City of St. Catharines deploys shocking heavy-handed tactic to help powerful hotel industry fight B&B owners

Dan and Anita Skinner are proud of their “residential oasis in the heart of downtown”.

The St. Catharines couple has been married for 49 years and considers their property with four buildings dating back to the 1800’s and clustered on a one-third-acre lot, a gem from the past. When they purchased the property in 2006 major renovations were required, but for them it was worth the money and hard work.

They loved the idea of preserving and revitalizing traditional housing in the downtown core and when all was said and done they had completely restored every building and created their own special sanctuary they call Queen Street Village.

The buildings and courtyard that comprise Queen Street Village have always been more than a family home, one of the refurbished structures is a long-term rental apartment and another is used as a bed and breakfast, ways to generate income to offset the high costs of the renovations and ongoing maintenance, while providing much needed housing in the downtown. They have been running the bed and breakfast since 2018 and are proud of their online Airbnb status as “superhosts” and “Guest favourites” and of the fact that they have never once received a single complaint.

Then in 2023, the City administration got involved in their lives, and the family dream suddenly became a nightmare.

On October 3rd, Dan received notification from the City that he was being fined $1,000 for “advertising or promoting a short-term rental without a valid license number”.

The very next day Anita received her own notification informing her that she also was being fined $1,000 for the same offence, for a total of $2,000 for not having registered their B&B with City Hall. The Skinners were certain this must be an administrative oversight, somebody had made a mistake. Afterall, B&Bs in St. Catharines were exempt from the requirement to register, they always had been.

They had always been careful about such matters and knew they were not in contravention of any rules or policies. In order to reassure themselves they went to the City’s website and were relieved to discover that B&Bs were indeed exempt from the requirement to license with the City, it said so plain as day on the website.

The penalties they had received must have been an error that would quickly be made right.

But things went from bad to worse.

As it turned out the City had, six months prior, amended the bylaw that covers B&Bs, making it obligatory for all such businesses in the city to register for a license. They had never been informed.

The Skinners immediately requested a screening hearing as they learned they were entitled to, they also emailed their elected officials to have the situation rectified. Neither of their Ward councillors, Caleb Ratzlaff and Robin McPherson, were willing to intervene on their behalf and they never heard a word from Mayor Matt Siscoe.

It became clear, they were going to be fighting this on their own.

They then engaged a lawyer for legal advice and prepared for the screening hearing. They had a deep concern as they discovered the screening officer is a municipal employee, which in their minds was a conflict of interest because impartiality or fairness would be difficult from an employee who was effectively being asked to rule against his superior who had issued the harsh decision on the $2,000 in penalties for violating a rule the couple had never been informed about. They felt all but certain the screening officer would not “side with a pair of citizens over his boss”, regardless of the facts.

At a council meeting in April 2023, while discussing the implementation of the new policies, Mayor Siscoe remarked that, “Having sat in a number of meetings with representatives from the hotel/motel industry, I think they would prefer that short-term rentals did not exist. At the last meeting they were quite pleased with the enforcement activities that our staff have undertaken… . They were quite happy with the direction the City was taking.” While he met with Niagara’s powerful hotel industry lobby, which sees short-term rentals including companies such as Airbnb as a major threat (many consumers see them as a much more affordable option) the mayor did not mention whether or not he held similar meetings with citizens who own and operate B&Bs or other short-term rentals.

The staff report on the short-term rentals and licensing effectively admits the heavy-handed penalties are required to fund the program, revealing that the costs to license short-term rentals can not be sustained solely on the money that license fees generate and points to the fact that imposing fines is the way for the program to be revenue positive. The report details how only $18,429.70 will be raised per year in license fees, and that in a little more than a year $491,300 in penalties were realized.

The provincial policy that governs these processes states that the amount of a penalty shall not be punitive in nature, and shall not exceed the amount reasonably required to promote compliance with a bylaw. The City of St. Catharines has interpreted that to mean $1,000 per person named on the mortgage, per day, even if they are married, and that the City has no responsibility to communicate effectively with its citizens before swinging such a heavy hammer that can have life altering effects.

The bylaw change was reportedly done to get control over the bad actors in the business, the party houses that can give the entire industry a bad name.

No direct efforts were made by the City to notify operators of the new requirement to obtain a license. The City placed ads on local radio and in the local newspaper, but did not reach out to the proprietors of bed and breakfasts to inform them and they had not updated their website as the Skinners noted. They say they do not read the local newspaper and do not listen to local radio; they had no idea the rules had changed.

They said emphatically that they are not against the idea of registering their business, but they are completely dismayed with the heavy-handed techniques and the complete lack of engagement from their elected officials and the unbridled willingness to hand out large fines in order to gain compliance, when all they would have needed was a simple notice from the City.

According to the McMillan Law Offices’ website, the usual approach to issuing a fine like this includes a notice from the municipality to the party in violation. Depending on the response received, the City then decides whether or not to issue a fine.

