Good morning, Mr. Chair, and committee members. Welcome to Newfoundland and Labrador.
On behalf of the more than 500 members and the board of directors of Hospitality Newfoundland and Labrador, I would like to thank you for the opportunity to participate in the consultation process for the 2018 federal budget and share our perspective on how the federal government can ensure high levels of productivity and competitiveness among Canadians and Canadian businesses.
Globally, tourism is the world's fastest-growing sector. The United Nations World Tourism Organization estimates that in 2016, 1.2 billion people travelled the world and Canada welcomed nearly 20 million international travellers. As the global travel market flourishes, Canada must take steps to improve its competitiveness on the international stage. The tourism and travel industry offers real and sustainable economic development opportunities, versatile employment, and prosperity for all Canadians.
In Newfoundland and Labrador, the tourism industry generates more than $1 billion in annual spending, supplying more than 8% of provincial jobs and encompassing nearly 2,600 tourism businesses. Tourism is an important source of employment in the province, especially in rural communities.
Hospitality Newfoundland and Labrador recommends that the federal government commit to funding for Marine Atlantic at appropriate levels over an extended period so that it enables longer-term planning and reliability, allows for pricing that does not erode the level of service or deter travellers, and is sufficient to drive continuous improvement and cost efficiency in the service. Price is a deterrent, and the ever-increasing portion of Marine Atlantic's operating costs that users have to bear is very concerning. Furthermore, steadily increasing costs for commercial traffic is concerning as it places further financial pressures on tourism operators trying to obtain goods and services required to meet the needs of travellers. Because Marine Atlantic is a primary gateway for growing inbound tourism, user fees must be set at affordable levels for extended periods, facilitating an increase in ferry usage rates.
Hospitality Newfoundland and Labrador recommends that the federal government commit to implementing fair rules for the accommodation sector in Canada. Recently the Hotel Association of Canada released a study on Airbnb and the hotel sector in Canada with a focus on hosts with multiple units. In Canada, the average number of active Airbnb units has almost doubled in two years. What started as true home sharing has expanded into commercial operations. Legitimate and regulated businesses cannot remain competitive in a business environment that is unlevel and unfair. Hospitality Newfoundland and Labrador maintains that the key to success in the new reality of the sharing economy is equity.
Hospitality Newfoundland and Labrador recommends that the federal government help businesses address labour capacity issues by supporting timely labour market research and industry relevant export readiness and workforce development programming. According to research conducted by Tourism HR Canada, it is estimated there will be 240,000 unfilled tourism positions by the year 2035, costing the economy $31.4 billion in forgone revenue and over $4 billion in taxes.
Tourism in Newfoundland and Labrador will experience one of the most acute labour shortages of any province in Canada. More investment is required in training and educational resources and funding programs for national and provincial organizations that are working to address labour shortage issues in the tourism industry. It is important that Employment and Social Development Canada work with industry and business to continually monitor current and future employment needs. Additionally, facilitating the transition of unemployed and underemployed persons as well as new immigrants into the workforce is a positive step toward addressing the labour shortage in the industry.
Concerning proposed federal business tax changes, Hospitality Newfoundland and Labrador asks that the government ensure the impacts on small business owners and tourism operators be given serious consideration. The vast majority of Hospitality Newfoundland and Labrador members are small businesses on whom proposed federal tax changes could have considerable impact. Many small business owners have built their lives, succession plans, and retirements around the existing rules and are expressing disappointment and fear of such fundamental changes to the business tax.
Some tourism operators have cited a change in their business practices until they are fully able to assess the impact that these changes will have on their businesses and the tourism market and visitation levels.
Travel and tourism are economically important to every riding of Canada, and one of Atlantic Canada's most strategic economic sectors. In addition to job creation, tourism attracts international visitors, who consume goods and services and pay value-added taxes. With a strong commitment and strategic, deliberative action on behalf of the federal government, tourism will bring further stability and diversity to the economy, and prosperity to Canadians.
Thank you for your time.