Ottawa urged to take action on ‘sharing’ services: report

WATCH ABOVE: The Ontario Chamber of Commerce says the province could benefit from companies like Uber and Airbnb but better regulation of insurance and taxes is needed first. Marianne Dimain reports.

TORONTO – More Canadians are hiring Uber taxis and renting space through Airbnb, but the lack of extensive study has made the meteoric rise of the so-called sharing economy practically fall off the radar of politicians.

The Ontario Chamber of Commerce issued a report on Tuesday urging Ottawa to take a more serious look at the sharing economy to ensure its “full potential” is being tapped, while other related workforce trouble areas – like insurance gaps and tax compliance shortfalls – are dealt with sooner rather than later.

The report pressures leaders to take action on “sharing” services, a growing part of the economy that has ruffled many feathers but ultimately led to little regulation in Canada.

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Disgruntled taxi drivers have raised concerns about the impact mostly unregulated services like Uber have on their business, while some hotel chains have begun to take a defensive stance against Airbnb by launching competing services in some parts of the world.

“This is a new reality and politicians have been very slow catching up,” said Gabor Forgacs, an associate professor with the Ted Rogers School of Hospitality and Tourism Management at Ryerson University.

READ MORE: Quebec government open to legalizing Uber-style taxis

“When it comes to election time, if it’s not a burning issue, politicians will not try to take a stand.”

The growth of the sharing economy is not expected to slow any time soon.

In a separate report last year, consultancy firm PwC estimated that annual revenues from the global sharing economy will soar to $335 billion by 2025, up from about $15 billion this year.

While it’s unclear how much of that money will come from the Canadian economy, the Ontario Chamber of Commerce report helps quantify the impact.

About one in five residents in the Greater Toronto Area have used Uber’s services, Leger said in a poll that was conducted earlier this month and included in the chamber of commerce report.

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The online survey was taken between Aug. 3 and Aug. 6 among 1,003 Ontarians who were part of a Leger panel.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

The chamber of commerce report, titled “Harnessing the Power of the Sharing Economy,” is one of few to acknowledge the growing impact of these upstart technology businesses on the Canadian economy.

READ MORE: Uber stands ground in ongoing scrap with taxis, governments in Canada

Among its recommendations, the report encourages governments to form a task force to scour this growth industry and identify areas where government intervention is needed to protect the public interest or remove barriers to innovation.

The chamber of commerce said the task force’s findings could provide the basis for widespread changes in regulations.

In the provincial budget earlier this year, the Ontario government acknowledged the growth of the sharing economy, saying that “aspects of the regulatory and taxation environment may need to adapt to new and previously unconsidered business models.”

The Ontario Chamber of Commerce says the provincial government can’t handle the complexity of the sharing economy on its own. Some regulatory issues would also fall to both municipal and federal jurisdiction, it said.

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“Therefore, development of a proactive and flexible approach to the growth of the sharing economy requires commitment and action from all levels of government,” the report said.

Within political circles, the burgeoning industry has left some wings of the federal government concerned about the fallout.

The Canada Revenue Agency listed the sharing economy as one of the “risks” it’s monitoring, according to documents obtained by The Canadian Press through Access to Information laws.

READ MORE: Uber is forcing Canadian cities to re-evaluate the way we take cabs

In addition to lost tax revenue, the agency says the sharing economy has implications for both Employment Insurance and the Canada Pension Plan, as people who are working in these businesses may not be paying into these programs.

Few if any of these concerns are on the radar in the run-up to the Oct. 19 federal election.

An email requesting comment from each of the political parties showed that most do not have a defined position on whether the sharing economy should be regulated.

Only the New Democrats provided an idea of where they stood, saying that responsibility for regulations falls to provincial, municipal or federal governments.

“A simple definition or one-size-fits-all solution isn’t possible,” said New Democrat MP Matthew Kellway in a statement by email.

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“We believe the federal government should foster innovation and new thinking, balanced with the need to protect consumers, while working with provincial and municipal governments in a collaborative manner.”

The federal Liberals declined to comment on regulating the sharing economy, while neither the Conservatives nor the Green party responded to requests for comment.

“It’s too new that I don’t think they have, within their own think tanks, enough reflection done on the implications,” said Forgacs.

“I don’t pretend to have any of the answers, but it’s very important that people start to ask the right questions.”

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