The Skinners were never afforded that opportunity; the first and only communication they received was the issuing of the penalties from the City.

They repeatedly said that if the City had notified them of the new requirement to license their bed and breakfast they would have done so. Instead they feel St. Catharines is raking in revenues on the backs of small businesses like theirs, to regulate bad actors they have been lumped in with.

The Skinners referred to comments made to them by CAO David Oakes who explained that, “there were options presented to Council and that Council chose the Cadillac Option”. When asked about his comment Oakes replied that a report was presented to council that provided an excellent overview of the options and, “I am satisfied that the options were clearly presented, however, I am always interested in improving our reports to include possible scenarios that could result with any new policy or process.”

The Skinners call the path the City has taken the “nuclear option”, taking out hundreds of good B&B operators to get at a handful of bad ones.

The pair were not surprised then, when the screening officer upheld the fines against them and advised them of their right to file an appeal with an “impartial” adjudicator. The Skinners wasted no time in moving to the next step of the appeals process, although they questioned how impartial this next level of adjudication could be, as it was still under the umbrella of the municipality.

The City clarified to The Pointer that while the initial screening officer is a municipal employee, the Hearing Officer at the next level of appeal is not; they work under a shared service with ten participating municipalities in Niagara and each municipality contributes equitably to the costs of the appeal service. The City maintains that the Hearing Officer follows processes consistently and objectively as per provincial regulations.

The Skinners are not alone in their misgivings of the way St. Catharines has chosen to implement the new system of licensing bed and breakfast operations.

Ashley Antidormi is a lifelong St. Catharines resident. She owns and operates a short-term rental in the city and also co-founded a vacation rental management company that operates across Canada. In her own words, she is “very invested in the short-term rental space.”

At a City Council meeting May 27th she echoed the Skinners in her overall support of a licensing system to ensure hosts are responsible and considerate of neighbours, but said St. Catharines is handing out violations too quickly and is being extremely heavy handed. Her company operates in various cities throughout the Niagara Region and St. Catharines is “by far” the most difficult in terms of violations and fines, she says.

At that same council meeting staff was asked by a councillor if residents were provided with a warning if they are caught operating without a license, or if they are issued a fine right away. Staff chose not to answer the question directly. It was clear that warnings were not issued and no consideration was given to the fact that many operators may not be aware of the new bylaw.

The Skinners call the approach a “business killer”. So far they are out of pocket for $2,000 in legal fees, $1,000 in fines and the untold lost revenue from being forced to keep their B&B closed through the entire five-month process of appealing their fines.

When they logged on to Zoom for their appointment with the adjudicator they discovered that two municipal employees were also present for the entire process. They decided not to object to their presence for fear it might throw their case into a negative light. They wonder what happened when the adjudicator and the senior City employee left the meeting at the same time while the adjudicator considered a decision.

In the end the adjudicator ordered the fines reduced to $500 each, leaving the Skinners to pay $1,000 in total or seek further appeal through a costly court filing. To add to their frustrations the adjudicator provided no reasons for the decision she made. They have no idea why they were given a reduction in the fine rather than having it dismissed outright.

In his delegation to City Council, Dan Skinner said the system “reeks of a meanness” and he says he chose his words very intentionally. He wanted to convey a spirit of stinginess and power instead of the type of representation of the public who give elected officials their authority in exchange for fair, equitable leadership. How would they feel if a $1,000 fine showed up suddenly in their mailbox?

The Skinners say the City “trolled” them online, that staff went online and searched for B&Bs to “pretend” to book rooms, all in an effort to get the information they required for issuing the fines.

Norm and Jana Koop understand what the Skinners have been put through, they have had a similar experience.

The couple has been married for 25 years, have lived in their home since 2007 and for the past eight years have run a bed and breakfast from their home overlooking Martindale Pond, the extra money was calculated into their retirement plans as a way to ensure they could spend the rest of their lives in the home they love.

According to Jana, when licensing came into effect they jumped on board, paid a $500 fee and arranged for the inspector to show up and approve their license. They were not at all concerned about the inspection and wanted to stay on the right side of bylaws and regulations.

When the inspection took place it did not go well for the Koops.

The inspector explained that because the basement suite they were using as a B&B had a kitchen and a locking entry door it was actually classed as a hotel/motel and therefore the application for a license could not be approved. It was explained that if they tore the kitchen out of the basement, a kitchen that was in place when they bought the house, they could then qualify as a B&B and reapply for a license.

But for them this was not an option.

Months of back and forth ensued, the Koop’s trying every reasonable thing they could think of to save their small family business. In the end they lost the struggle; according to Jana, “We just stopped renting the space, we just didn’t have the energy to fight them anymore.”

They lament the fact that recent property tax increases (a crippling 10.5 percent last year) have pushed them to the “point of clinging on by their fingernails”, and are angry with the way the City has handled this entire process.

