The policy Instrument for TIABC’s recommendation to eliminate PST and MRDT exemption

When a government or an institution wants to achieve the policy objectives they employ various methods known us policy instruments. The type of policy instrument used will determine the outcome of the policy implemented (Fletcher, Pforr & Brueckner, 2016). The primary role of TIABC is to ensure the tourism industry in British Columbia (BC) is managed effectively through advocating for proper policies. In TIABC recommendation to eliminate MRDT and PST exemption, they employed the compulsory policy instrument (policy through law) which involved the implementation of strict regulationSs such as taxation, direct provision of services, and involvement with the public enterprises. Taxation remains to be the principal instrument of public policy used by many governments around the globe (Vedung, 2017). The TIABC collaborated with the Ministry of Tourism and Small business, Sport and Cultural Development, Ministry of Community, Jobs, and Finance to institute legislation, regulations, parliamentary resolutions, and administrative acts through which the issue of short-term accommodation would be addressed.

Comparison between policies designed for municipal and provincial level

The issue of the short-term rentals (STRs) has been a significant problem in the entire region of BC. The proliferation of STRs has created enormous difficulty for most of the employees since they are not able to find affordable as well as adequate housing in the majority of the communities. Therefore, this issue consequently affects the tour operators as the number of staff needed to offer appropriate and quality services reduces. As such, the TIABC came up with policies designed for the municipal and provincial levels to tackle this issue. First, they urged all the civic politicians across the British Columbia together with the provincial government to come up with specific regulations concerning the expansion of the STRs (Konanz, 2018). They also encouraged them to implement and enforce the developed rules so that the problem of accommodation for many of the communities could be solved once and for all across the province. The enormous task, therefore, was placed in the hands of the provincial administration. They were to foresee the elimination of PST and MRDT (Municipal & Regional District Tax) tax exemption. Under this rule, any owner of a property with rooms less than four was exempted from paying the MRDT as well as the provincial sales tax. Therefore, the provincial administration implemented regulations that prevented the collection of requisite taxes on STRs by organizations such as the Airbnb and FlipKey but instead need of submitting them directly to the government (Griffiths, 2017).

Comparison between policies designed for municipal and provincial level

On the other hand, at the municipal level, the TIABC urged the local governments to develop, enforce, and implement regulations which every community can relate to regarding the STRs (Nepal, 2008). They were to ensure the local property owners give out their rooms for rent by following the proper legal procedure and also create a standard level playing ground for all the traditional accommodation providers such as the resorts, restaurants, and hotels. The idea was to institute rules and regulations that would fight for tax fairness and compliance (Konanz, 2018). By doing so, there will be an establishment of a fair competitive environment amongst the short-term accommodation provider such as motels and hotels.

The policies designed for the municipal level are better compared to those directed towards the provincial level- the sole reason being that these policies are targeting the local communities and residents that are linked directly to the tourist’s site and the tourists themselves. Therefore, these policies have led to enormous success in the tourism industry across the BC whereby the licensing and taxation of the STRs has enhanced the development of the tourism sector. Moreover, these regulations have created a healthy relationship and conducive environment whereby the local government, traditional accommodation operators, and residents through peaceful dialogue work together in finding housing solutions, hence creating an unbiased playing fielding thereby everyone gets to win even the guests.

As compared to the long-term monthly leases of the tenants, the STRs generates higher revenue through their nightly rentals. Therefore, the introduction of the policies that regulated the STRs came as a loss to many communities offering these services. The policy of the TIABC was to ensure that the booking platform collects the MRDT and PST at the source, and all the data as well has to be analyzed and forwarded to the province. On the brighter side, this guaranteed that there was an accurate estimation of the tax revenue collected from all the tourists’ activities. The local government also will ascertain the protection of guests who book these rentals, and in case of any catastrophe, they can be compensated for the loss of their items. To a more significant extent, the introduction and implementation of these policies have solved the problem of the rental accommodation experienced around the BC (Sawatzky, 2016). Re-entry of the provincial government into this issue has seen a balance between the STRs and tourism operators in resort communities.

