MONTREAL -- Airbnb and the Quebec government announced an agreement Tuesday that will see the home-sharing platform begin collecting a lodging tax on short-term rentals in the province as of October.
In what Airbnb is calling a first in Canada, the service will automatically collect and remit a 3.5 per cent tax on bookings for stays of under 31 days.
Tourism Minister Julie Boulet said the new rules will deal with a rapidly expanding industry.
"The government has the obligation to adjust, to adapt to this new reality and bring about changes to attain two objectives: to have competition that is fair and just for all partners and the second, to respect the laws that govern Quebec," she told a news conference.
The amounts raised through the tax will be returned to the province's 22 regional tourism offices.
Airbnb's Alex Dagg said the agreement underlines just how the company and a province can work in tandem.
"As the first of its kind tax agreement in this country, this is a landmark announcement and a defining moment for Airbnb, not just in Quebec, but in all of Canada," Dagg, Airbnb's public policy manager for Canada, told the news conference.
The company said nearly one million people used the service in Quebec in the last year alone and it estimates the province would have recouped $3.7 million in 2016 had the tax been in place.
The province currently has 22,300 active Airbnb hosts, according to the company. On average, they rent out a listing about 38 times year and collect about $2,600.
"We think we have to pay our fair share," Dagg said of the deal, which was welcomed by representatives of the hotel and tourist industry who've long complained about unfair competition.
Quebec doesn't plan to stop with Airbnb, Boulet added, calling it a first step with the most popular platform for home-sharing.
"But eventually, there are negotiations and agreements that will be concluded with other platforms," she said.
Quebec implemented a law in April 2016 regulating properties on Airbnb and other home-rental websites, requiring homeowners and companies to have a permit and pay a hotel tax. They risk hefty fines if they don't comply.
Boulet said an omnibus bill will also be tabled this fall to clarify the rules and definitions.
"We have to make a distinction: draw a line between what the sharing economy is and what is a business," she said.