A new agreement between the provincial government and Airbnb will help fund B.C.’s affordable housing pursuits as well as the West Coast’s tourism marketing efforts.
Finance Minister Carole James recently announced Airbnb accommodation providers will soon collect both the Provincial Sales Tax and Municipal Regional District Tax—formerly known as the additional hotel room tax.
With roughly 18,500 Airbnb’s operating in B.C., the province estimates the agreement will bring in about $16 million through the PST and an additional $5 million through the MRDT, according to a recent media release.
“This initiative will provide additional revenues to address housing affordability, and it improves tax fairness for all British Columbians,” James said through the release.
“These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing,” added Airbnb Canada’s public policy manager Alex Dagg.
Tofino Mayor Josie Osborne told the Westerly News that while the PST revenue would be “relatively small” at $16 million, the agreements marks a significant shift in thinking that Tofino has been calling for some time.
“This is a good and necessary step for the government to take,” she said. “Short-term rental operations are tourism accommodation businesses and should be treated as such, in a way that is fair across all tourism accommodation businesses.”
She added she hopes the new revenue leads to locally relevant housing initiatives.
“The decision doesn’t interfere with BC municipalities’ authority to regulate short-term rentals, but it does lend another “set of eyes” on this growing industry, which will boost Tofino’s efforts to work with local short-term rental owners and operators in abiding with local regulations,” she said.
“I’m very pleased to see that the Province intends to earmark the PST revenue for affordable housing, and I hope a significant portion of it is allocated back to rural municipalities like Tofino and Ucluelet, not just urban centres, to support affordable workforce housing initiatives.”
The MRDT is paid by tourists staying at accommodations in B.C.’s 14 designated Resort Municipalities, including Tofino and Ucluelet, and is the main source of funding for those communities’ Destination Marketing Organizations.
Tofino’s MRDT is set at 3 per cent and the community’s DMO, Tourism Tofino, puts that revenue towards marketing the town to potential tourists.
Tourism Tofino’s executive director Nancy Cameron said the new agreement is a welcomed step forward.
“It will increase our revenue, which means it increases our ability to do strategic marketing to address our specific destination’s requirements and drive more business at times when business is needed,” she said. “It’s just like all marketing. You need to have constant product placement in the minds of your consumers in order to keep your tourism industry buoyant.”
She added local businesses are vital to Tofino’s ability to stay hip to travellers as the experiences they create for tourists helps keep positive word of mouth reports flowing through social media.
“As much as the DMO spends a lot of its funding outside of the destination to inspire people from afar to travel here, every business within the destination makes those experiences happen,” she said. “It takes the whole industry to drive tourism and to keep it growing and thriving.”
Ucluelet’s MRDT is set at 2 per cent and Mayor Dianne St. Jacques was delighted to hear local Airbnb’s would be contributing to Tourism Ucluelet’s efforts alongside other accommodation providers.
“It’s very good news,” she said. “It will help us spend more money on our community as far as marketing and events and all those types of things.”
She added that the change is overdue.
“This is something that has really been a tough pill to swallow for the existing accommodation folks who have been collecting all the appropriate taxes,” she said. “For Airbnb to announce that they are going to participate in the same programs that the other folks do is a very positive step. It took them a while to get there, which is unfortunate, but they’re there now so we’re grateful and happy about that.”