Gateway to GrowthDavid Goldstein, President & CEO, TIAC

Prospects for Canada’s Tourism Industry

• Receipts up 7.6%, outpacing the Canadian economy

• Masking unhealthy overreliance on domestic tourism

• Global opportunity exponential

• Canada’s competitiveness hurt by key public policy barriers

• Getting the right policy mix is key to our success = Growth, jobs and investment

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International has to be a

focus

Between 2002 and 2011, almost all countries posted gains in

international arrivals — except Canada

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

China57.6

4 Italy 39.8

Spain56.7

5 China 36.8

Italy 46.1

6 U.K. 24.2

Turkey29.3

7 Canada 20.1

U.K. 28.3

8 Mexico 19.7

Germany28.4

9 Austria 18.6

Malaysia24.7

10 Germany 18.0

Austria23.0

11 Hong Kong 16.6

Russian Fed.22.7

12 Hungary 15.9

Mexico 22.7

13 Greece 14.2

Hong Kong22.3

14 Poland 14.0

Ukraine 21.4

15 Malaysia 13.3

Thailand19.1

16 Turkey12.8

Saudi Arabia17.3

17 Portugal11.6

Greece16.4

18 Thailand10.9

Canada 16.0

19 Ukraine10.5

Poland13.4

20 Netherlands 9.6Macao (China)

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Source: UN World Tourism Organization

• The sector looks superficially healthy, but we are losing share

•Modest gains in recent years don’t begin to recapture ground lost in the last decade

• At $17.3B in 2012, travel deficit weighing heavily on the economy

• Canada’s international travel balance accounts for 1/3 of overall trade deficit:

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Travel a Needless Drag on the Canadian Economy

Key Success Barriers: Marketing Investment

• All of Canada’s major competitors are making greater investments in tourism marketing.

• However, by cutting the CTC’s budget Canada is moving in the opposite direction.

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Slated to decrease to $58 million

in 2013-2014

2011 Global Tourism Marketing Budgets

Country BudgetBudget Growth

Growth in arrivals from key markets

2011/96

Ireland $211M ↑ 14%

Mexico $153M ↑ 4%

Australia $147M ↑ 30%

Malaysia $128M ↑ 257%

S. Africa $118M ↑ 7.30%

France $112M ↑ 13%

Korea $94M ↑ 158%

NZ $89M ↑ 83%

Brazil $84M ↑ 100%

Switzerland

$80M ↑ 23%

CANADA $72M ↓ -10%

Key Success Barriers: AccessVisa and Border Issues

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• Facilitate the process of crossing the border:• Improve border access

and infrastructure

• Build on pre-clearance services and trusted traveller programs

• Streamlined visa system

Key Success Barriers: Access Aviation

• Canada is a “fly-to” destination, but our cost structure is a barrier to success.• Canada is ranked 5th with regards to access, but 136th based on aviation

cost structure.*

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*Source: World Economic Forum Travel and Tourism Competitiveness Report

• Tourism disproportionately hit with taxes and fees:

• Only export sector not “zero-rated” for GST.

• Only G8 country without value-added tax (VAT) rebate

• Costly aviation cost structure ranked 136th in the world.

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Key Success Barriers: Taxes, Fees & Levies

The Triple Dip of Taxes and Fees

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User fees and levies on aviation

$2.17B

GST on those fees and levies

$123.5M

GST on visitor spending $463M

An Emerging Consensus…• Experts and opinion-leaders agree that tourism policies are unnecessarily hindering the

Canadian economy:

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Taking Action: Driving the Federal Tourism Strategy

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• Many positives since the launch of the FTS (low-hanging fruit):• Air access agreement with Brazil

• 10 year multi-entry visas

• Commitment to expand global network of VACs to 150 by 2014

• Budget 2013 - $42M towards visa processing

• For FTS to be meaningful in the long term, we must address the key outstanding structural issues:

• Crippling taxation structure

• Lack of reinvestment in tourism marketing

Taking Action: Telling our Story

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• The Canadian Tourism Industry: A Special Report (second edition planned for 2013)

• Aviation Whitepaper

• Visa Whitepaper

• International Trade Flows Research with CTC

• Industry Polling with Nanos and CTC

Taking Action: Engaging “Ottawa”

• Grassroots advocacy campaign

• Website and e-communications

• Leveraging advocacy into key industry events (Rendez-vous Canada, Tourism Congress)

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All Politics is Local – We Need 3 Clicks

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• TIAC’s online advocacy tool makes it easy to look up and contact your MP

www.tiac.travel (under ‘Advocacy’)

The Next 800 Days

• Get involved.

• Engage your local politicians and media

• Strengthen Our Voice – Join TIAC

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