Good afternoon. Thank you, Mr. Chair and the committee, for inviting Northwest Territories Tourism to be part of this really important conversation, and also for the rapid response that's been taken to help Canadians weather what is an unprecedented health and economic storm.
I just want to start by giving you a little of the Northwest Territories context, because I think that will help serve my comments and feedback on some of the federal programs.
In 2019, the Northwest Territories welcomed 120,000 visitors, and we had $210 million directly injected into our economy. While those numbers sound small relative to some of the larger centres in Canada as a whole, we've seen a 42% growth in our tourism industry over the past five years. In 2015, Stats Canada said there was about one in 14 jobs—there are 3,000 jobs in the Northwest Territories—with a 42% growth, so there are a lot more people in the Northwest Territories working in this industry and relying on it for their livelihoods.
We have a very unique visitor profile, because the bulk of our visitation actually comes in two very distinct periods: summer, like many Canadian destinations, for a variety of outdoor adventure and experiences; and more importantly, fall and winter for aurora tourism. Summer visitation for the Northwest Territories actually comes primarily from North America, and summer is when those travels go into the regions where we have small communities that are road-accessible. It's really those small indigenous communities that are going to feel the pinch when our summer tourism is immobilized by COVID-19. The summer season for us is actually much shorter than the summer season when you think about other jurisdictions in Canada, because many of our small operators have an eight- to 10-week window in which to capture the revenue that sustains their businesses.
The aurora season actually relies on international visitation from Japan, South Korea and China. China is 17% of total visitors to our territory annually as of last year.
As you can imagine, with our winter visitation profile as I've just outlined, it means the impact of COVID-19 hit us hard and hit us fast, similar to what you heard from Susie. It hit our territory early in the process, because it came in our peak aurora season. It started late in January, escalated into February and hit full form in March, when the territory was shut down to visitation. Tour operators, hotels, restaurants, airlines and retailers saw business grind to an absolute halt in March, when it's normally their peak winter season. For two of our largest hotels in the capital city, which underpin our industry’s success across the territory, their combined private sector investments of close to $60 million over the last few years, which rely on visitation revenues for capital repayment, are now at risk and they are struggling.
The Government of the Northwest Territories recently conducted an industry survey to determine the impacts of COVID-19. The survey closed at the end of March. I want to share with the committee that 77% of those surveyed had already closed temporarily, 36% had laid off or terminated employees, 30% had reduced their services to cut costs, 27% had reduced staff hours and 3% already said they had closed permanently. More than 300 people—again a small number in a big field, but big for here—had already lost their jobs. This impact has primarily been felt in the capital city, but those effects are now being felt in the smaller regional communities and we're hearing loud and clear from them.
Hunting, fishing, paddling and outdoor adventure companies are experiencing cancellations and demands for returns on their deposits from their customers. Many of these small companies operate only in summer, and they've used their customer deposits already to bring their supplies to remote camps or to make investments in capital upgrades so that they are ready to host these visitors, and these visitors are no longer coming in this short season.
What we’re hearing from our members is that many are struggling to find federal help that fits the size or the nature of their business, which is seasonal.
For many of the small seasonal tourism businesses, the Canada emergency wage subsidy is not going to apply. For summer operators, employers will not see at least 30% of their revenue drop until the season is over. Their immediate challenge is ensuring they actually have enough cash to keep their operations afloat. Without better support to really ensure liquidity, we're worried that these businesses aren't going to survive to see the end of this pandemic.
Other options for liquidity, such as the Canada emergency business account, require organizations to demonstrate they've paid between $50,000 and $1 million in payroll by 2019. What we're hearing from our tourism operations is that they're all small companies and many of the owners are not actually on the payroll, so they're not going to be able to meet these thresholds.
The government's move to support income via the Canada emergency response benefit is a positive step, and we're hearing that, but the industry needs employment benefits for sole proprietors. We're hearing from business owners here that they're confused about their eligibility and they're not sure how to apply. They need to know who to talk to in the Northwest Territories to get the clarification they need, and they can't find their way.
Measures like work sharing are incredibly important for some businesses to maintain employees when there isn't enough work, but most of our members say there's no business at all now and that's making this option not one for them.
The business credit availability program has also created confusion regarding access for our industry members. Financial institutions aren't available in many of our communities, and even when they are, they often don't have the information on the program to help our businesses figure out if they qualify. Some industry members who own their own properties have said that they have secured the mortgage deferral and it's a help, but those who are renters have to negotiate with property managers with no financial supports available at this time at the federal level. These businesses are asking for some sort of aid for the overhead costs they must incur to keep their business afloat until they see revenue streams begin to flow again.
I hope I've painted a picture that the Northwest Territories is really reliant on a number of things in tourism. Underneath all of that is a network of small airlines that move people and cargo into and throughout the Northwest Territories. We've seen the ground lease rents for airport authorities waived, and this is positive, but currently airlines and airline schedules have been reduced or cancelled altogether, and the situation for these little businesses is quite extreme. Just yesterday I had a small airline member call and advise me that, although it's short, the summer tourism season sustains their winter operations, which serve the residents. Small airlines are flying essential cargo, they're flying food to our communities and they are also the connection to the health care services offered in larger centres. We don't see right now, in any of the financial options available, programs that will bring relief to these small airlines that are the lifelines of our communities.
These are some examples of what we've heard from our members of the Northwest Territories tourism industry and their views on the federal programs announced to date. While I know I have focused mainly on gaps and what needs to be addressed to help the Northwest Territories' situation, I do want to say and I feel it's important to say, that Canada's response has been rapid in the face of an unprecedented situation. Your invitation made to me today underscores Canada's commitment to ensuring that the NWT and the north doesn't fall through the cracks. It gives me great confidence that the federal government is looking to ensure that all Canadians come out of this crisis strong, together.
Thank you for your time today and for your work on behalf of all Canadians.