Mr. Chair, madam, and members of the committee, good morning, and thank you for this opportunity to discuss economic growth, an important target for the tourism industry, one for which we know we can play a capital role.
The tourism industry is a major source of wealth. Here in Canada in 2012, tourism accounted for 2% of the GDP, outperforming agriculture, fishery and the forestry industries combined. Last year, tourism generated $82 billion in revenue. For the same period, export revenue generated by international visitors spending in Canada reached $17 billion.
The 180,000 Canadian tourism businesses support 1.7 million jobs nation-wide, both directly and indirectly. Tourism is produced and consumed here. The jobs it creates can't be offshored. Tourism is good business for governments: in Quebec, $1 of public funds invested in the industry generates $5 in tax and incidental tax revenues. The positive economic impact of the tourism industry is crystal clear.
And the timing couldn't be better to capitalize on this industry since globally, tourism is booming. International tourism receipts reached USD 1 trillion in 2012—a 4% increase compared to the previous year. This performance makes tourism the fourth export sector worldwide and the World Tourism Organization is forecasting a continued growth of 3% to 4% annually until 2030.
One can easily conclude that the development of a strong Canadian tourism industry is perfectly aligned with the government's priority of fostering economic growth, job creation and long-term prosperity. However, as the industry is growing around the world, Canada is simply missing the boat and the country's market shares are plummeting! Canada's massive travel deficit is nearly $18 billion, having increased by 736% in 10 years. These incredibly poor results are extremely worrying.
Our industry has identified marketing, access and product as the three essential components of success for a destination. Here in Canada, we benefit from enviable product and infrastructures. Canada even sits at the top of the list when it comes to destination reputation. While we should be capitalizing on this positive sentiment, the lack of promotion of our destination and our aviation cost structure severely hinder our efforts and diminish the country's attractiveness.
Between 2002 and 2012, Canada cut its marketing budget by 42%. In 2014, that budget will be a mere $58 million. Over the past decade, Canada has seen a dramatic decline of its international arrivals, slipping from 7th to 16th position. Among the world's 50 most popular destinations, only 5 have seen a decrease in international arrivals and Canada is part of that group.
A competitive aviation cost structure is key for a destination aiming to attract international visitors and to encourage its population to visit and vacation in the country. Canada just doesn't cut it on that front. Our airport infrastructures are extremely well-ranked globally, but the Canadian aviation cost structure drags the country all the way down to 124th place out of 140 in terms of cost competitiveness.
We come to you with two crucial recommendations that will allow Canada to regain its strategic position on foreign markets. Firstly, for quick impact, we recommend creating ''Reconquer USA'', an additional marketing campaign aimed at our biggest proximity market and led by the Canadian Tourism Commission. Targeting a specific segment of the American market in order to generate immediate returns, this marketing campaign will utilize twinned cities to increase direct visitation from key regions across the US. “Reconquer USA” is a three-year, $35 million a year federal investment, which will be fully matched by the industry for an annual investment of $70 million. The campaign will generate $205 million in federal tax revenues; six times the investment.
Our second recommendation: a full review of Canada's aviation cost structure. Our current cost structure downloads the cost of the system onto the individual traveller, impeding the tourism industry and the economy. Just like successful tourism destinations, it is crucial to consider investment in the aviation sector as an instrument of economic development. By welcoming more international visitors through tourism, Canada has the potential to increase its exports and its overall revenues. The country must implement policies that will increase its competitiveness on the global stage.
In short, international tourism is booming. Canada has a huge travel deficit but the potential is there to generate far greater economic benefits. We must invest more in promotion and develop more competitive air travel access. Tourism is an investment. It pays off!
Thank you for your time and attention.