Finance Committee on Oct. 20th, 2014

[David McKenna]

I've been burned at a board meeting before, so....

[Voices]

Oh, oh!

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Looking back, in representing a riding that is on the border with Maine in the U.S., we have a lot of people going back and forth, and a lot of things happen even on daily trips, just based on the exchange rate. Here's what I'd like to understand a little bit. If you look back over the past decade and a half, when the exchange rate was down, then up, and now is back down again, what is your impression or what do you estimate is the impact of a protracted dollar in the range of 85¢ to 90¢?

[David McKenna]

It would have a material impact on the decision-making in the States. In particular, most people do their own travel planning now, especially in North America, and are booking online. They would see the Canadian dollar converted into U.S. dollars on whatever source they're using, so they would automatically see that found discount of roughly 20% on what normalized hotel stays would be, say, or air transportation.

[The Vice-Chair, NDP, Nathan Cullen]

Thank you very much, Mr. Allen.

We'll go over to Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

Thank you to all the witnesses.

Mr. McKenna of the Tourism Industry Association of Canada, it won't be a surprise to you that as the member of Parliament for Victoria I'm going to start my questions with you. You properly point out that there are 933 tourism businesses in my riding, with 9,215 direct employees, and I'm going to say a lot more in the multiplier.

I first of all want to say congratulations to your organization on Mr. Goldstein's elevation, or at least transfer, to the job of CEO at the Canadian Tourism Commission. I think that's a real tribute to your organization and, of course, to his skills. He's been a witness here on many occasions.

I want to start with the Connecting America program, which is very big in our part of the world because obviously so many of the tourists have traditionally come from the State of Washington and from Oregon and California. Yet the Canadian government has seen fit not to fund that and has let the provinces and other organizations, rather than the CTC, put money into it. Do you see any change on the horizon based on your advocacy here today?

[David McKenna]

Yes. I believe that market economics are such that we'll see a change and there will be much broader support for reconnecting with the United States' marketing efforts. I think that current thinking within the CTC, under David's new leadership, will also fundamentally change.

[Murray Rankin, NDP, Victoria, BC]

If I could just explore that a little further with you, your brochure talks about the Connecting America program, the need for this new, three-year, targeted, coordinated program: marketing co-investment. I think you're proposing a matched industry and government sponsored program, a 50-50 sharing, $35 million over three years. That's what you're here to ask this finance committee to recommend in the budget. Do I have that correct?

[David McKenna]

That's pretty much correct, except that industry and our marketing associations may be able to do a two-dollar match for every dollar given by the federal government.

[Murray Rankin, NDP, Victoria, BC]

I see. Well, that's encouraging.

I was really saddened to see what you pointed out here, which is that growth in world arrivals in 2013 was 5% globally but only 1.5% in Canada. You're suggesting a number of things be done about it. Just to build on something Mr. Brison was alluding to, one of the problems surely is the state of our airports and the expense of our airports.

I know in my part of the world it's significantly cheaper to go to airports south of the border, to fly in and out, than it is to use our Canadian airports. We're simply pricing ourselves out of the market.

Do you hear people talking to you about that particular issue?

[David McKenna]

That would be the number one issue we do talk about in terms of international access. After market economics dictate that the consumer trend and confidence are returning, then we have to have the accessible gateways, and frankly our gateways are more expensive than those going into Europe or into the United States or into some of the BRIC countries as we were talking about earlier.

[Murray Rankin, NDP, Victoria, BC]

Right, and you point out just how vibrant the American market has historically been and how their economy is recovering. There's been a 100% increase since 2001 in passports and no visa requirements. It's an obvious place to invest money.

One factor you didn't raise, which I think I've heard Mr. Goldstein refer to in the past when comparing overseas visitors to Canada to American visitors to Canada, is the simple fact that they come back much more often. The person from China, to use your example earlier, might come once in a trip of a lifetime, but that would be it, whereas we have over and over again members of that American family coming to Canada. Surely that's a huge multiplier, and therefore an obvious reason to make that investment in promoting American tourism.

[David McKenna]

You are absolutely correct in that assumption. The overseas travellers do tend to stay longer with us than the U.S. travellers do, but the U.S. travellers do return. Not only do they return numerous times, and I can attest to that from direct experience, but they also then encourage visiting friends and family that they must go up to Canada and visit Cape Breton, or P.E.I., or whatever it is.

[Murray Rankin, NDP, Victoria, BC]

That's precisely it.

I'd like to now turn to Ms. Cobden of the Canadian Climate Forum. Thank you for your excellent presentation.

You made a number of recommendations about the future and the need for adaptation to climate change, but how would you assess the current state of Canadian readiness vis-à-vis climate change?

[Catherine Cobden]

I would say we have certainly, as you can imagine, a strong academic engagement on this issue across the country, some of it facilitated by the climate change and atmospheric research program, but I guess what I'm saying as we start looking at the trends and the changes—that program was announced in 2011—is that since then we've had ongoing and rather extreme climatic events. I think we probably need to pause and ask if we need to do more to ensure we can answer the right questions.

[Murray Rankin, NDP, Victoria, BC]

I was in Edmonton and heard Mayor Iveson of Edmonton give an example, which I think was similar to what you said and something many Canadians wouldn't know about. He said the thunderstorms from the Rockies over to Edmonton have become so much greater in the last few years that the city is now looking at having to build much larger storm sewers because of climate change. That's one example. He's looking for millions of dollars in federal funding, for example, for that kind of treatment. These are the sorts of things people don't think about when they think of climate change. You mentioned, of course, shorelines and all the other things about storm events, but it's just such an insidious problem.

I was struck by your figures. I want to make sure I got this number about the insurance losses correct. I think you said it was $3.2 billion. Was that in 2012?

[Catherine Cobden]

It was in 2013.

[Murray Rankin, NDP, Victoria, BC]

It was in 2013.

[Catherine Cobden]

In our brief we actually have the details of that Insurance Bureau of Canada reference.

[Murray Rankin, NDP, Victoria, BC]

Right, but it was three times what it was even only three years previous to that.

[Catherine Cobden]

That's correct.

[Murray Rankin, NDP, Victoria, BC]

That's just staggering.

[Catherine Cobden]

I don't think we know how to predict what Mother Nature has in store for us.

[Murray Rankin, NDP, Victoria, BC]

You talk about the costs of the flooding in Calgary being $5 billion, and the Prairies...so it seems to me the figure is in fact infinitely larger than what you suggested if in one year you're saying insurance losses were $3.2 billion and in the same year we had $5 billion lost in Calgary.

[Catherine Cobden]

Actually that was the next year.