Industry Committee on March 8th, 2016

[David Goldstein]

Obviously, this is the backbone of the sector. I would say—and I'm not sure if this is politically correct—that where it would merit a federal investment of public dollars would not be to support big multinational companies that do business in Canada. It would be to support the small and medium-sized parts of the sector that would have a very difficult time in and of themselves getting to export markets. We spend a lot of time talking about our advertising campaigns, but really the heart of our business, which is of special importance to me, is the trade show activity, or the trade commissioner function that we provide to help small and medium-sized businesses find those export markets.

We not only do a big show here called Rendez-vous Canada, which moves around the country to different destinations, but we do a dozen or so international trade shows. Some of them are our own; some of them are other international groups that we work with.

I just came back from a three-day show in Australia where there were very small providers, many of them from Alberta, who would not be able to get to that Australian customer, those travel agencies, those tour companies, on their own without the bridge that we help provide. Probably my favourite part of my job, quite frankly, is to spend time with those businesses and market.

We would invite the committee to, first of all, come to see Rendez-vous Canada in Montreal in April, and where warranted, to come and see some of the work we're doing internationally, because that's the real platform and the real help that we provide. We're talking about thousands of small businesses across the country that participate in these programs, so that's of particular importance to us.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

In your promotion, you have 11 countries that you go to, and that's where you have been emphasizing the importance of Canada. Have you determined that those are the best countries? Have you looked at it and asked if we are getting the kind of response that we could, or who's out there looking at some of the other areas? There are a couple in South America, but there are a number of others that are growing. Are we looking at it from a point of where are we getting the best bang for our buck?

[David Goldstein]

Absolutely, and this is again an area of pride for us. We've been considered one of the best-practice leaders in the world in this area. On an annual basis, we have a modelling exercise that is done in conjunction with Oxford Economics. It helped us build this economic model that goes through and triages countries based on a whole series of criteria including what's going on economically and what's going on with consumer spending. It uses IMF and various economic indicators to look at those markets, at where the spend is, and then, finally, where our impact could be because there are some markets, and I'll use perhaps the Netherlands as a good example, that always have a fairly healthy bilateral visitation between our two countries, and a campaign from Destination Canada may not actually move the needle. We go through that annually. That goes to our board and our shareholders for ratification, and that's how we go through our planning process.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're now going to move to Mr. Baylis.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I read the “Canadian Tourism Commission—Special Examination Report—2015”. It spoke very highly of your department. I wanted first of all to say congratulations. It sounds like you run a very tight ship.

[David Goldstein]

My predecessor can take most of the credit for that.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Let him or her know what I think.

One of the things that I read here is that in 2011 your board changed from a representative-based model to a skills-based model. Can you speak a bit about what that means? Was that a positive or a negative thing in your view?

[David Goldstein]

It was very positive.

There was a time when what was then known as the Canadian Tourism Commission was almost like the League of Nations. There were 13 deputy ministers who sat on the board. It was a board of 45 people. It became very difficult to manage politically and there were many competing interests. It was sort of a club. I don't mean to be defamatory. It was a club of the deputy ministers and a bunch of the leaders in the tourism industry. It looked a little more like an industry association than a crown corporation board. I think the governance exercise was very useful. It's led us down the path of doing important work like gap analysis to make our recommendations.

At the end of the day, the board is still appointed by the Governor in Council. It's been our experience that it is far more experience-based, for those who will actually make a contribution to our strategic deliberations as opposed to a collection of industry interests.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Having the skills at the table made a difference, and also just having a proper type of board. That's what led to some of these great reports.

[David Goldstein]

That's right.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I was also impressed with the way you collect KPIs, and so on. I noticed that over the last four years your budgets were cut significantly. I have numbers for 2014. Was there a correlation between the cuts in the budgets and the level of tourism, whether negative or positive? Did it make a difference? Were these cuts justified or not?

[David Goldstein]

That's an excellent question. Do you have any other questions?

[Voices]

Oh, Oh!

[David Goldstein]

I take the glass half-full approach. I think we're a much more efficient organization than we were four years ago, and marketing has changed a great deal in the last four or five years.

I'm not prepared to Monday morning quarterback any of the decisions that were taken by my predecessors. I think you also have to take into account that there were a lot of other special projects going on that went into that funding model including the Olympics, money for SARS relief, and economic development money that came through the last economic action plan.

