The Nova Scotia government quietly launched a study last month of the province’s shared economy that covers companies like Airbnb and Uber.
Uber doesn’t operate in the province, but Airbnb has more than 300 available rentals. The popular website allows people to market their private homes as vacation rentals, but it’s also putting the squeeze on traditional accommodations such as hotels.
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In Nova Scotia, the average Airbnb rental costs $125 per night, however, the average price at the Atlantica Hotel during the tourist season is $175 per night, according to general manager and Nova Scotia Hotel Association president David Clark. The cost difference is in part linked to the fixed fees and taxes that hotels have to pay, Clark said.
“We pay tax, HST, we also pay a destination marketing levy, we pay corporate tax, we pay business insurance, we pay occupancy taxes and that type of thing,” Clark said. “From what I understand, companies like Airbnb are exempt from those fees at the moment.”
The government says it will study the companies and the impact they might have on Nova Scotia’s economy. Business Minister Mark Furey says the study will look at how many people use Airbnb, how much they make by renting out their homes or rooms on the service, and whether any legislation or regulation should be changed.
Furey and acting Nova Scotia Tourism CEO Martha Stevens both said the study would look at the uneven playing field between traditional businesses and companies that operate more informally. Neither would say whether they think current market conditions give Airbnb an advantage.
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Furey said “revenue that the province may be losing or may be able to generate” will be reviewed.
Fred Morely, former chief economist at the Greater Halifax Partnership, is being seconded from the Office of Regulatory Affairs to lead the study.
The province says it will take up to one year to complete.