Madam Chair and members of the committee, I would like to thank you for inviting me here today.
My name is Beth Potter and I am the president and CEO of the Tourism Industry Association of Canada. I will be presenting my remarks in English, but I will be happy to answer your questions in French during the question period.
Before I give my remarks, I acknowledge that we are gathered here today on the unceded and unsurrendered territory of the Anishinabe Algonquin nation.
TIAC is the national advocate for tourism in Canada. Acting on behalf of thousands of businesses across the country, our work involves promoting policies, programs and other initiatives that foster the growth of the sector.
Tourism matters. It enables socio-economic development, job creation and poverty reduction. This in turn drives prosperity and has a significant positive social impact, providing unique opportunities to women, minorities and young people. The benefits of travel and tourism spread far beyond the direct GDP impact and employment, with indirect gains extending through the entire travel ecosystem and supply chains to other sectors. I will highlight also that tourism plays an important role as head ambassador on the global stage in sharing Canada's values and principles, and is a crucial vehicle for fostering social cohesion.
As I shared with you during my last appearance, the multitude of restrictions that were put in place during the pandemic to keep Canadians safe, including border closures and lockdowns, had a devastating impact on the tourism industry. I also shared with you that as our hard work to recover from the pandemic continues, we now face new challenges, such as disruptions in supply chains, inflation at a 40-year high, rising interest rates and a severe labour shortage, to name a few.
We are still a very long way from recovering Canada's travel economy to its former glory. The latest forecast estimates that total tourism spending in Canada is now tracking to return to prepandemic levels by 2025. In fact, those estimates forecast that total spending levels from both domestic and international sources will reach $80 billion by the end of this December. That's 24% lower than our prepandemic high-water mark. Domestic spending is expected to recover much quicker than spending in the international market, but it's still down 16%, and international spending is down 53% compared with 2019.
The international market is important to consider and actively promote. This is because foreign tourists tend to travel longer when they come to Canada and tend to spend more per trip.
When I last spoke with you, we were hopeful to see a significant resurgence in tourism this summer. We know that people want to travel and we know there is considerable pent-up demand to get out there and experience all that Canada has to offer. I'm pleased to share with you that this summer season has certainly been better than the last two years, and there is hope for optimism.
We are particularly grateful for Minister Boissonnault's leadership in launching the important process of updating Canada's tourism growth strategy. This initiative is intended to result in a comprehensive action plan to help the Canadian tourism industry rebuild from the impact of the pandemic and best position it for future growth and success.
In our submission, which we tabled in early August, we outlined key priorities to help the tourism sector build forward to be the economic powerhouse that it once was. We recommended that a number of key targets be achieved by 2030. These relate to tourism spending, dispersion, workforce, international overnight visitors and our global competitive position.
Critical to the success of the new federal strategy is, as we also highlighted, the need for all tourism partners across the whole of government to work towards the same goals. In this regard, we recommended the creation of a tourism policy council of ministers, led by the Minister of Tourism, to ensure that tourism is prioritized across federal departments and that decision-making is aligned. We also identified four key pillars that would best underpin the new strategy: attract and retain a sustainable tourism workforce, improve access for visitors to and within Canada, develop and promote tourism assets, and build a regenerative and inclusive tourism industry.
We emphasize that tourism is a broad ecosystem, a complex value chain that will only ever be as strong as its weakest link. Therefore, the new strategy and the measures it entails must take this reality into consideration, must be comprehensive and must seek to bolster as much as possible each of these important links.
With a new comprehensive and effective strategy in place, we are optimistic in the tourism industry's potential to not only recover to prepandemic levels in the next few years, but return to the annual growth performance it was achieving up until 2020. This, we further contend, will only be possible if private and public sector partners continue to work together and the right tools and measures are put in place.
You might not be surprised to hear me say that we fully welcomed the government's decision early last week to remove all remaining COVID entry restrictions—the testing, quarantine and isolation requirements—for anyone entering Canada and to lift the mandatory masking requirement.
In closing, I note that we are happy the ArriveCAN app will henceforth become a voluntary tool to help streamline the customs process. I am far from convinced that it was an effective tool for controlling the entry and spread of COVID, and I know how much it caused problems for travellers and tourism businesses.
Thank you.