Editor's Note: This story previously appeared on StratfordToday.ca.
Amanda Hatton of Avery House is waiting to see if this is the long-anticipated action by the city’s administration that will level the playing field for bed & breakfast owners.
That action, at least for the time being, comes in two parts: the possible hiring of a bylaw enforcement officer and the introduction of the city’s new license application fees for the accommodation licensing bylaw (130-2022).
That bylaw, as Hatton and other members of the accommodations community are well aware, governs the rules and regulations applicable to various formats of short-term accommodations (bed & breakfasts, inns, short-term rentals and more). At the time that bylaw passed, Hatton recalls being told by the municipality that it would help to ‘level the playing field’ for the many different types of short-term accommodations in the city.
She’s still waiting for that to happen.
“All short-term accommodation properties were to be held to the same standard, according to the city, which sounded good in theory,” she said. “There was not a good reason provided by the City as to why the municipal accommodation tax (MAT) needed to be introduced when it was, apart from fiscal handiwork, off-loading expenses incurred by Destination Stratford on to visitors and on the backs of accommodators. This remains a sore spot for many of us and for many visitors – it was a new tax that was inequitably applied.”
Hatton was one of a few delegates to speak about the new bylaw at the February 10 council meeting, but she also voiced her support for a new bylaw enforcement officer that was part of the city’s budget for 2025. During her presentation, Hatton claimed that there are over 600 unlicensed accommodation businesses operating in Stratford currently and went as far as calling it a ‘black market’ when she began questioning what would be done about the issue.
“My simple definition of a black market is the environment where businesses operate with impunity while breaking rules, with no effort to correct the situation, no repercussions or no penalties,” she said. “By that definition, I would say yes there is a black market of accommodations in Stratford. That figure (600) comes from a City of Stratford report entitled, ‘2025 Qualitative By-Laws Business Case’ – in other words, it is the city’s own data. It doesn’t take much effort to check AirBnB or VRBO to see dozens and dozens of Stratford properties listed that are not licensed and are not paying the MAT.”
Hatton went on to speculate that some of the unlicensed properties are actually collecting the four per cent tax from their guests and simply not remitting the funds. That adversely affects those businesses which follow the rules, she said, in multiple ways.
“Increased liability insurance coverage is required, and ongoing investments in safety measures as required by periodic changes in the building codes and bylaws are some of what we who follow the rules have to deal with,” she said. “We also have annual inspections by the city, fire inspections, and time spent collecting and remitting the MAT, which is an extremely cumbersome process. On top of all that, you need to take into account the zoning bylaws, the building codes and more – there are a ton of rules we need to follow and they all come with significant costs. Others avoid those costs entirely by just not following the rules and that doesn’t seem right.”
Hatton wasn’t the only accommodator to speak her mind, as Pamela Mountain of Stamphouse B&B also delegated in support of the new bylaw enforcement position. Like Hatton, she’s looking for things to be made fair and applied equally across the board.
“If you are providing short-term accommodations in Stratford, you should be playing by the rules and you should be paying for a license and conforming to the city’s zoning bylaws and have an annual fire inspection,” she said. “These things cost money and the MAT involves extra bookkeeping, which is an additional expense, so it’s unfair that currently many businesses are allowed to operate without having to incur the same fees and work that those of us who comply with the rules do.”
Mountain said she would be speculating if she claimed unlicensed accommodations were taking away business from her, but she reasoned out that it could be happening.
“They may be taking away potential guests who would rather not have to pay the extra tax,” she said. “The other problem in there being unlicensed accommodation businesses is the safety aspect. We have had to renovate our home and build a second driveway in order to comply with the zoning bylaws and with the fire inspection requirements. These were not inexpensive costs we had to incur. And we have to pay a very high rate of liability insurance. Unlicensed businesses that may not be conforming to zoning regulations and that have not passed a fire safety inspection may be unsafe. We only need to look at the tragedy that occurred in Montreal to understand that unregulated businesses are risky, and should a similar tragedy occur at an unlicensed business in Stratford, this would be terrible for the people involved and not a good thing for the city.”
Hiring a bylaw supervisor would only be the start of solving the issue, Hatton said, as the backlog of complaints that have been logged with the city would be time consuming to work through. If you take the 600 illegal businesses at face value and use the city’s own calculations from the management report that accompanied the new bylaw amendment on Monday, she said the time involved in sorting all of the complaints out would span months at the shortest time frame.
“It’s B.S. to say that the city can’t afford to hire these positions, as not only would the MAT revenue generated far exceed the salaries and benefits for the new hires, the return on investment would be enormously positive,” Hatton stated. “There are rules spelled out in the byawls that are designed to provide overnight guests with a safe, clean, hazard-free place to sleep, and I think those safety and quality standards are valuable and worth enforcing.”
The idea was floated that operators who are currently licensed and within compliance of the accommodation bylaws may be tempted to switch their position from frustration and become unlicensed operators, but Hatton said that this is not the wish of the majority. They favour operating within the system – as long as the city fixes it.
“Most of us want to follow the rules, and we just want everyone to follow the rules,” she said. “We shared the results of a petition with the city’s leaders at Monday’s meeting in which 36 accommodation providers indicated that they would be revisiting their approach to licensing and MAT if the city didn’t address the non-compliance issue.”
Mountain called that threat a ‘wake-up call for the mayor and city councillors’.
“How can they expect those of us who comply with the rules to continue to do so when they know there are so many other businesses who are not compliant,” she said. “If you lived on the north side of the street and had to pay property taxes but everyone on the south side of the street didn’t have to pay, how would you feel? We’ve been telling the city about the situation for years now, and our patience is running thin. One would hope that the threat of losing the income from businesses, who up until now have been compliant, would shake the city out of its complacency. If those of us who have been compliant stop paying for our licenses and collecting and remitting the MAT, then there is no one to blame but the city.”