Quebec's new Airbnb legislation could be a model for Canada and help ease the housing crisis

For years, Quebec has had what many experts viewed as one of the strongest laws in Canada to regulate Airbnb and other short-term rental platforms.

Airbnb hosts had to register with the provincial government, or they could face fines.

But it was also clear the law wasn't actually working, with the vast majority of Montreal's listings on the platform being unlicensed.

The problem was brought into sharp focus after a fire in March in an Old Montreal heritage building that killed seven people several of whom were staying in illegal Airbnbs.

On Tuesday, the provincial government tabled updated legislation aimed at making sure only eligible, registered hosts can post a listing.

"This new law represents a pretty significant step forward there, because it is really kind of tightening the constraints," said McGill University Prof. David Wachsmuth, the Canada Research Chair in Urban Governance.

"That's a really good template that I think other provinces, and certainly Ontario and British Columbia, the other big provinces, should be looking to emulate."

Such a system, Wachsmuth said, would allow municipalities to set their own rules and use the provincial database to ensure those rules are being enforced.

Patchwork system

Regulating short-term rentals effectively could help alleviate a strained housing market in many parts of Canada, said Wachsmuth, who has studied the impact of Airbnb on the market.

His 2019 research found that the company had likely resulted in the removal of 31,000 units from Canada's long-term rental market.

"Short-term rentals are one of the factors contributing to high housing prices right now, both in terms of owner-occupied houses as well as rents," he said.

"That's just because they've been responsible for converting thousands of homes into what are effectively hotels."

Currently, there is a patchwork system of regulations across the country attempting to get a handle on short-term rentals.

Vancouver and Toronto already have rules in place, for instance, while Halifax is implementing changes starting Sept. 1. Other smaller municipalities, such as Mont-Cascades, Que., have recently moved to ban short-term rentals outright.

British Columbia is also in the process of developing its own provincewide policy around short-term rentals.

Onus on Airbnb

Quebec had already required all short-term units to be registered and display that number on the listing, but the rules weren't adequately enforced. In some cases, hosts were found to be using fake registration numbers.

Under Quebec's new proposed law, titled "An Act to fight illegal tourist accommodation," rentalcompanies such as Airbnb would be obligated to keep records of each advertised accommodation's registration certificate.

They would also have to validate the registration numbers of those establishments and designate a Quebec-based representative to make it easier to actually reach someone from the rental company.

The bill also provides for the creation of a public registry of tourist accommodations,to be maintained by the tourism minister or by a body recognized by the minister.

Fines against individuals who don't comply would range between $5,000 to $50,000, while companies could face fines of $10,000 to $100,000 per posting.

"With the new standards, with the cities and boroughs, I believe there will be a great deal of compliance," Quebec Tourism Minister Caroline Proulx said in announcing the legislation.

WATCH | How the law would target rental companies:

Quebec cracks down on Airbnb

1 year ago

Duration 1:58

The Quebec government has tabled a bill to crack down on short-term rentals after a deadly fire in Old Montreal killed seven people in March. Most of the dead were staying at illegal Airbnbs. The bill will target digital platforms like Airbnb with fines of up to $100,000 if they do not obey local laws.

Airbnb, for its part, issued a statement saying it was still analyzing the legislation.

"We will have more to say upon further review," said Nathan Rotman, the regional policy lead for Canada.

The company had promised to remove any Montreal listing without a valid licence following the Old Montreal fire.

But before the new legislation was introduced,critics had raised concerns there still weren't the necessary regulations in place to hold companies accountable.

"We shouldn't rely on Airbnb deciding that there's a PR crisis every so often to uphold their end of the bargain," Wachsmuth said.

"There's no substitute for a universal registration system that has platform compliance.... They should be proactively removing listings that don't have current numbers, and the new law that's being proposed here today is going to make it much more likely that Airbnb and other platforms do their part reliably."

'They should have some kind of responsibility'

In Montreal, where many boroughs already have rules in place prohibiting or limiting short-term rentals, the changes could put thousands of apartments back on the market.

Nearly 30,000 ads were posted on Airbnb in February, for instance, and nearly 80 per cent of the places advertised were not licensed for short-term rentals, according to a survey conducted by a local tenants group, RCLALQ.

Steeve Fabre has two legal Airbnb units in Montreal. He got a registration number after he was fined for running them without one.

In his view, the changes are positive, because they will put the onus on Airbnb and other companies and make it easier for homeowners to comply.

"Considering that obviously Airbnb is making way more money than the users, the fact is they should have some kind of responsibility," he said.

Thorben Wieditz, the director of Fairbnb, is hopeful the legislation will set a new countrywide standard, whereby other provinces set up their own registries.

His organization was formed in 2016 by a hotel workers' union in Toronto concerned about the proliferation of condo towers filled with Airbnb rentals.

Fairbnb has since pushed for cities across Canada to develop stronger rules that allow homeowners to rent out their own unit occasionally but crack down on properties being solely used as short-term rentals.

"There are many, many municipalities that do not have the resources that a city like Vancouver or Toronto has, and they need help," he said.