TIAC Hill Days 2022
TIAC Hill Days 2022 – Key Recommendations
TIAC’s Hill Days 2022 meetings will be focused on what the industry needs to recover and rise and what difference it will mean to Canadians and the economy in general.
TIAC has identified a number of priorities, regrouping them under three broad headings:
i. Branding and Barriers
ii. Financial Support and;
iii. Labour Shortage in Tourism.
1. The Travel Narrative, Barriers and Branding
a. Key to kick-starting the recovery of Canada’s travel economy rests on a number of factors that have a direct bearing on travellers’ perception. These include updating the current narrative used by government around travel, eliminating barriers to travel, and correcting the current perception both international and domestic travellers now have about Canada and travelling abroad.
b. In many countries around the world, Canada is now perceived as closed for tourism business, and that Canada is too complicated to travel to with all its requirements.
c. The business meetings, events, exhibitions, conventions, and incentive travel (MC&IT) sector represented a significant proportion of overall tourism industry activity. Pre-COVID it was worth $41 billion in total spending, $9.4 billion of which came from international sources. In other words, international business events taking place in Canada accounted for close to 10% of all tourism industry spending. The sector overall contributed $24.3 billion to Canada’s GDP and sustained 229,000 direct jobs.
d. As a result of the pandemic and border closures, however, the MC&IT sector effectively ground to a halt. The number of business events in Canada fell from 3,421 in 2019 to just 451 in 2020. And the majority of those that did occur in 2020 took place in the first quarter before the pandemic struck. TIAC recommends that;
i. The Government allocate additional funding and support to launch a public awareness campaign to change the narrative about safety and meetings and to stress that our borders are open; and,
ii. The annual budget of Destinations Canada be increased and that a greater share of its budget be earmarked specifically to brand and promote the business events sector in Canada.
2. Supporting the Hardest Hit Sectors
There are a number of assistance programs in support of businesses that we believe could be improved and/or modified to better meets the needs of operators in tourism and better position the industry for faster growth. And, new financial support is needed in key priority areas.
a. The Tourism and Hospitality Recovery Program (THRP) provides support through the wage and rent subsidy programs to tourism and hospitality operators, with a subsidy rate of up to 75%.
b. The key issues with the THRP relate to i) the decrease of the subsidy rate by half in March and its sunsetting in May 2022, ii) the 40% current-month revenue loss requirement, iii) the calculation of the current-month subsidy for seasonal businesses, and iv) eligibility of new businesses.
c. We recommend;
i. That the subsidy rates of the THRP be maintained at their current levels beyond March 2022, and that the THRP remain available to eligible businesses until September 1, 2022.
ii. That the minimum current-month revenue loss requirement be lowered from 40% to 25% for eligible companies to access the THRP.
iii. The THRP be modified for seasonal businesses such that the average monthly revenue reduction over the first 13 qualifying periods for the Canada Emergency Wage Subsidy be used for subsidy claims in each month from October 2021 to whenever the program sunsets where revenue in the applicable period is less then 5% of the annual revenue.
iv. Implement a refundable tax credit for new businesses that meet the industry definitions under THRP and that began operations at any time during the first 13 qualifying periods for the Canada Emergency Wage Subsidy. The tax credit would apply to wages and CERS related expenses at rates that would provide support as favourable as those provided by the THRP.
d. The Tourism Relief Fund (TRF) was announced to help tourism businesses and organizations recover from the pandemic and grow. Half of the resources in this Fund were intended to be disbursed in 2021/22 and the other half in 2022/23. We highlight a number of issues related to the TRF that, if addressed, we believe would enhance the effectiveness of this particulate program in helping tourism businesses and organizations recover from the pandemic.
i. We recommend that the Tourism Relief Fund be allocated an additional $250 million to extend it until the end of 2023/24, and that the Fund be amended to provide for more operational support with clearly articulated guidelines; to either significantly lower or eliminate the cost-matching requirements; to deem 50% of the contribution to large projects as non-repayable; and, to provide access by all sole-proprietor operators on a case-by case basis as resources are available.
e. Indigenous Tourism support
i. In 2019, Indigenous tourism employed 39,000 employees and brought in an estimated $1.9 billion in direct GDP. However, research showed that by 2020 Canada’s Indigenous tourism sector had experienced a 65.9% decline in direct GDP (down to $555 million) and a 59.4% decline in employment (down to 14,624 jobs), due to COVID-19 and the global tourism industry grinding to a halt.
ii. Indigenous communities that rely heavily on tourism have been disproportionately impacted by the COVID pandemic.
iii. In January 2022, ITAC released it Building Back Better strategy, a comprehensive three-year plan to fully recover the Indigenous tourism sector by 2025, with the aim of re-achieving $1.9 billion in direct GDP contributions, 1,900 Indigenous tourism businesses, and 40,000 Indigenous tourism employees. To fully execute on its Strategy, ITAC estimates that it would require $65 million over three-years.
• We recommend that the Government allocate the necessary resources to help the Indigenous tourism sector recover from the impact of the pandemic.
3. Labour Shortage in the Tourism Industry
a. The recovery of the tourism industry in Canada largely hinges on addressing the significant labour shortages that currently exist. This issue is complex, and one that will require a concerted effort and close collaboration between private- and public-sector partners across all levels of government to effectively deal with. It will also require the articulation of a well-thought-out strategy that will likely span a number of years to fully implement, and such a strategy will require considerable financial resources to deliver.
b. While a cost estimate related to the execution and implementation of the Tourism Labour Strategy can not be undertaken at this time given the embryonic stage of this broad initiative, we nonetheless know that some financial resources will be required over the coming year, and likely for a number of years to come. Given the priority the tourism industry ascribes to this issue and its critical importance to helping rebuild the travel economy, we nonetheless make the following recommendation that:
i. The Government consider allocating considerable financial resources in the 2022/23 Federal Budget for the further development and implementation of the Tourism Labour Strategy.
Founded in 1930 to encourage the development of tourism in Canada, TIAC serves today as the national private-sector advocate for this $102 billion sector. Based in Ottawa, TIAC takes action on behalf of Canadian tourism businesses and promotes positive measures that help the industry grow and prosper.
TIAC is responsible for representing tourism interests at the national level, and its advocacy work involves promoting and supporting policies, programs and activities that will benefit the sector's growth and development.
TIAC's membership reflects partnerships among all sectors of the industry, and provincial, territorial, and regional tourism associations, enabling the association to address the full range of issues facing Canadian tourism.
Learn more about TIAC, its mission, mandate, and more, here.
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