Thank you, everybody, for this opportunity to represent Prince Edward Island and the Tourism Industry Association of Prince Edward Island. I am also the executive director of Explore Summerside, which is the second-largest city within Prince Edward Island.
As all of you may be aware, tourism is a vital industry in Prince Edward Island. It provides over 8,600 full-time jobs for islanders. It accounts for over $500 million in economic activity each year and 6.3% of GDP, which is the highest percentage for any Canadian province.
One of our greatest concerns is seasonal operators and their need for support. We are pleased to see that many federal and provincial business support programs have been rolled out in the last few days and weeks, but it is important that we not lose sight of the seasonal operators at this time.
Our island’s seasonal operators are currently weighing decisions related to whether they will open for the 2020 tourism season. In our latest COVID-19 impact survey from April 6, 2020, operators were asked a series of questions about how COVID-19 is impacting their businesses. In terms of the impacts, there were two really dominant statements within the survey. When we asked them about looking ahead to the next three months and what risks their businesses were facing, 75% said that closing their businesses temporarily was an option, 55% are facing employee layoffs and over 50% are unable to pay staff wages.
When we followed up with a question about what kind of financial assistance or stimulus their business operations require, over 60% favoured having government taxes, dues, and financial demands waived for the next 12 months, starting immediately. Over 54% asked for wage subsidies for employees with reduced hours and 43% talked about credit and incentives to continue or start capital expenditures.
With these concerns of operators top of mind, the following are the main areas of concern for these seasonal businesses. Currently, the wage subsidy is only offered retroactive from March 15 and available until June 6, 2020. The limited timeline of the subsidy will not be of great assistance to our seasonal operators in their planning and hiring. We would like the subsidy extended to September of 2020 to help operators plan for opening their operations and for proper staffing. If it is not extended, we feel that operators may not open, or ultimately may open but will only hire skeleton crews, resulting in a reduced experience being offered because of understaffing.
When we also consider seasonal staffing, we are aware that there are now concerns around what happens to people on EI who may not be able to get their insurable weeks this summer. We would like to see EI extended or a program offered to support them in either getting their weeks or covering what would have been their EI in the fall and winter. Having the wage subsidy would also assist in giving them a better opportunity to work their full 12 weeks.
Top of mind are loan options and availability. While loan options will benefit some tourism operators, and we welcome loan options, many operators do not want to add to their current debt load. Operators would like to see government working with lending agencies and financial institutions to encourage multi-month deferrals of 12 to 18 months. While some financial institutions are currently promoting three-month deferrals, these are of little benefit. Operators need time to achieve revenue in the 2020 and early 2021 season to be used to pay back existing loans.
In addition to hoping for longer deferrals for loans, several have expressed concern about the interest that will be accruing on top of the original principal and interest during the deferral period. Having no additional interest would be of greater assistance to the operators.
Additionally, government, working with suppliers of electricity, telephone, Internet and other services, could encourage deferred payments and rollbacks on rates for these services.
We feel the window is closing on our tourism operators' ability to make decisions about operating within the 2020 tourism season landscape. We call on the government to take these issues very seriously and to offer support that will provide seasonal tourism operators with some level of confidence moving into the ever-important summer operating season. This will provide continuity to our tourism industry’s ability to contribute significantly to the economy of Prince Edward Island if we see the government support them with these resources.
Thank you so much for this opportunity to provide some testimony on behalf of the industry. We look forward to helping Canada's hospitality industry recoup and recover post COVID-19.