I think when you take it in its totality, it looks like it was a much larger piece. The actual A-based funding has diminished a bit, but not by the same proportion. We respond to the dollars that Parliament provides us. We put forward a plan to Treasury Board to invest those dollars as best we can. Hopefully, on the other side, we do what we can to have commercially relevant campaigns that are going to increase the other partner investment to maximize that as well.

As we move towards that, I would say that we're probably spending or investing far more efficiently than we were three or four years ago.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I guess that brought up your level, combined with your partnering.

[David Goldstein]

That's right.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I agree with your idea not to use the low dollar as a panacea. I think it's smart that you have a long-term plan. Having said that, the dollar is low. Are we doing anything right now to take advantage of that opportunity?

[David Goldstein]

I'm not naive enough to say that it's not helpful, but it's not as helpful as people think. In fact, the acknowledgement of the difference in the dollar is very low in the U.S. right now. It's actually more impactful in some other countries like Australia, where they're going to make a decision between travelling to Canada or the U.S. based on the dollar issue.

I joke, but the research bears it out. If you live 45 minutes south of the Canadian border, you don't know there is a Canadian dollar.

I think that will gain traction, but I don't want us to ever put Canada on sale. I think there are selective opportunities that we can seize, maybe not as Destination Canada, but our commercial partners may wish to enhance certain opportunities because of the exchange rate. I, and our management team would never advocate, “Canada is on sale now. You should come.”

To your point, that's only a short-term issue until we figure out what happens with the dollar two or three years from now. I think we've got an exceptional product to sell, even at par. You will see that the numbers actually started to come back even before the huge discrepancy in the Canadian dollar. I think there's a value play. It is a much stronger argument for us.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Now we're back to Mr. Dreeshen. You have five minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

I will get an opportunity to ask the question I had wanted to bring up. It has to do with agricultural tourism. We have so many individuals, farm groups, and so on who talk about going down to Peru to try to find out about different things that are happening. I remember going to Europe 35 years or so ago with the same idea. I think it's something that's extremely significant. But we have so much to offer here in Canada, and we do it locally. We have different farm days in the province of Alberta. We have one where everybody goes out to find out where their local foods are and to see what sorts of things are there.

I'd like to get an idea of where your focus is, if there is a focus on agricultural tourism, and if not, if there's some way it can be looked at. As well, when you take a look at your market research, have you been able to determine what the main spending allocations have been, both for Canadians as we go throughout the country and for non-Canadians. What are they spending the most on?

[David Goldstein]

If it's okay, for the second part of the question I'd rather get back to you in a detailed response in writing.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Certainly.

[David Goldstein]

We do have some data. It's a little imperfect data on domestic spend, but we do have some data on that.

As far as agricultural tourism is concerned, I had the great gift at lunch today to eat a piece of cod that was hand-caught at Fogo Island. To us, agricultural tourism is a really fascinating area that we see enveloping culinary tourism as well. I think there's a beautiful marriage there of culinary and agricultural tourism. We're working with a couple of different culinary groups right now on just that. I agree with you, it's a tremendous opportunity in all of our markets, not just the U.S. market, but also Europeans, Asians. I think there's a great deal.

When we do our research, we see that Canada unfortunately isn't seen as very sophisticated from a culinary perspective, even though we are. It's something we're spending some time and attention on.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

I think with the CETA and the TPP, it's another aspect of it. I remember being on a trade mission to London and speaking to distributors in Europe, looking at opportunities and how we can understand what is required in order to break into their markets.

Part of it is just labelling and size, how you're going to sell it, and where you're going to sell it. Beyond that, it is how you make sure people recognize the quality you have, the excellent food safety program we have—the best in the world. I think that's a critical aspect.

You indicated that you would like to bring the numbers in on where these things are coming from, but I wonder if you could just talk about it.

[David Goldstein]

Roughly, domestic spends less. It's a bigger percentage.

Our biggest challenge is that pre-2002, Canada's split was roughly sixty-forty—60% domestic receipts, 40% international. It's now eighty-twenty.

Obviously, it's new dollars to the Canadian economy, which is critical, but they will also spend more, so they're a higher yield customer.

That's our legislated mandate, to look at export revenues, but it's also, I think, the most important piece for the Canadian economy.