Then there is the story of Gabriella Guo.

The single mother on a fixed income was in Romania with her son attending to a family medical emergency. When she returned home there were eight penalty notices in her mailbox, each one for $1,000.

“I was astonished! I didn’t know what I did wrong, what the notices were for.”

Her sense of astonishment was compounded the very next day when two more penalty notices arrived; the City was demanding $10,000 in fines from her, $1,000 for every day her B&B advertisement was online without her having a license.

Until the moment she received those fines she had no idea she needed a license, she had thought using her home to generate some extra income could help her offset the excessive property taxes that had been levelled by the City. She wondered, “How can it be an offense to try to offset the cost with some advertising on Airbnb?”

She quickly took down the ad to prevent more fines and wasted no time contacting the City. She explained that she is a single mom relying on child benefits and there was no way she could afford to pay $10,000. She argued that this was her first offense and she had no knowledge that the bylaw existed, she appealed to them asking that they consider waiving her penalties.

They would not be retracted.

She contacted her two Merriton Ward councillors (Greg Miller and Jackiei Lindal), neither of them responded. Again, she wrote to Mayor Siscoe and her ward councillors, telling them the bylaw is “gruesomely unfair” and how as a tax paying citizen she felt bullied by this bylaw, but, “They all hid behind the appeal process and argued the penalty was valid.” Every outreach she attempted was to no avail.

In the end the hearing officer reduced her total penalty to $5,000 and afforded her one year to pay based on her situation of “financial hardship”.

She is now trying to arrange a payment schedule with the City and figure out how she will make it all work. She says the “stress, anger and humiliation resulting from the City's apathy and meanness was palpable and lasting.” She is also determined to fight to have her money given back and the City held accountable for the anguish they have caused. To this end she is inviting anyone who is similarly aggrieved to contact her at gabriellaguo@gmail.com.

Finally there is the case of Alice Ann Hart.

She has been using her home as a B&B since 2018. With no pension or partner, her retirement plan had always been to age in place by supplementing her income with revenue generated by her home, ensuring she would not be dependent on others. The City’s new policy has turned her future upside down.

First she was fined $1,000. She immediately suspended her listing as the City instructed and sought to resolve the situation. She knew she was within the requirements of all previous policies and she attempted to get the City to reverse its steps but officials advised her she would have to go through the appeals process regardless.

She appealed the fine and won. The City, in an illustration of how poorly its strategy was managed, had actually fined her before a policy was even in place that would have required her to have a license. They had made the mistake, not her.

There was no talk from the city of compensating her for her lost time or revenues.

Then, the City passed the new bylaw and she was served another $1,000 fine, this time it came with a late fee of $59. According to her, “This literally took my breath away as I now owed $1,059 and could not continue to rent my space.”

She says there was no offer of advice or sympathetic understanding from anybody at City Hall. This started a “sort of panic where I could not believe the unfairness of my local government.”

In one of the many emails she has kept, the manager of bylaws informs her that the City did issue her a warning letter before issuing the fine, although he then goes on to further admit that the letter was never delivered to her and was returned to the City unopened. She had been out of the country tending to a sick relative and she could prove it.

The City did not change its stance and in the ensuing back and forth she was issued yet another $1,000 fine; someone at City Hall decided her listing was not taken off-line fast enough and warranted an additional fine.

Through it all Hart was steadfast that if the City had properly advised her of the new rules she would have gladly complied. Nowhere along this process has she resisted the notion of registering and being licensed.

She does not understand how the City got it so wrong. In the end, she paid $2,118.80 in fines that she is adamant she does not owe, on top of considerable lost revenue and time.

She has closed down her small business.

Four different cases, all with strikingly similar stories.

Tax-paying citizens who have always been in compliance with laws and bylaws only to find themselves owing the City thousands of dollars.

City Hall and elected officials either ignore them or offer nothing in the way of meaningful explanations or a fair resolution.

All of the former B&B operators The Pointer spoke with felt forced to close down their small home-based business and all of them feel completely bullied by their own city. They all want their money returned. They expect the City to start the regulatory process over again, but do it right.

City Council has decided to send the new policy back to staff for review and councillor Matt Harris made it plain that he expected a review of all the enforcement aspects of the heavy-handed program.

Every citizen interviewed for this article wants to see more than that, they believe that all fines that were issued without warning should be refunded, a serious process of educating operators of the new rules should begin and operators should not be forced to close their businesses down while they go through the compliance process. And they want to know where the oversight is.

Emails to the mayor and council have been sent throughout this process, with no action in return. Accountability is a major tenet of the City’s strategic plan, and these citizens want to know what that looks like.

Note: Has the new Short Term Rental or B&B bylaw negatively affected you? We want to know about it. Send an email and you will hear back.

Email: ed.smith@thepointer.com

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Ed Smith, Local Journalism Initiative Reporter, The Pointer