulator released a report calling on the federal government to pry more commitments — monetary or otherwise — from online streaming giants like Netflix and Spotify and consider new internet levies to fund Canadian content.

Federal officials have told groups that they are looking at how to tax and regulate online service providers, but don't seem to have a clear idea of how to do it.

The Hotel Association of Canada said Thursday the Liberals should require online businesses to also hand over detailed information on all home-renting activity so tax authorities have a list of all short-term rental hosts and can force those with high earnings to pay taxes like hotel chains.

The industry group argued it wasn't interested in targeting the casual home owner who rents out a room or unit for a few nights a year, instead putting a bull's-eye on hosts who rent out multiple homes or units for months on end as part of a larger commercial operation.

"We are not against Airbnb and we're not against the competition. Competition is, in fact, a good thing. What we're looking for here is fairness and a level playing field," said Alana Baker, the association's director of government relations.

Airbnb says there are some 80,000 people who offer places to rent in Canada, and they earn on average about $5,500 annually.