Evidence of meeting #8 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was countries.
A recording is available from Parliament.
Paule Brunelle Bloc Trois-Rivières, QC
Before what my party called the sponsorship scandal, the sponsorship program had contributed greatly to festival funding. Subsequently, that was cut off completely. Contributions to festivals have started again, but, at $30 million annually over two years, the amounts are too small.
Do you think that the lack of involvement on the part of the federal government is a loss for your industry? Do your people talk to you about it?
President and Chief Executive Officer, Tourism Industry Association of Canada
Most definitely, yes, is the answer to that question. It would be a big help to our industry to have some of those funds that were taken out of the system, that were accessible to industry for hosting events, put back into place.
Obviously, we have the same agenda as the government to make sure these funds are passed on in an accountable way and that they're actually doing what they're intended to be doing. We would definitely support the increase of funds available for major events that are going to actually drive visitation--maybe not for events that are of a local-attraction nature, but certainly ones that would drive visitation to a destination. Obviously, local residents will attend most events that are happening, whether it's the Calgary Stampede or winter carnival in Quebec City, but if we can attract 30% or 40% of delegates attending events from outside the community, then that's definitely going to help the tourism industry and help to animate our country.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Personally, I think that when government supports festivals financially, it gets a lot of economic return, including taxes, and the income tax paid by people who work at them. This is an investment for government, because it gets back what it puts in, and more.
Do you agree with me?
President and Chief Executive Officer, Tourism Industry Association of Canada
For sure. Out of every dollar that's spent on tourism, 30 cents goes into tax revenues. The biggest winner of that revenue is the federal government. The second-biggest winner is the provincial government. The municipal revenues are also elevated. That's 30 cents on every dollar.
In a study we did with Grant Thornton we've shown that an increase of $100 million in the advertising budget for the Canadian Tourism Commission, which would put us on equal footing with Australia, would actually generate to the federal government more than the $100 million they put in, because the $100 million would be leveraged with the private sector. It would boost that budget up to, or close to, $200 million. That would generate revenues of...I believe it's $216 million more in federal revenue only. On top of that, there would be provincial and municipal tax revenues.
Tourism is an investment, and the federal government is a beneficiary. You hold much of the tourism product in Canada. The war museum or the park system are assets that are held by Canadians. It's important that Canadians know that when you're promoting our country you're making those facilities more sustainable.
You're making an investment, not only in the business private sector, but also in the public sector facilities you already operate.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
I would like to talk briefly about business travel. This is a powerful driver when you have a unique product to offer. In Montreal, the city's French character and the quality of its restaurants attract a lot of people.
Is business travel dropping? I had the impression that, a few years ago, it was.
President and Chief Executive Officer, Tourism Industry Association of Canada
Actually, the business travel is holding its own. Because of the strength of the Canadian economy, business travel is strong in Canada. We are worried about the convention sector over the next three to four years because of the appreciation of the Canadian dollar. When we're competing against other countries in the world for foreign conventions, particularly the U.S., how we price Canada for foreign conventions..... Before we had the benefit of 20% and 30% discounts on the Canadian product; today we won't be able to price our convention centres and hotel rooms that way to an American audience, or to other foreign countries. As I mentioned, other foreign currencies are elevated.
Conventions, which represent a good part of business travel, will certainly be a challenge over the next three or four years. Montreal has had some challenges in that area.
Business travel for Canadians travelling in Canada has been holding its own, and it has been strong. We are worried about business travel from the U.S., because of the state of their economy.
Conservative
Bruce Stanton Conservative Simcoe North, ON
Thank you, Mr. Chair.
First of all I'd like to say what an honour it is to have the witnesses in front of us. For a person who has spent a lifetime in your industry, this is indeed a privilege to have you here today and to hear about this tremendous industry in our country.
I have numerous questions. I hope we'll be able to get through many of these.
This study we're embarking on involving the service sector, which we've had a couple of meetings on, is for us, as parliamentarians, to better understand how the service economy supports the strength of Canada's economy generally.
I wonder if you could briefly comment, Randy, on the degree to which the tourism sector actually generates wealth in the various communities. As a point of background, there has been a discussion about what primary industry is in Canada and what it is not. What we've found so far is that there's a fair degree of integration. I wonder if you could comment at the macro level as to how tourism is in fact a primary industry in our country.
