New Tourism Investments in Budget 2023 Set Stage for Tourism Growth Strategy

The 2023 Federal Budget A Made in Canada Plan, tabled today at 4pm, comes as Canada is facing record-breaking inflation, slowed economic growth and uncertainty in financial markets.

Here are the highlights for hotels:

• $50 million over three years to Destination Canada to attract major international conventions, conferences, and events to Canada.
• $108 million over three years to the Regional Development Agencies to support communities, small businesses, and non-profit organizations in developing local projects and events.
• $14 million over two years, starting in 2024-25, for the Department of Canadian Heritage to support the Building Communities Through Arts and Heritage program for local festivals, events, and projects.
• $10 million over five years, starting in 2023-24, for Immigration, Refugees and Citizenship Canada for biometrics, which will help expedite the processing of citizenship applications.
• $1.8 billion over five years, to the Canadian Air Transport Security Authority (CATSA) to improve screening service at airports. 

ANALYSIS

This budget is lean and focuses principally on affordability.

In this environment, we were pleased to see investments for tourism and hospitality, totalling $172M. This is the largest investment made by a Canadian government in any previous growth strategy, and an important step towards our rebuild.

The Budget responds directly to two of our most important asks with an unprecedented $50M fund over 3 years to attract major international conferences and events, and a cash stimulus fund of $108M over 3 years to support regional tourism product.

The government is investing $1.8 billion over 5 years to improve airport screening and wait times. This is also very good news.

Of note, the government announced its intent to crack down on “junk fees,” (including event and excess baggage fees) through a comprehensive review. We will be actively engaged on the policy development in this area to ensure that destination marketing and resort fees are not targeted in this review.

In this budget the government re-affirmed its commitment to ensure that large digital corporations, like Airbnb, pay their fair share of tax on their income. We will work actively with the government to ensure a fair income tax system is achieved.

As the labour shortage continues to hamper growth, HAC was also delighted with yesterday’s announcement which extended the industry’s prioritized access to the Temporary Foreign Worker Program (30% cap for hotels) and the inclusion of lower-skilled tourism and hospitality workers in the Economic Mobility Pathways Program pilot. HAC will continue to build on this progress to ensure that labour is a central pillar in the Tourism Growth Strategy.

Overall, the Government continues to support the industry and has made several important investments in this Budget. 

BUDGET DETAILS RELEVANT FOR HOTELIERS

Tourism Investments

• Budget 2023 announced more details regarding the upcoming Tourism Growth Strategy, including the following:
  • $50 million, over 3 years starting in 2023-24, to Destination Canada to attract major international conventions, conferences, and events to Canada.
  • $108 million, over 3 years starting in 2023-2024, to the Regional Development Agencies to support destination development.
• $1.8 billion over five years, starting in 2023-24 to the Canadian Air Transport Security Authority (CATSA) to maintain and increase its level of service and improve screening wait times at airports.
• Expansion of eligibility for the Electronic Travel Authorization Program to low-risk, trusted travellers from additional visa required countries.
• $210 million, over five years, to VIA Rail formaintenance on rural routes and service improvements.
• $14 million, over two years, startingin 2024-25, for the Department of Canadian Heritage to support theBuilding Communities through the Arts and Heritage

Immigration

• $10 million, over five years, starting in 2023-24, to Immigration, Refugees and Citizenship Canada for biometrics, which will expedite the processing of citizenship applications.
• $123.2 million to boost Francophoneimmigration in Canada, including support for Canadian employers torecruit French-speaking foreign workers, and increase support forthese immigrants once they arrive in Canada.

Labour, Skills & Training

• $197.7 million in 2024-25 to the Student Work Placement Program to continue work integrated learning opportunities for students through partnerships between employers and post-secondary education institutions.
• Extend temporary employment insurance support for seasonal workers until October 2024 which will total $147 million over three years.
• $5.4 million over three years, starting in 2023-24, to Employment and Social Development Canada to the Work-Sharing Program to provide support to Canadian workers and businesses.

Housing & Affordability

• A federal review of corporate housing investors that have contributed to excessive renovictions, above-guideline rent increases, and other actions that have made rent more expensive for Canadians.
• Delivering a top-up to the Canada Housing Benefit in December 2022, which provided low-income renters with a $500 payment to help with the cost of housing.

Digital Services Tax

• Budget 2023 re-asserts the government’s commitment to work with international partners to develop a multilateral tax framework for Digital Service providers.
• The government will continue to implement its own Digital Services Tax if a multilateral agreement is not reached by 2024.

Small Business Initiatives

• Commitments from Visa and Mastercard to lower fees for small businesses.