Industry Committee on March 8th, 2016

[The Chair, Liberal, Dan Ruimy]

Good afternoon, everyone.

Thank you very much.

Welcome to the fifth meeting of industry, science, and technology. I'd like to thank our guests for their patience while we went through some votes. Before we start, I believe we have a guest.

Ms. Hutchings.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you, Mr. Chair, and colleagues.

I'd like to recognize Thea Hays-Alberstat. Today is International Women's Day, as you all know. Thea is a second-year political science student at the University of Toronto, and she is following me as an MP today. I understand there are 50, 60, or 70 of you followers today.

Welcome. You're going to hear some great discussion and presentations on our fantastic country. We hope you'll learn something here today.

[The Chair, Liberal, Dan Ruimy]

As we are late, with respect to our guests here we're going to do the first hour as recorded, and then we'll break to a subcommittee and we'll tackle the subcommittee when we get to that point.

Without further ado, I'd like to introduce the Canadian Tourism Commission, with David Goldstein, president and chief executive officer of Destination Canada; Gilles Verret, vice-president, strategy and communications, Destination Canada; and Sarah Sidhu, general counsel and board secretary, Destination Canada.

[David Goldstein, President and Chief Executive Officer, Destination Canada, Canadian Tourism Commission]

Thank you, Mr. Chair, vice-chairs and members of the committee.

My name is David Goldstein and I am the President and CEO of Destination Canada. I am joined by my colleagues Ms. Sidhu and Mr. Verret to answer your questions.

We are very pleased to be here and take part in your review of the activities under Innovation, Science and Economic Development Canada. These are exciting times for the industry and for Destination Canada.

Today we'd like to provide you some background on our organization to give you a taste of two of our key upcoming initiatives.

As you are aware, our authority flows from the Canadian Tourism Commission Act of 2000, and our raison d'être is twofold. The first is to work with the industry, provinces, and Canadian destinations to create campaigns that stimulate demand and inspire international business and leisure travellers to choose Canada. The second is to provide business-to-business connections between Canadian entrepreneurs and international buyers in a very competitive global environment.

Based in Vancouver and operating in 12 global markets, we build on our parliamentary A-base of $58 million a year, with an additional $30 million over the next three years to relaunch our U.S. leisure market program. In turn, we stimulate a one-to-one co-investment from our partners for every federal dollar. To that end, we support Canada's $88-billion tourism sector, which generates over $17 billion in annual foreign exchange receipts for the Canadian economy.

We strive to be at the cutting edge of digital marketing and work to inspire a Team Canada collaborative approach, including our recent memorandum of understanding with the Aboriginal Tourism Association of Canada to help them bring their Canadian aboriginal tourism product to the international stage.

This collaboration with our department, ISED, runs across the federal family, including but not limited to Parks Canada, Immigration, Global Affairs, and the regional development agencies.

Tourism is Canada's number one services export sector. It stimulates economic diversification and creates businesses and jobs in every region of the country. It may be of interest to members of the committee that one in 11 jobs in this country depends on tourism, while the industry itself directly generates 650,000 jobs and is the largest employer of Canadians under 35.

The good news is that Canada is back. In 2015, for the first time in a decade, Canada surpassed the UNWTO global average for visitation growth. In 2015, global growth was up 4.5%, while Canada was up 7.5%, almost double the international average.

Ladies and gentlemen, our projections for 2016 and beyond continue to be strong. We will achieve these through our global programs, two of which we'd like to highlight for you today.

Next month, we will be launching Connecting America, our cutting-edge digital media campaign for the U.S. I was pleased to report at the recent federal-provincial-territorial tourism conference that we have full engagement from all 13 provinces and territories, demonstrating the power of a Team Canada approach to the U.S. market. Just to be clear, Connecting America is not a short-term opportunistic play to capitalize on the exchange rate. Our strategy is designed to better integrate our marketing efforts to deliver a deeper and longer lasting impact in our largest tourism market.

We have prepared the following video that helps illustrate a bit of the framework for the campaign we'll be launching in April.

[Video presentation]

Normally at Destination Canada we don't run domestic campaigns, but Canada's 150th anniversary provides us with a unique opportunity to inspire millennials—Canadians from 18 to 34—to connect with and explore their country. This is a demographic that we know loves to travel but is eight times more likely to travel abroad than to travel within Canada.

To inspire millennials to discover what their own country has to offer, we are launching this 12-month high-energy campaign in conjunction with Bell Media and their highly valued media services like MuchMusic and MusiquePlus.

The next video will help you get a sense of that excitement.

[Video presentation]

In conclusion, Mr. Chair, Vice-Chairs, and members of the committee, it's interesting that in July 2015, the Reputation Institute, an important international organization, named Canada the top destination in their Global RepTrak survey. Canada often consistently ranks first or second when it comes to its reputation around the world as a tourism destination, but stubbornly we are 17th when it comes to international arrivals. We believe this gap can be closed.

The Canada brand has never been stronger and together we are working to ensure that our world-class reputation is converted into a steady increase in arrivals and therefore business and economic gains for the country.