President and Chief Executive Officer, Tourism Industry Association of Canada
One of the greatest benefits of tourism is our diversity. One of our biggest disadvantages is our diversity as well. People misunderstand our industry because they can't touch it like a factory or a storefront.
We see ourselves as eight different industries within our sector. Internationally right now it's at five different industries within the tourism sector. We see, obviously, all transportation as a tourism industry, and that's recognized globally. Accommodations are one of the industries within the tourism sector. Then we have items like festivals and events; fixed attractions; food and beverage; travel trade, which are tour operators and travel agencies; and there's travel media; and so on and so forth. There are a number of different sectors that the members here may not realize are actually the tourism industry.
We will talk to some people who are actually working in the transportation industry who don't see themselves as being in the tourism industry. When you speak to them they recognize that, yes, they are in the tourism industry, but they see themselves as either in the airline or the rail industry, for example. Our diversity is our strength, but it also makes it difficult to understand our industry and our scope.
But we are in every community in Canada. Because we are a service industry we employ a lot of Canadians. We offer positions that allow jobs any hour of the day, at entry level, or highly skilled. In fact, a lot of the technology growth was attributable to our industry. If you look at reservation systems in hotels and what the airline industry has done for technology, it has driven a lot of technology. The tourism components of the industries I've talked about have driven a lot of the technological advances we've had and enjoy today. Our industry is misunderstood. It's a big contributor.
In some communities in Canada, like P.E.I., the Yukon, and British Columbia, it's ranked in the top three. In British Columbia it's the third-biggest industry, and they want to make it the second-biggest industry in their province. In P.E.I. it's the number one industry. In the Yukon it's the number one industry. At the provincial and municipal level governments recognize it, but when we reach the national level, because you have so many other interests, you seem to forget the importance that tourism has at the grassroots of Canada.
Conservative
Bruce Stanton Conservative Simcoe North, ON
Back to the workers for a second. One of the other characterizations and perceptions that I think quite honestly does exist is that it is an industry that is part of the service sector in Canada and is relegated to rather low-paying jobs, entry-level jobs, and certainly there are those. At the same time, there's this overlay of facing the prospect of a skills shortage. Never mind facing them, they're currently existing and probably going to get worse. As you look ahead, how is the tourism industry addressing that challenge in terms of skills shortages, and what does that offer in terms of the future for the kinds of wage levels that we'll see in this industry?
President and Chief Executive Officer, Tourism Industry Association of Canada
I'm going to turn this over to Chris, but I'm going to give you an anecdote.
We were hiring somebody the other day who had been working a couple of jobs for the last couple of years. They were working in human resources at a department store as a human resources manager and also working at a restaurant. I won't name the department store or the restaurant. They applied for a job with us because they wanted one job instead of two. This person gave up the job as manager at the department store in human resources to become a full-time server at the restaurant because it paid more, and they were looking for one job.
Sometimes what we forget in our industry is that certainly there are some examples of pay levels that are lower than the average in Canada, but there are tipping and gratuity positions. Also, we're not at the low end. We certainly have a lot of positions at the higher end in our industry.
Go ahead, Chris.
Christopher Jones Vice-President, Public Affairs, Tourism Industry Association of Canada
Mr. Stanton, you raised a very relevant point. I think there's an erroneous stereotype out there that we need to correct. Where there has been growth in the tourism industry in recent years, it has been in areas that are quite sophisticated and high-end, such as boutique hotels, specialty cuisine and wineries, spas and wellness centres, golf facilities, and backcountry hiking and skiing, often accessible by helicopters. These are the kinds of vocations and jobs that are growing in our industry. It's consistent with the new patterns of travel wherein people are looking for niche activities and experiences. So I think the perception that people are just slinging beer is an old one that's no longer valid.
As to your second question about what can be done, first of all, we want to acknowledge and credit what the government did recently to extend the period during which foreign workers can stay in the country without having to re-apply for their status. It's now two years, and that was a great initiative. Also, I think some of these expedited labour market opinion pilot projects that are going on are very helpful.
So I think the government has been responsible in that area. We just encourage you to continue to work on that.
Conservative
The Chair Conservative James Rajotte
Great. Thank you, Mr. Stanton.
Before I go to Ms. Nash to finish the first round, I want to welcome Mr. Pollard, and after we finish the first round with Ms. Nash, we will allow Mr. Pollard to give his ten-minute opening statement.
