City of Vancouver praises Quebec's Airbnb tax

The City of Vancouver says Quebec is setting a "great precedent" with its new lodging tax on Airbnb hosts.

Starting Oct.1, Quebec will collect a 3.5-per-cent tax from hosts to fund the province's 22 regional tourism offices.

"We think it's a fantastic move," said Kaye Krishna, the city's general manager of development, buildings and licensing.

"Any coordination with short-term rental companies and government is a good sign."

Tuesday's announcement comes as the City of Vancouver gears up for public consultations this fall around regulating short-term rentals.

About 6,000 short-term rentals are currently operating illegally in Vancouver.

The city is hoping to introduce new regulationsthat will legalize short-term rentals used as principal residences, which accounts for80 per cent of the stock, Krishna said.

Taxing short-term rentals

Krishna said Quebec's tax will add a level of tracking and compliance to the sharing economy.

Quebecannounced the new tax after the majority of hosts failed to comply with a previous lawwhich required hosts to get a permit and pay a hotel tax.

The new tax will instead be automatically collected and remitted.

The City of Vancouver doesn't have legal authority to introduce a sales tax and has called on the province to review tax equity between short-term rentals and hotels.

The province would not say whether it would implement such a tax.

"Minister Selina Robinson and I will be working closely with local governments to develop an integrated strategy to fix the housing and affordability problems impacting people," Finance Minister Carole James said in a statement.

The hotel and tourism industries have suggested the city adopt a voluntary program similar to the local 1.5-per-cent Destination MarketingFee, which could fund local housing initiatives, according to a city report.

In the meantime, the city is proposing a mandatory business licence to ensure compliance from short-term renters.

Airbnb has said it would be willing to implement abusiness licence verification on its site for Vancouver hosts, Krishna said.

"What we're trying to do is to keep low barriers."

Listen to the full interview below.

With files from CBC's The Early Edition.