New federal measures aimed at regulating short-term rentals will help municipalities enforce their policies, according to an RBC economist.

In this week’s fall economic statement, the federal government said as of Jan. 1, it plans to deny income tax deductions when operators of short-term rental units are not complying with municipal regulations.

The government also pledged $50 million over three years to help local governments enforce restrictions against short-term rentals, with funding to begin in fiscal year 2024-25.

The short-term rental regulations are intended to help increase the availability of rental units. In its fiscal update, the federal government said there are an estimated 18,900 homes used as short-term rental properties across Toronto, Vancouver and Montreal.

Robert Hogue, an assistant chief economist at RBC Economics, told BNN Bloomberg on Wednesday that the move from the federal government is one of many measures put forward in an attempt to “crack down on short-term rentals.”

“It’s a crafty way for the federal government to lend support to municipalities,” he said in a television interview.

Nicki Skinner, realtor at Bosley Real Estate, said the new federal short-term rental rules are an “added layer” to remove incentives for short-term renal units.

“From the federal perspective, it's something that they can do to put these properties back in the rental pool,” she said in an interview with BNN Bloomberg on Wednesday.

However, Skinner added that the policy could have an unintended consequence if investors broadly decide to sell the units and not place them on the rental market.

“Now we have a flood of units on the market, which is good in some ways for people who are looking to buy,” she said on the potential consequence.

“But I’ve got to be honest, a lot of these units that are on Airbnb, they're small, these aren't places that people are looking to live in long term.”


Airbnb Canada policy lead Nathan Rotman told BNN Bloomberg that the new regulations for short-term rentals from the federal government will impact a small segment of Airbnb users.

Rotman said in a Thursday interview that the company represents less than one per cent of the overall housing stock in the country and in major cities, and Airbnb is already restricted to operating only in a host’s primary residence.

He said Airbnb supports working with the government and he wants to see the details of the new legislation, but the company has issues with the way the government has framed the issue.

“We support compliance of our hosts in the communities where they operate. What we don't support is vilifying short-term rentals as part of the problem with Canada's housing market,” Rotman said.