Question Period Note: Government Support for Tourism Recovery

What is the Government of Canada doing to support the tourism sector’s recovery?

• To help the tourism sector weather the challenges during the pandemic, the Government of Canada provided an estimated $23 billion in emergency supports for tourism businesses.

• Examples of tourism-specific supports included the $500 million Tourism Relief Fund, $400 million to support Canada’s major festivals and local events, and $100 million for Destination Canada’s marketing campaigns to promote Canadian travel destinations.

• On September 14, the Prime Minister announced extended deadlines for Canada Emergency Business Account loan repayments, providing an additional year for term loan repayment, and additional flexibilities for loan holders looking to benefit from partial loan forgiveness of up to 33 per cent.

• As the tourism sector now moves from recovery to long-term sustainable growth, the Government of Canada recently launched a new Federal Tourism Growth Strategy—Canada 365: Welcoming the World. Every Day—to realize the full potential of Canada’s visitor economy.

• Prior to the COVID-19 pandemic, Canada’s tourism sector enjoyed several years of tremendous success. Tourist arrivals grew by approximately 3.5 percent annually over the decade leading up to 2019. In that year, Canada welcomed a high of 22.1 million tourists, the third consecutive year of record-breaking arrivals. Tourism outpaced the growth of the Canadian economy in each of the five years leading up to 2019, and achieved greater overall growth over the previous 10 years.

• While the visitor economy does face significant headwinds (i.e., labour shortages, inflation, geopolitical uncertainties), the tourism sector is experiencing a strong recovery, owing to pent-up demand, the elimination of travel restrictions, and increased business-related travel.

• Tourism revenue in Canada increased 48 percent from $14.3 billion to $21.2 billion in the first quarter of 2023 compared to the first quarter of 2022. Furthermore, tourism revenue is 6 percent higher than the same period in 2019, when revenue was $20.1billion.

• The repayment deadline for CEBA loans to qualify for partial loan forgiveness could be a source of relief for tourism businesses who benefitted from the program. Small businesses and not-for-profits will automatically have access to a three-year, low-interest loan of up to $60,000 if they have not repaid or refinanced their loan. This will provide those who are unable to secure refinancing or generate enough cashflow to repay their loans by the forgiveness deadline an additional year to continue repayment at a low borrowing cost.

• The Strategy sets out the following priorities that emerged through the extensive consultations: investing in Canada’s offerings to compete in a global market; embracing recreation and the great outdoors; partnering to grow Indigenous tourism; attracting more international events; and improving coordination with a Ministerial Tourism Growth Council.

• The Strategy includes funding from Budget 2023 and 2022 for: a $108 million Tourism Growth Program to support the development of local tourism projects and events; an expansion of recreation resources and outdoor activities via a $55 million investment in the Trans Canada Trail, which will form part of a national trails tourism strategy; an Indigenous Tourism Fund of $20 million to help the Indigenous tourism industry recover from the pandemic and position itself for long-term, sustainable growth; and $50 million to assist Destination Canada’s efforts in bringing more major business conferences, conventions, tradeshows, and other events to Canadian venues.
• To improve government coordination in an acutely horizontal sector, the Ministerial Tourism Growth Council would be composed of key federal Ministers whose mandates include essential policies and programs for the sector, and will help transform the Strategy into concrete actions by elevating the visitor economy as a priority across federal departments.