Toronto hotel rooms and Airbnb rentals are going to be pricier under Mayor John Tory’s new user-fee plan. And the industry is giving it a bad rating.

“Are we disappointed? Absolutely,” said Terry Mundell, president and CEO of the Greater Toronto Hotel Association.

“We continue to oppose a hotel tax. It’s not something that’s going to drive investment in Toronto,” he said.

Tory said in his speech to the Toronto Board of Trade Thursday that he supports making the city’s voluntary destination marketing fee a mandatory hotel tax at all Toronto hotels. That includes Airbnb and other online short-term rentals.

Mundell said he appreciates the inclusion of Airbnb in the Toronto mayor’s plans, but that it would hardly level the playing field.

“We still pay one of the highest hotel property taxes in North America already,” said Mundell, noting residential property taxes are also less than the commercial taxes hotels pay.

A hotel tax is estimated to contribute at least $20 million to the city’s operating budget. Comparable cities in the U.S. charge as much as 18 per cent extra on the hotel bill, he said.

“Our community wants to pay their fair share,” said Airbnb spokesperson Alex Dagg in an emailed statement.

She noted Airbnb has agreements in more than 200 jurisdictions globally to collect and remit hotel taxes on behalf of both hosts and guests.

“We are committed to working with local government officials on creating fair, sensible rules for home-sharing, including around taxation,” Dagg said.

Dagg pointed out that, earlier this year, the online renter launched a pilot project with Ontario’s finance ministry to promote consumer awareness during tax season about the unit owner’s reporting obligations.

“We already help our hosts pay taxes on the income they earn through hosting,” she added.

Julie Kwiecinski, director of provincial affairs (Ontario) at the Canadian Federation of Independent Business, said the city should, instead, find savings in each department, not impose unnecessary user fees on residents and visitors.

“Taxes like these are the easy way out,” she said after Tory’s speech.

“It’s already expensive enough to live in the city and do business here,” she said of the road tolls and hotel tax proposals outlined by the mayor.

“At the end of the day, it’s going to cost more to do business in Toronto,” she added.

One silver lining for business is that the mayor confirmed he won’t support a parking levy which would have meant charging property owners for every parking spot they offer, paid or free. They feared this would affect everything from shopping malls to funeral homes and factories.

“It was a huge grenade for our industry, so: crisis averted,” said a relieved Brooks Barnett, manager of government relations and policy for the Real Property Association of Canada (REALpac).

The industry coalition had warned that property owners, especially small businesses, would shoulder a huge double-taxation burden if a parking levy were to be implemented.

“Road tolls are the right way forward,” Barnett said.

Jan De Silva, president and CEO of the Toronto Region Board of Trade, said Tory presented “credible funding solutions” to the city’s economic woes.

“For a generation, our region went without building desperately needed transit. As the debate unfolds, the board will carefully review and comment on the details of the proposed road tolls and other measures,” said De Silva.

Tory also announced the end of a program that offers rebates to owners of vacant commercial and industrial buildings, nearly half of them downtown where property values have skyrocketed.

Under the provincially mandated program, property owners with empty commercial properties can get a rebate on their property tax bill of 30 per cent, and 35 per cent for industrial.

Barnett said the commercial vacancy rate was quite high in 2001 when the rebate was implemented, but said the industry is “very healthy” now, so it’s no longer necessary.