Budget 2008 Analysis and How it Relates to Tourism
Introduction
The Government of Canada presented its Budget 2008, entitled “Responsible Leadership” on Tuesday, February 26, 2008 in the House of Commons.
The Tourism Industry Association of Canada (TIAC) commended the Government for several initiatives in the Budget issued in a press release on February 27, 2008. (Please refer to www.tiac.travel/english/press.asp for a copy.)
The Government of Canada indicates that the Budget initiatives are part of an economic plan called Advantage Canada, which is intended to enhance Canada’s long-term prosperity.
Budget 2008 presents several initiatives that will have a direct impact on Canada’s $66.9 billion tourism sector. These initiatives are well-received by a sector that has endured significant hardship over the past several years.
Border Initiatives
Most notable in the Budget is the allocation of funding directly for improvements to the Canadian border and initiatives that are related to the crossing of goods and people between Canada and the United States.
1. $75 million over two years to the Canada Border Services Agency to ensure it has the necessary resources to effectively manage the flow of people and goods.
The additional funds will increase the number of on-site border service offices. This is positive news for the tourism sector whose primary foreign market is the U.S. With the heightened border security since 9/11, travellers have often faced longer wait times. Expediting the flow of traffic will ensure that a travellers’ experience of entering Canada is a pleasant one and not one likely to serve as a deterrent to future visits to Canada.
2. $14 million over two years for the Canada-US NEXUS program for high-frequency, low-risk travellers across the border.
The funds will be allocated towards dedicated infrastructure, increasing the number of users from 160,000 to 350,000 and better targeting frequent travellers. This initiative is welcomed for the frequent business traveller entering Canada and the U.S., and because it frees up border resources to facilitate the processing of regular travellers.
3. $6 million over two years for federal activities to support provinces and territories in introducing Enhanced Driver’s Licenses.
Since the introduction of the Western Hemisphere Travel Initiative (WHTI) and the impending requirements for a passport for travel between Canada and the U.S., TIAC has been advocating for the acceptance of alternative trusted travel documents such as the Enhanced Driver’s License (EDL). The funding allocated for this initiative is timely for it predates the introduction of the land and sea rule of WHTI set to come into effect in June 2009 (the passport requirement for air took effect in January of 2007). TIAC is hopeful that individual American states will also adopt EDLs to provide travellers with an option that is more affordable and more readily obtainable than a passport.
4. $26 million over two years for the development of biometric data in the issuance of visas to foreign nationals entering Canada.
The Government will develop biometric methods of identification such as fingerprints and live photographs to ensure accurate and secure entry of foreigners into Canada. This initiative will facilitate the entry of legitimate travellers into Canada, thereby providing travellers with an assurance of enhanced security.
5. $29 million over two years (as part of the Security and Prosperity Partnership of North America) towards greater efficiency at the Canada-U.S. border, future elimination of duplicate baggage screening on connecting flights in North America, as well as other initiatives.
The two initiatives noted above will directly impact the tourism sector. Funds will be allocated towards better cross-border communication systems and improving wait-time information. The elimination of duplicate baggage screening will facilitate travel within North America. This is a positive step for the airline sector and will reduce the burden on the traveller who will no longer be required to pick up baggage at numerous stops along their journey solely for security reasons.
Tourism Products and Experiences
There is funding in the Budget for several initiatives that relate directly to tourism products and experiences. Continuous development and improvement of Canadian tourism products and experiences will contribute to the viability of the sector.
6. $24 million over two years to assist with the further development of tourism-related infrastructure at strategic ports of call along the St. Lawrence and Saguenay Rivers to enhance their appeal as destinations for the global cruise ship market.
The cruise ship market has continued to grow in recent years. Direct funding for tourism-related infrastructure along the St. Lawrence and Saguenay Rivers is positive for the cruise-ship market but also for the various communities along the St. Lawrence and Saguenay Rivers whose businesses and attractions will benefit from the influx of travellers arriving at their ports of call.
7. $9 million over two years to address operating and infrastructure pressures in Canada’s National Museums.
