Feds Have ‘Opportunities’ to Reduce Airbnb-type Short-Term Rentals, Says Minister

The housing minister says his government is 'very much looking' at making changes in the area of short-term rentals through the use of the federal tax system.
Feds Have ‘Opportunities’ to Reduce Airbnb-type Short-Term Rentals, Says Minister
Housing Minister Sean Fraser rises during Question Period in the House of Commons on Parliament Hill in Ottawa, on Oct. 16, 2023. (The Canadian Press/Patrick Doyle)
Noé Chartier

Housing Minister Sean Fraser confirmed his government’s intent to implement measures to reduce the number of residences being used by owners as short-term rentals.

“I think we have opportunities to reduce the number of units used for this purpose and to increase the number of units available in general for the population,” Mr. Fraser said in French to reporters on Nov. 20.

The day before the Liberals were set to present their fall budget update, the minister was asked by reporters about his government’s intention to target property owners who use services like Airbnb.

Mr. Fraser did not provide details about the measure, but the Toronto Star reported on Nov. 19 that the plan would impact property owners in areas where short-term rentals are already restricted.

The minister says his government is “very much looking” at using the federal tax system to have an impact on a field outside its jurisdiction.

“The federal government doesn't necessarily have jurisdiction to prescribe exactly what may happen on the ground, which typically would fall to municipalities or potentially to provincial governments, but we do have the authority to make changes through the federal system of taxation,” he said.

The minister said this is one area the government is looking into, but not the only one.

“If there's tens of thousands of units that we can turn into, not a competitor for a hotel for a few nights, but a home for a family, to a community, it's incumbent upon us to do everything we can to use the properties that are available for homes,” said Mr. Fraser.

The NDP, which has an agreement to keep the minority Liberals in power until 2025 in exchange for social programs investments, said it’s favourable to implement measures against short-term rentals.

“We're certainly open to the idea that there's some need for action in the short-term rental space,” NDP MP Daniel Blaikie told reporters on Nov. 20.

Mr. Blaikie, his party’s finance critic, says the problem is not homeowners who rent out their residence when they’re not at home to supplement their income, but rather those who buy units for the purpose of renting them short term.

“We think it makes sense to have the federal government get on board with those municipalities who are trying to address that problem, to expand their toolkit,” he says.

The Liberal government has increased its focus on affordability after its summer caucus retreat and amid the loss of ground to Conservatives in the polls.

Housing has been a particularly hot issue, with the average rental costs reaching record levels and homeowners and prospective buyers getting squeezed by the sharp increase in mortgage rates.

The Liberal government has focused on increasing the supply of housing through various initiatives, but has not sought to curb demand by revisiting record levels of immigration.

Mr. Fraser touted in his press conference the Housing Accelerator Fund for municipalities who change zoning rules and strike deals with Ottawa to build new units. The government made a number of related announcements with cities in recent weeks.

The minister also said the low-interest loans provided to developers as part of the Rental Construction Financing Initiative are helping to create thousands of new units.

Deputy Prime Minister Chrystia Freeland announced on Nov. 14 an investment of $1.2 billion to build 2,644 rental homes in Toronto as part of that program.
Conservative Party Leader Pierre Poilievre has repeatedly said that Prime Minister Justin Trudeau’s policies of running large deficits that drive inflation have made life in Canada unaffordable.
He noted on social media on Nov. 20 that two years after the launch of the Housing Accelerator Fund, “not a single home has been built.”