Recent News > Now Boarding: Canada's Gateway to Driving Export Success

Now Boarding: Canada's Gateway to Driving Export Success

posted on March 13, 2014

In today's National Post newspaper, David Goldstein, President & CEO of the Tourism Industry Association of Canada (TIAC), published an opinion editorial (see below or page 13 in paper) discussing the economic importance of travel and tourism's role in expanding Canadian exports and the need to re-assert our once-strong presence in the US market.


 

Thursday, March 13, 2014

 
Now Boarding: Canada's Gateway to Driving Export Success
 
 
March break is upon us, which means that thousands of families are off on vacation, perhaps somewhere in Canada, or someplace warm. All the packed cars and bustling airports, train stations and hotels represents the fourth fastest-growing export sector in the world: travel and tourism. While most exporters bring goods and services to their customers, the tourism sector brings customers to the products and services -- to the tune of $17-billion in 2013, making travel Canada's third-largest export sector.

Increasing travel to Canada is not just about airlines, hotels, restaurants, retail and attractions. As a proven economic accelerator for other export sectors, travel is our gateway to growth. Intuitively, people do business with those who they know and like. Perhaps more importantly -- as outlined in a recent econometric review by Deloitte -- countries that experience higher levels of reciprocal travel generate increased levels of trade and investment with one another. According to Deloitte, every 1% increase in international arrivals to Canada stimulates over $800-million worth of broader exports with our trading partners. Increasing tourism by 5% would thus create almost $4-billion in incremental trade activity.

It is within that context that recent commentary on the depreciation of the Canadian dollar against the U.S. greenback deserves some clarity. While a lower Canadian dollar certainly does not hurt, too many analysts are quick to hail it as a boon for export sectors such as tourism. It's not that simple. Travel is purposeful. It's an experience, not a commodity.

We believe Bank of Canada governor Stephen Poloz got it right in February when he said, "the US Economy is gathering momentum ... if the strong US dollar is a symptom of that, then that's a welcome development. It's not about what theCanadian dollar is, per se."

Like other export sectors, the tourism industry is intently interested in diversification. In partnership with the Canadian Tourism Commission, Canada has seen important growth in the number of visitors from key emerging markets, including double-digit annual growth of Chinese tourists since 2011. That said, global growth in visitation was up 5% last year, yet Canada's arrivals were only up 1.5% -- nowhere near our fair share.

Canada has been a historic leader in this space, and can be a competitive destination once again. The Tourism Industry Association of Canada has developed a plan to increase Canada's competitiveness as an international destination leading up to 2017. Coming out of the recession, the industry has invested, and continues to invest, billions in accommodations, transportation, attractions and experiences. We have also set out a series of key policy initiatives that can be implemented, with little or no cost, under the Federal Tourism Strategy, to reduced barriers to success.

Central to the strategy is reasserting our once-strong presence in the United States. Not only is the U.S. economy recovering, but Americans have increasingly become world travellers ' doubling the number of passports issued since 2002 and increasing their outbound travel by 7% in 2013 alone (Canada saw only 2.5% of that). Getting Canada back on the Americans' radar will be job number one.

The Tourism Industry Association of Canada's "Connecting America" proposal would create a three-year, $200-million campaign lead by the Canadian Tourism Commission, and driven by dollar-for-dollar co-investments from the federal government and the tourism sector. If fully funded, this investment would generate an estimated $1.56-billion in incremental tourism revenue, 2.6 million incremental U.S. visitors and grow or sustain over 6,000 Canadian jobs.

Travel can make a greater contribution to our economy by reducing our trade deficit, expanding our international non-commodities sales and creating new, only-in-Canada jobs and investments. Tourism isn't a junket; it is a deliberate and strategic incursion into a highly competitive marketplace.

Dollar devaluation helps increase tourism, but it is not a silver bullet. The Canadian tourism industry has a strategy to increase our international arrivals to equal, if not surpass, the world growth average of 5%. All partners interested in growing Canada's export success are welcome aboard.

 


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