Canada’s national museums are important in promoting Canada’s cultural heritage to tourists. Funding that will strengthen these institutions will ensure that tourists experience Canada’s culture for many years to come.
8. $8 million for the establishment of commercial harbour facilities in Pangnirtung, Nunavut, which should help to promote the development of the nascent tourism industry in Canada’s north.
Many say that Canada’s north is one of the nations’ best kept secrets. Further development of the tourism infrastructure in the north will enhance Canada’s capacity to provide visitors with a greater sense of the incredible beauty and wildlife that characterizes the North. This announcement includes support for the establishment of a marine bunker fuel station.
9. $25 million allocated to the 2010 Olympic and Paralympic Torch Relays.
The 2010 Olympic and Paralympic Games is set to be one of Canada’s biggest international events. Although taking place in Vancouver/Whistler, the Vancouver Organizing Committee (VANOC) has made efforts to ensure that the event is regarded as “Canada’s Games.” Through the Torch Relay, communities from across Canada will be showcased and celebrated. The Torch Relay will contribute indirectly to the tourism sector across all of Canada.
10. $70 million over two years for Aboriginal economic development.
Aboriginal tourism is an important cultural and heritage product for the Canadian tourism sector. Although specifics on this initiative have yet to be determined, TIAC hopes that support for Aboriginal economic development will include the Aboriginal tourism sector.
11. $12 million over two years to Parks Canada for the implementation of an enhanced law enforcement program within Canada’s National Parks.
Canada’s National Parks are iconic natural wonders within Canada. The tourism sector is supportive of any measures that will protect and sustain the beauty of these parks.
Transportation Initiatives
Affordable, safe and multi-modal transportation is vital to the tourism sector in Canada. There are a couple of initiatives in the Budget for transportation sectors that will also positively impact the tourism sector.
12. $147 million in 2008-09 for the Canadian Air Transport Security Authority (CATSA) to address operational pressures.
CATSA is responsible for the security screening of air passengers and their baggage at Canada’s airports. The tourism sector promotes the growth of air traffic in Canada, as it will positively impact Canada’s airports, airlines and communities. However, with increased air traffic, air security measures must also be maintained. Currently, an Air Travellers Security Charge (ATSC) helps to off-set the costs of these measures but the user cannot bear the cost alone. TIAC is pleased that the necessary resources have been devoted to CATSA in order to ensure that the cost of the ATSC is not increased.
13. $17 million over two years for Marine Atlantic Inc. for the ferry service between Newfoundland and Nova Scotia.
The ferry service between Newfoundland and Nova Scotia is an important transportation link between the two provinces. This service is used extensively by visitors on a seasonal basis and increased funding to address the growing traffic on this route is a welcome initiative.
Human Resource and Labour Market Initiatives
Access to qualified staff continues to be a challenging issue for the tourism sector. The Budget addressed Canada’s immigration system and specifically foreign workers.
14. $22 million over two years, growing to $37 million per year, to modernize the immigration system, including legislation to speed up the processing of permanent resident applications, ensuring shorter wait times and making Canada’s immigration system more competitive.
The tourism sector is in need of qualified employees and staff to address its labour requirements. While the recent improvements to the Foreign Temporary Worker Program will help alleviate short-term needs, the commitment to modernizing the immigration system for permanent residents is a positive initiative that will help in the medium-term to address the labour market shortages in the tourism sector.
Other General Initiatives
The tourism sector is largely comprised of small and medium sized enterprises (SMEs). Initiatives that will alleviate reductions in regular business reporting requirements will allow for increased time to develop the business. Measures such as the reduction of paperwork burdens are a positive step for businesses, especially SMEs.
Conclusion
TIAC is pleased with the Budget 2008 and the number of direct and indirect initiatives that will positively impact the tourism sector across Canada. TIAC has advocated to the Federal Government for several of these initiatives.
However, TIAC continues to work actively on several other files not addressed in the Budget including the designation of Canada as an “approved destination” for group travel by China; a reduction in airport rents; and an increase in the mandatory budget of the Canadian Tourism Commission.
Source: TIAC (Tourism Industry Association of Canada) Talk, March 5, 2008 Issue.
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