On behalf of my colleagues, I want to thank you for this opportunity to present. I look forward to working with the committee in the future on any of its potential studies. We are pleased to answer your questions today.

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you very much. That was well done.

I know when I see those commercials on TV, I am going to get very excited, so I'm happy to see what you've shown us today.

We're going to start our questioning with Mr. Jowhari.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Being International Women's Day, first of all let me acknowledge Sarah, followed by David and Gilles. Thank you very much for coming and sharing your vision of what you are planning to do for Canada and for us.

Let me start by saying that I had the opportunity to review the special examination opinion that was prepared, and I also got directed from there to the 2015-19 “Marketing in Canada in an Ever-Changing World”. I was hoping that 68-page document would be made available to us because I found it very interesting. I found it very comprehensive, and it addressed a lot of questions I wanted to ask.

Having said that, I have three questions to ask of the panel.

Question one is, since that report was put together in mid-2015, with the new mandate that the government, especially the Minister of Tourism, has given and has published, is there anything in that report that's going to change: any of the priorities, strategic directions, your initiatives, objectives, and key performance measures?

Question two has to do with the amount of appropriation, which I believe to be $70.5 million. It's been broken down by about $60.7 million for marketing and sales, $2.2 million for tourism research, and about $1 million for experimental product development. What activities will your organization be carrying on under these three programs, and are there any changes to these three programs?

[David Goldstein]

Thank you for your questions. They are quite detailed. I will provide you with a cursory answer, but some of these deserve a more fulsome, detailed, written reply that we would be happy to furnish to the clerk to be distributed to the rest of the committee.

I wouldn't say our priorities have changed, but they have highlighted certain areas that are opportunities for us in a changing marketplace. For example, we were already on a course to find new ways to look at digital marketing in this age. We are looking at plans to get far more aggressive in that area.

You asked about KPIs and measurement. We're undergoing a re-evaluation right now. When you look at marketing campaigns, it has been a historic issue of trying to evaluate their ROI. We are looking at a whole series of issues in conjunction with Oxford Economics to look at how we're gauging the success of those campaigns.

As per the spending allotments that were within the estimates, I can go through the series of initiatives, but they include a fair amount of research. We're world-renowned for the research we do at Destination Canada.

Some of that expenditure is services we pay Statistics Canada. Some of the exploratory pieces are works we do to help build SMEs' capacity to get ready for marketplace.

We would be happy to supply a much more fulsome detailed answer to the questions to the clerk within, let's say, four business days if that's okay.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Based on the feedback I received from you, is it fair to say that the new mandate of the ministry and the new mandate of the government have not substantially changed any of the planning you have done as part of the report you published earlier this year?

[David Goldstein]

There are areas where we're probably more prominent in than we were a year ago. I would use aboriginal tourism as one of the initiatives. It's not that we weren't involved in aboriginal tourism. In fact, last year was the first time we did a full aboriginal tourism pavilion as part of our Rendez-vous Canada big trade show event. Obviously, this is an area where we see tremendous acceleration and feel the direction of the mandate letter gives us support to continue to do that. There are areas like that.

There's another issue. I wouldn't say it's a function of the new government or our transition, because we've gone through a transition as well, but we're working to be far more reflective of the country as a whole.

It's fair that this organization, without being unfair to my predecessors, had been a leader or expressed themselves as a leader and not as collaborative an organization as it once was. Where you find that very tangibly is in the partnership levels. Over a year ago the organization had a partnership ratio of 0.6:1, so that meant 60¢ of partnering dollars for every dollar that the federal government committed. This year we're going to be reporting a 1:1 ratio. Our level of collaboration is much higher, especially with our provincial counterparts, our local city destinations, and the industry itself.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Can I ask if there is any amendment to the emerging market in Canada report that you are going to publish because of the change of the mandate or realignment with the mandate? Can you please make it available to us?

[David Goldstein]

We submit a corporate plan to Treasury Board on an annual basis, and the précis of that is published, so once that has gone through the process, it will be published. What you have before you today is last year's annual report.

Our next annual report goes to our board next week, I believe, and will be brought to the minister before the end of March. She will then table it in the House of Commons. That will be made available at the earliest convenience at some point in the spring.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Richards.

[Blake Richards, Conservative, Banff—Airdrie, AB]

I'm going to share my time with Mr. Bernier. Could you give me an indication when I have about two minutes remaining because I want to make sure I give him a couple of minutes.

I want to welcome my friends from Destination Canada. It's always good to see you and I have just a couple of questions for you today.

I was glad to hear, in your response to the last question, your discussion about the increase in terms of your ratio of partnership funding to 1:1 this year. Congratulations on that. That's something I know you were working very hard to accomplish and we're glad to see that. You mentioned that was in large part due to better collaboration with both provincial associations and local DMOs and others.

I wonder if you could just elaborate briefly on that for me in terms of some of the things you've done. And if you could, include in that the context of the connecting America funding that was in last year's budget under our government to increase funding for U.S. marketing at this very key time, I think, with the opportunities that exist there. We're obviously seeing great results from that, but I wonder if you could include in that context what you've been doing to try to better partner with some of the provincial and local associations.

