What's Holding Canada Back?
At 1.5% growth in Canada, the tourism sector looks superficially healthy, but we are losing share of the international travel market. Prolonged and sustainable growth requires progress on larger structural issues that are preventing us from being globally competitive.
TIAC's members believe that public policy challenges in three key areas are inhibiting growth in the sector: Marketing, Access and Product.
“M” for Marketing
- Competitive and sustainable long-term funding for Destination Canada.
“A” for Access
- More competitive tax and visa policy
- Aviation Taxes & Fees: Canada is a “Fly-to” destination – and our cost structure is a barrier to success. Airport rents, fuel taxes and security fees have rendered us 105th in the world for aviation cost structure according to the World Economic Forum.
- Visas & Border Issues:Facilitating the process of crossing the Canadian border is essential for generating more business and leisure travellers. Improve border access and infrastructure; build on pre-clearance services and trusted traveller programs; and build an effective visa system to encourage visitors from key emerging markets including Brazil, Russia, India, China and Mexico
“P” for Product
- Investments in tourism products owned by federal and provincial governments (parks, museums and heritage areas), and renewal of support for attractions and festivals creates urgencies for travellers to choose Canada.
What do the experts have to say?
26 Things Holding Canada Back, Canadian Business Magazine, August 2012
#11: Insufficient Tourism Marketing
“…while other nations are aggressively promoting themselves, Ottawa chose to slash the tourism commission’s budget…”
#13: Pricey Plane Seats
“Time for Ottawa to stop viewing airlines as revenue sources and see them as tools for economic growth.”
Driven Away: Why More Canadians are Choosing Border Airports, Conference Board of Canada, October, 2012
“No single factor can be identified as the overwhelming cause for this gap [between Canadian and U.S. airfares]. Rather, a large number of relatively small factors all contribute to the gap, with the result being a loss in passengers for Canadian airports, along with their business revenues and related government tax receipts.”
The Standing Senate Committee on Transport and Communications, June 5, 2012
Excerpt from the Committee's press release:
After hearing from dozens of witnesses over the past two years in connection with its study on emerging issues related to the Canadian airline industry, the committee has determined that “the Government of Canada should stop treating airports as a source of public revenue, such as toll booths, and start treating them as economic spark plugs,” said Senator Dennis Dawson, chair of the committee. “It should stop charging airports ground rent and plan to transfer Canada’s main airports to the authorities that already operate them.”
International Travellers have Choice
Like all other export consumers, the burgeoning international travel class has choice… and increasingly, people are choosing not to pay high Canadian taxes or deal with red tape to come here.
There is a strong domestic tourism sector, pacing better than the Canadian economy. But internationally, our competitiveness is being thwarted by a series of historical decisions. The Canadian tourism industry has incredible potential and structural impediments are not insurmountable.