RVC 2012: Resettting the agenda

Resetting the Agenda

Spring, 2012

Progress and Challenges: The Federal Tourism Strategy

• Whole-of-government approach to grow the tourism

industry in Canada

• Addresses policies touching on marketing , access and

product

• Many accomplishments since the launch in Oct. 2011:

Air access agreement with Brazil

10 year multi-entry visas

FTS Roundtable meetings in Ottawa

Parks Canada support for Glacier Discovery Walk in Jasper

Reasonable admissibility policy

Commitment to expand global network of VACs to 150 by 2014

Administrative improvements on FCTIP

Temporary Foreign Workers program

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Challenges: Trade Balances in Canada

-20,000,000,000

-10,000,000,000

0

10,000,000,000

20,000,000,000

30,000,000,000

40,000,000,000

50,000,000,000

60,000,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Can

ad

ian

Do

lla

rs

Crop Production

Animal Production

Forestry and Logging

Oil and Gas Extraction

Pulp, Paper and Paperboard Mills

Chemical Manufacturing

Machinery manufactoring

Tourism

Challenges – International Arrivals

• Between 2002 and 2011, almost all

countries posted gains in international

arrivals — except Canada

• Canada has fallen behind in a growing

international travel market:

• Fewer American visitors — our

traditional go-to market

• New middle-class from emerging

economies (Brazil, Russia India,

China, Mexico) eagerly spending

their travel dollars elsewhere

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International Tourist Arrivals

(Top 20 Countries – in millions)

Rank 2002 2011

1 France 77.0 France 77.1

2 Spain 52.3 U.S. 62.3

3 U.S. 43.6 China 57.6

4 Italy 39.8 Spain 56.7

5 China 36.8 Italy 46.1

6 U.K. 24.2 Turkey 29.3

7 Canada 20.1 U.K. 28.3

8 Mexico 19.7 Germany 28.4

9 Austria 18.6 Malaysia 24.7

10 Germany 18.0 Austria 23.0

11 Hong Kong 16.6 Russian Fed. 22.7

12 Hungary 15.9 Mexico 22.7

13 Greece 14.2 Hong Kong 22.3

14 Poland 14.0 Ukraine 21.4

15 Malaysia 13.3 Thailand 19.1

16 Turkey 12.8 Saudi Arabia 17.3

17 Portugal 11.6 Greece 16.4

18 Thailand 10.9 Canada 16.0

19 Ukraine 10.5 Poland 13.4

20 Netherlands 9.6 Macao (China) 12.9

Source: UN World Tourism Organization

Need for Structural Change

• Globally, tourism is booming (it was worth

almost $1 trillion in 2010) but Canada

has not reached its full potential

• Public policy challenges in three key areas

(M.A.P.) are inhibiting growth in the sector:

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Marketing

Access

Product

Marketing

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Slated to decrease to $58

million in 2013-2014

• Competitive and sustainable funding for

the Canadian Tourism Commission

• “The giant has awoken”:

• The new US Corporation for Travel

Promotion will present Canada with

stiff competition

National Tourism Organization Funding for 2010

($CDN millions)

India 248.5

Ireland 211.3

United States* 200.0

Mexico 170.0

Australia 147.1

Malaysia 128.2

South Africa 118.1

France 111.5

Korea 94.2

New Zealand 88.5

Brazil 83.9

Bahamas 81.8

Switzerland 80.0

Canada 72.0

Source: CTC

*Announced budget of US Corporation for Travel Promotion

Access - Aviation

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• More competitive tax policy

• Canada is a “Fly-to” destination, but our cost structure is a barrier to success.

• Taxes & Fees: Airport rents, fuel taxes and security fees have rendered us 125th in

the world for aviation cost structure based on the World Economic Forum Travel and

Tourism Competitiveness Report.

Club Sandwich of Taxes and Fees

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Airport Ground Rents: $280 million

Excise tax on aviation fuel: $71 million

5% GST on AIFs: $35.75 million

NAV Can: $120 million

Annually, the government collects just over $1 billion

in aviation taxes and fees

Air Transport Security Charge Tax: $572 million

+ 5% GST on ATSC: $28.6 million

$600.6 million

5% GST on $1.2 billion in NAV Can fees: $58.4 million

Aviation Costs Eroding Tourism Spend

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0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2011

2010

Increase in Tourism Receipts

Tourism expenditures

Passenger air

transport

Tourism receipts up 3.4% in 2011, mostly due to increased

aviation costs

Access – Visa and Border Issues

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• Facilitating the process of crossing the

Canadian border is essential for

generating more business and leisure

travellers:

• Improve border access and

infrastructure

• Build on pre-clearance services and

trusted traveller programs

• An effective visa system to

encourage visitors from key

emerging markets including Brazil,

Russia, India, China and Mexico

“P” for Product

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• Investments in tourism products owned by

federal and provincial governments

(parks, museums and heritage areas)

• Renewal of support for attractions and

festivals, creates urgency for travellers to

choose Canada

• Addressing medium and long term-labour

shortages

There is No “Anti Tourism” Lobby…

…..But we are operating in a crowded field

Resetting the Agenda – Your Industry Needs You

• Tourism’s value recognized through FTS, but didn’t translate

through budget process

• Crowded marketplace – Many competing interests in Ottawa,

and tourism needs to punch its weight

• Need to “activate” our tourism champions– Success in

Ottawa depends on the industry’s commitment to change

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