[David Goldstein]

First of all, the increase to the 1:1 ratio was before the connecting America investment began, so that's dollar for dollar against last year. At the risk of sounding immodest, we're quite proud of the gains taking place there. It really goes to a very different collaborative approach.

Having come from the industry myself, there have been frustrations in the past that the organization was very focused on the Canada brand and a sort of elitist version of the Canada brand. We're taking a different approach that while the Canada brand is important there are a whole bunch of brands that make up Canada. Sometimes it's the Canada brand's job to lead and sometimes it's our job to lead from behind and to put in the window the most attractive offerings no matter where they are in the country.

That and an effort to become more commercially relevant to the industry I think are what we can attribute the increase in partnership levels to, or what we like to say are co-investment levels. We're expecting that to be even higher with the connecting America program.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Excellent, and that's great to hear.

If I'm putting you in a difficult spot, let me know. I mentioned connecting America, and obviously the opportunities that exist there with the dollar, and a number of other factors, including the connecting America marketing money and the job you're doing to market Canada to the U.S. I wonder what we can do to build upon that.

I know the Frontier Duty Free Association had the road trip proposal, for example, where they were looking at a rebate for those who are doing cross-border shopping when they're visiting from the U.S. That's one example of an idea that we can use to build upon some of the success we've seen through connecting America.

I wonder if you have any thoughts on what more could be done to build upon that success.

[David Goldstein]

With all due respect, Mr. Richards, I think you're confusing my previous role. I think that's a tax policy issue that would not be part of my purview right now.

[Blake Richards, Conservative, Banff—Airdrie, AB]

I understand that's the case, but you obviously do have some experience in the industry. Where possible, could you comment?

[David Goldstein]

In this process of becoming more commercially relevant, we are getting a better understanding of what each part of the sector would look to see as their commercial benefit out of the program. What would the accommodation sector see as a win, or what would the aviation sector see as a win? It breaks down into a bunch of subsectors including golf, and skiing, and I'm sure, the duty-free business as well.

By building those programs that are more commercially relevant, you're going to lever up the co-investment dollars. That's where we think we're going to see the maximum impact of the campaign.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Okay, great.

I'm going to turn it over to Mr. Bernier now.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you, Mr. Richards.

Mr. Goldstein, I would first like to congratulate you for managing the restructuring of the Canadian Tourism Commission, which is now called Destination Canada. You had to hold consultations with the industry across the country, not just with officials in Ottawa, to identify its interests. You have been doing so very well.

To me, the tourism industry is an export industry. This is especially true now that the value of the Canadian dollar is very low. You will be able to benefit greatly from this. It is a nice way of attracting tourists here, although it is unfortunate for Canadians who are less able to travel abroad. However, perhaps they will travel a little more within the country.

Let me congratulate you for the work that you have accomplished during the restructuring.

I would also like to take the opportunity to tell my colleagues that we have a motion to debate regarding the appearance of the Bombardier representatives. We want to ask them about the billions of dollars that they will be receiving and about the company's financial situation.

It is important for all the members of the committee and all the MPs to know why Bombardier needs $1.2 billion to be competitive and what type of assistance the company has requested from the Canadian government. I constantly hear the concerns of my constituents in Quebec about this issue. The workers and entrepreneurs of Beauce who pay their taxes hardly appreciate their taxes going to companies managed by millionaires. It is important that the committee look into this matter.

To wrap up, I would like us to discuss my motion, which reads as follows:

That the Standing Committee on Industry, Science and Economic Development of the House of Commons convenes the company Bombardier Inc. to enlighten the committee on its financial position and explains the reasons that led it to request a financial assistance to the Government of Canada.

I think it would be very important to have this debate as soon as possible, because as you know, the government wants to go ahead with $1 billion in grants to a corporation. We call that corporate welfare. I think it is important to be able to have this debate as soon as possible.

[The Chair, Liberal, Dan Ruimy]

Well, your time's up, and this is a subject that we will take to the subcommittee— as we have discussed in the past—at which you are invited to spend the five minutes. Today we are talking with Destination Canada. We have already spoken to this motion, and we will speak to it in our subcommittee meeting.

[Maxime Bernier, Conservative, Beauce, QC]

As you know, I'm not a member of the subcommittee.

[The Chair, Liberal, Dan Ruimy]

We've extended an invitation for you to speak to the subcommittee meeting.

Thank you.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Mr. Chair, on a point of order, I believe that a member is allowed to move a motion while they have the floor, and that motion is now on the floor accordingly.

I apologize to members of the Destination Canada group. I apologize also for being late; I was stuck in the House. There are very pressing issues that need to be dealt with. There are very important items that I believe are also being debated in the House today and that are the responsibility of this committee to undertake.

It's my belief, and I know it's Monsieur Bernier's belief, that as we go forward, it's something we should be working through around this table. It's something we should be taking on to provide good, strong advice to the government of the day, no matter what the party affiliation of the government. And I believe you will see that members of our committee are excited and want to be part of the solution when it comes to Bombardier.

Also, through—

[Lloyd Longfield, Liberal, Guelph, ON]

On a point of order, is this counting against their time?