Thank you, Mr. Chair.
Good afternoon, everybody. I'd like to thank the committee for the opportunity to speak to you today.
I'm joining you from Edmonton, Alberta, home of the Oilers, the Eskimos and Canada's largest living history museum, Fort Edmonton Park.
The overall tourism industry in Canada is worth $90 billion of economic activity and 1.7 million jobs. It's an enormous industry, with tentacles in every community.
My experience in the cultural tourism sector includes Ontario and Alberta, so my comments will apply to both provinces, but the challenges are generally uniform across the country.
Cultural tourism organizations such as museums have been fighting a steady decline in visitation over the years. Declining interest, the state of the economy and reduced government funding for cultural institutions have all of us on the edge of sustainability. Tourism attractions are under a strain as well, due to declining discretionary spending, and because the market can only absorb so many tourism offerings where the industry has filled the void from lost industrial and manufacturing activity.
I tell you this just to illustrate how fragile this sector was before this public health crisis. Some organizations, including the Fort Edmonton Management Company, started to focus on expanding their product mix to a more market-aligned portfolio. Why is this? Well, it supports the sustainability of the core product, and it helps preserve the social value that these organizations were created for.
Now, with this health crisis, tourism and cultural organizations find themselves in dire circumstances, because the very nature of tourism relies on visitation and volume. The disruption of travel has impeded our industry as well, and this issue will affect us well beyond the pandemic, because consumer behaviours are likely to linger.
Think about this for a moment. Cultural tourism is one of the only industries where there is no shipping cost or supply chain for your product. Rather, your customers come to you to get it. This was once a strong tailwind for our industry, and it has now become a crippling headwind.
Further, when people travel to our locations, they create an economic impact and multiplier that generates demands for many other businesses. This entire model is now drowning, and it needs to be reimagined so that maximum social and commercial values can be realized.
I remember SARS. Toronto was just a few hours away from our home in Kingston, Ontario. SARS devastated the tourism industry in Toronto, but something remarkable came of it. Prior to SARS, the idea that you would see competitors in hospitality, tourism, theatre, music and culture, etc., collaborating to attract people to their city was not well rooted in the industry. After SARS, the constraints in capacity utilization among these sectors demanded collaboration, and ultimately this collaboration and innovation became the epitome of what we now call destination tourism.
We learned from that, and we need the same approach today—a harmonious response and a clear focus on what's next, not when we can get back to normal.
How does the government's response support this? Wage subsidies and student emergency funding are important and help provide some interim relief, but that doesn't fully address the structural problem here.
Yes, of course, we need to take care of people. We need to support students so they can return to university or college and industry workers so they can support their families, but we should reserve some of this allocated funding to incentivize innovation, growth with new products and infrastructure that supports it, and productivity improvements.
We need to be holistic about what the government provides incentives for with these funds. Subsidies, grants and loans that provide a return to my typical business practice will not force innovation in this evolving market. We need more ROI-driven and market-driven initiatives incentivized.
I'm not sure how that looks, but it needs to drive innovation and growth. Constraints in business drive innovation. When constraints are removed, you go back to yesterday, so I would ask the government to be careful to not fully remove all of these boundaries. As with SARS in 2003 or the collapse of the automotive industry in 2008, business models changed out of necessity because they were constrained.
My question for my friends and colleagues is this: How do we look at this as a generational shift—for a segment of funding anyway—in how we support this industry? What does next-generation destination tourism look like?
We need to redefine our product and service offerings to address the new social and economic environment, because I fully expect these new consumer behaviours and expectations to remain well after the pandemic. We need to take care of employees, we need to take care of our guests and we need to take care of our bottom line. If any of these three legs fail, sustainability is simply dissolved. In short, we have to innovate.
The existing government programs to respond to this crisis in our sector are a great start. They will help position organizations to hit the ground running when we emerge from this crisis. But if I'm being completely honest, I'm less worried about when we'll hit the ground running than I am about how we'll hit the ground running. It's possible that we won't be running at all.
I very much appreciate the opportunity to speak with you today. I definitely acknowledge the immense challenge of supporting this very diverse industry. I thank you for that.