Specific policies to address the lack of affordable accommodations for tourism workers

Other specific policies that will help in addressing the lack of affordable accommodation for tourism workers

The housing crisis has been on the rise for many years in British Columbia. Currently, no single policy has been able to reverse the declining affordability of houses in BC. Various factors such as security, cost, demand, and supply influence the operations of accommodation for tourism workers (Barrutia & Echebarria, 2015). Therefore, various policies need to be implemented to help curb the rising incidence of lack of accommodation. One of these policies is building partnerships with indigenous organizations, the private sector, and non-profits organizations. Creation of a housing hub through collaboration with the Equity Partnership Program and BC Home Owner Mortgage will lead to the building of affordable homes that the BC tourism workers can afford. Creation of affordable houses requires input from all the sectors such as the BC Municipalities, the federal government, local governments as well as innovators in the non-profit and private sectors (Harding & Jenkinson, 2018). The housing project will require funding to build new houses and also renovate the current buildings to make them comfortable for the guests and the workers. However, in making this a success, certain factors need to be put into consideration. For instance, there is a need to calculate the rate of return for the investors accurately. Through this collaboration, it will not only offer affordable houses but also expand transit hence creating homes around the transit stations that can be obtained at reasonable prices. It’s important to note that most of the guest approximately 90% arrive in BC via the BC Ferries. Therefore, investing in developing a fast ferry and building more houses along the stopovers will ease the problem of lack of houses both for the guest and the workers as well (Harding & Jenkinson, 2018).

Another policy that can help curb the increasing difficulty of finding an affordable house for the tourist workers is the crackdown of the duty fraudsters and closing any loopholes. Corruption and fraud negatively influence real estate through the distortion of the housing prices. There has been reported incidences of people skirting the tax system such as people who do not live in BC applying for the Homeowner Grant or claiming for over one home being the principal residence. In implementing this policy, the Provincial government needs to strengthen the tax administrators’ audit and close any information gaps as well as ensuring tax compliance (Vedung, 2017). Within the BC, there is hidden ownership of the real estate. The actual owners such as offshore and domestic trusts, private companies, and stand-in owners are not known and, therefore, they block the source of funds for the market. Lack of transparency as well in the land registry affects the housing industry. As such, it is crucial for the Provincial government to obtain all the necessary information concerning the rightful owner of the land and corporations.

Consequently, data regarding the beneficial ownership of land and properties as stipulated by the Land Title Survey Authority need to be forwarded to the provincial and federal tax and law enforcement authorities to aid in investigations. Such information will play a huge role in assisting the Provincial administration in closing loopholes for money laundering. Introduction of administrative penalties for non-compliance also makes people pay their duties and adhere to the set regulations. Fighting corruption, closing every loophole, and preventing money laundering increases the amount of revenue collected by the Provincial and Municipalities thereby they can re-invest in the expansion of housing hence making them available at affordable prices (De Sanctis, 2017). Implementation of these policies also they will play a significant role in stabilizing housing prices for all the classes of the people. Fairness is vital for all people regardless of their status quo, race, where they come from, or the industry they are working for within the BC. Therefore, the creation of affordable housing prices relies not only on the Federal government but also requires collaboration from other parties such as the local communities, local government, investors, and the private sectors. By agreeing to work together, they can enhance the implementation of these policies hence creating affordable housing houses around the BC for the tourist workers.

References

Barrutia, J. M., & Echebarria, C. (2015). Factors affecting the attitude of tourism-destination local authorities towards sustainable planning tools in a networking context: The Balearic Sustainability Network. Journal of Sustainable Tourism, 23(2), 207-233.

De Sanctis, F. M. (2017). Money Laundering Through Real Estate. In International Money Laundering Through Real Estate and Agribusiness (pp. 1-23). Springer, Cham.

Fletcher, C., Pforr, C., & Brueckner, M. (2016). Factors influencing Indigenous engagement in tourism development: an international perspective. Journal of Sustainable Tourism, 24(8-9), 1100-1120.

Griffiths, S. L. (2017). Where Home Meets Hotel: Regulating tourist accommodations in the age of Airbnb.

Harding, R., & Jenkinson, P. (2018). 10 Municipal Approaches to Poverty Reduction in British Columbia. Small Cities, Big Issues: Reconceiving Community in a Neoliberal Era.

Konanz, H. R. (2018). Lobbying in British Columbia’s designated resort municipalities: the case of short term rentals (Doctoral dissertation, University of British Columbia).

Nepal, S. K. (2008). Residents’ attitudes to tourism in central British Columbia, Canada. Tourism Geographies, 10(1), 42-65.

Sawatzky, K. (2016). Short-term consequences: Investigating the extent, nature and rental housing implications of Airbnb listings in Vancouver.

Vedung, E. (2017). Policy instruments: typologies and theories. In Carrots, sticks and sermons (pp. 21-58). Routledge.