Thanks, Mr. Chairman. Good afternoon, honourable members.
We're pleased to have the opportunity to meet with the industry committee in support of a study on the economic performance of the service sector in Canada, with a focus on tourism.
First let me say that the Canadian Tourism Commission acknowledges the importance for Canada and our tourism industry of Canada's agreement with China on approved destination status. Until this important development, CTC has not been able to market directly to consumers. We have been preparing for ADS by establishing an entry-level team in China, leveraging tourism opportunities for Canada, and creating key relationships on the ground that will be strategic going forward.
With this announcement, CTC will now propose and seek to implement a robust action plan to leverage the growing interest in travel to Canada in China.
Mr. Chair, a 2008 Conference Board of Canada study, commissioned by the CTC, examined the vibrancy and competitiveness of the Canadian tourism industry. It showed that tourism, as an industry, outperformed all other traditional industries and outperformed the economy at large.
Tourism represents approximately 2% of the Canadian gross domestic product. At a value of $30.3 billion in 2008, it was equal to the approximate economic value of the agriculture, fishing, forestry, and hunting sectors combined. In that year, this industry generated $21.9 billion in government revenues, including $9.85 billion for the federal government, and it employed 663,000 Canadians.
That said, 2009 has been a difficult year for tourism. The economic uncertainty that began in the summer of 2008 resulted in fewer people travelling in 2009. This continues to impact consumer confidence and the net worth of travellers, especially in the United States.
While the current volatility of the global markets has resulted in cutbacks in various organizations throughout Canada's tourism marketing industry, the importance of continuing to market Canada's tourism brand to protect market share cannot be overstated. Tourism is often affected in the short term by economic declines, but the long-term outlook for global tourism remains strong. Tourism is traditionally a resilient industry that recovers quickly from economic downturns.
The Canadian Tourism Commission is Canada's national marketing organization. We market Canada in 12 countries around the globe. The “Canada: Keep Exploring” brand has been gaining strength since we launched its new look and feel three years ago in collaboration with Canada's tourism sector.
We've successfully repositioned Canada as a destination that offers exciting and extraordinary experiences. FutureBrand, a highly respected brand evaluator, has ranked Canada second for two years in a row in the bid for best country brand. Since the launch of Canada's new tourism brand, Canada has jumped from twelfth to sixth to second place.
In addition, we've been able to demonstrate, through studies administered by third parties, that our 2008 campaigns were directly responsible for a return on investment ratio of 45:1, or $45 of direct tourism expenditure for every dollar spent by the CTC.
As this committee knows, the U.S. is Canada's largest tourism customer. In 2008, almost three out of every four international travellers who came to Canada were from the U.S. Canada's tourism industry, particularly in areas such as the Golden Horseshoe, the Rockies, the Eastern Townships, and Atlantic Canada, are largely dependent on American travellers.
However, the economic downturn, the thickening of the border, and the high value of the Canadian dollar have resulted in fewer Americans travelling, and those who do travel here are spending less. In 2008, total U.S. spending in Canada was $7.4 billion, 10.2% lower than in 2007. For the first time in history, U.S. spending was lower than other international spending.
The CTC's U.S. efforts are currently limited to areas where there is stiff competition from other countries, namely in the four core metropolitan areas: New York, Boston, San Francisco, and Los Angeles. There is also stimulus funding for activities in Chicago.
We recognize that there is significant untapped potential in other U.S. cities. The CTC does not currently have the resources to support a presence there. Our strategy, then, in the U.S., as in all markets, is to focus on converting long-haul, high-yield consumers, who tend to stay longer and spend more money in Canada. In the face of serious economic downturns or currency fluctuations, a diversified strategy for CTC is both prudent and opportune.
In terms of overnight arrivals, Canada's source markets exhibiting the greatest growth for 2008 over the previous year were the emerging markets of Brazil, India, China, and Mexico. Federal stimulus funding delivered to CTC in 2009 and 2010 has been invested in developing a competitive position and promoting Canada in these key emerging markets.
At the same time as we are attracting international visitors to Canada, we're also working to convince Canadians to travel within Canada instead of going to foreign destinations. Canadian outbound travel spending continued to rise, in light of a strong Canadian dollar, to reach a record level of $26.9 billion in 2008, an increase of 15.5% over 2007. As a result, Canada's international travel deficit, the difference between what Canadians spend abroad and what international travellers spend in Canada, rose to a record $12.6 billion.
Budget 2009 entrusted the CTC with funds for a national advertising campaign at home. We launched the LOCALSKNOW summer campaign in June and the winter campaign in November, inspiring Canadians to stay at home and discover the Canada they don't know. So far, the campaign results indicate that about 200,000 trips that would otherwise have been taken to foreign destinations have been diverted to Canada.
The economic conditions of the last year have unquestionably hurt our industry. However, we have an ace up our sleeve. The opportunity of the 2010 winter games for the Canadian tourism sector is immense. Three billion viewers will be watching the games and wanting to get to know us better.
In partnership with VANOC and with our tourism consortium partners, we have launched a media program that will maximize international coverage of Canada and spread the excitement around the world.
Close to 600 travel stories and ideas are available to international media.
We have also been having great success with our international torch bearers program, most recently with César Cielo, a gold medallist from Brazil who ran at Hopewell Rocks, New Brunswick. We have Ashok Kumar, a Bollywood star from India, running in Toronto. Yang Yang, a short-track speed skater from China, ran in Prince Edward Island. We have Anna Maria Kaufmann, a German Canadian opera singer from Germany, who will be running in Alberta. These are runners who have been able to bring the attention of Canada's excitement around the games back to their home countries and spread our story.
There are 3,200 still images available to further enhance Canada's tourism personality; and 25 broadcast-ready high-end features are in the works all across Canada, with seven of these features already being used by rights-holding broadcasters.
International media have never before had this volume and variety of high-quality product available to them and delivered to them so early by a host country.
Mr. Chairman, there is no status quo or business as usual for the tourism industry in Canada, but there is immense opportunity.