Go ahead, Ms. Nash.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Thank you, Mr. Chair.
Welcome. Good morning to all of you.
I'm an MP from Toronto, and tourism is huge in our city. It's something that is essential to the economic well-being of Toronto, as Canada's largest city, but obviously to our country as a whole.
I notice in our briefing notes that about three-quarters of tourism business--and I assume that's based on dollar amounts--is based on internal tourism, tourism by Canadians within Canada, and then about 25% is from abroad. I also notice that in your comments, Mr. Williams, you said that last year we had the lowest level of travel from the U.S. since we began collecting these statistics. You talked about that in the context of the rising dollar. But I'm wondering how much the dollar is a factor, because you also spoke about infrastructure, border crossings, fuel costs, and that kind of thing. How much of that do you attribute to the high dollar?
President and Chief Executive Officer, Tourism Industry Association of Canada
It's hard to pin down exactly how much of the depreciation of the U.S. market is attributable to the dollar. I do want to say, though, that the U.S. market started to depreciate in visitations after 2002, and the appreciation of the Canadian dollar didn't start until about three years ago. So the U.S. market started its downward trend well before, about two years before, the appreciation of the Canadian dollar.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Was the spike in 2002 a result of security concerns of American travellers who preferred, perhaps, to stay closer to home rather than travel abroad?
President and Chief Executive Officer, Tourism Industry Association of Canada
Canada was good value at that time, plus Americans who did travel stayed closer to home, and Canadians visited Canada more. So a little bit of it was Americans staying and visiting Canada instead of going abroad. That was most of it. But we exist right now in a bit of a perfect storm because of the Canadian dollar, the confusion over border documentation because of WHTI, the passport issue, the congestion at the border, and also fears that there are going to be--and there are on busy weekends--four and five-hour waits, and so on.
So there are a number of factors.
NDP
Peggy Nash NDP Parkdale—High Park, ON
I can just say, too, as someone who travels back and forth by air between Ottawa and Toronto, that there is often a half-hour wait just to get a taxi out of the airport, and then it takes you almost an hour to get downtown. So the lack, as you mentioned earlier, of high-speed infrastructure.... Rail, primarily, would make the most sense to get to downtown Toronto. We have that beautiful big new airport in Toronto, and it feels like you're travelling by donkey cart getting into the city.
President and Chief Executive Officer, Tourism Industry Association of Canada
Yes, in Ottawa, Montreal, or Toronto it's frustrating to get off the plane after what might be a half-hour or one-hour flight and wait half an hour for a taxi. I think our three major cities in the triangle are going to have to address that problem. Obviously Vancouver's monorail system from the airport to downtown is really going to help that community. We've been talking for a long time about Pearson International Airport having direct rail service to downtown; it's an idea that's already past its time and should be in place.
It's the same with Ottawa and Montreal. I'm sure the members have experienced it. Pretty soon we're going to be longer waiting for a taxi than we are in the flight itself.
NDP
Peggy Nash NDP Parkdale—High Park, ON
It seems to me that's something the federal government can certainly assist with, airports being federal, and it's necessary infrastructure that would help the tourism industry and the major cities as a whole.
Over the last year the federal government cut funding from foreign affairs for touring programs for the arts internationally. This to me seemed very counterproductive, because to me it's like advertising for some of the best that we have to offer culturally here in Canada.
In the remaining time I'd like to hear from you about the importance of the arts in terms of attracting foreign visitors to Canada, whether it's related to this program or others. Obviously some of the older cities of the world are important art centres, but I think we often undervalue the importance of the cultural sector right here at home.
President and Chief Executive Officer, Tourism Industry Association of Canada
Yes, we do undervalue it.
I haven't heard of that change being an issue for our industry, to be direct to your comments. It hasn't been raised, to my knowledge, by any of our membership as an issue for us. I don't know if Tony has heard about it or not.
Obviously any time the Canadian brand can be celebrated outside our borders is a time that is good for us and puts Canada on somebody else's mindset.
Vice-President, Public Affairs, Tourism Industry Association of Canada
Very quickly, I think that the importance of cultural tourism has been reflected in Ontario recently. Renovations to the ROM, the art gallery of Ontario, and construction of the new Four Seasons Centre for the Performing Arts are going to drive visitation to Toronto again. After a long period when perhaps there wasn't investment in those iconic artistic centres, they're now beginning to do that again, and it should be beneficial.