Investing in Canada’s tourism sector represents a powerful pathway to achieving the government’s core priorities for accelerated economic growth and enhanced competitiveness. As a dynamic engine of job creation and a significant export industry, tourism’s revitalization directly supports nation-building projects that connect and transform our country, while fundamentally modernizing Canada’s economy.

Boosting investment is essential to keeping Canada’s tourism destinations competitive and compelling to global visitors. Investment in tourism infrastructure — including airports, accommodations, conference venues, and attractions — will help modernize facilities, improve the travel experience, and support spending growth in both urban and rural destinations. According to the Business Development Bank of Canada (BDC), a 10 per cent increase in tourism spending could boost Canada’s GDP by a full one per cent—a powerful return on investment that fortifies thousands of businesses and creates sustainable employment for generations to come.

Unfortunately, fierce global competition presents a challenge for attracting tourism investment. On the World Economic Forum’s Travel & Tourism Development Index (TTDI), Canada ranks 37th in travel and tourism capital investment intensity. Nations that excel in this arena often elevate the tourism sector, simplify taxation frameworks, and deploy a mix of public and private financial incentives that are dedicated to drawing in tourism capital, making them more appealing to private investors.

Canada can create a more predictable and financially attractive environment for investors by adopting a comprehensive approach to supporting investment aimed at renewing tourism infrastructure, revitalising tourism assets, and developing new ventures. This means advancing targeted financial measures and effective policies that strengthen Canada’s investment climate, drive capital into tourism infrastructure, and propel growth in large-scale, capital-intensive ventures.

Recommendation 1

Implement a tailored Capital Gains Reinvestment Deduction to stimulate re-investment into capital-intensive tourism projects. This deduction would allow for the deferral of capital gains tax on asset sale proceeds when re-invested into a different form of capital property. Targeted re-investment will accelerate the modernization and expansion of tourism infrastructure across the country and maximize the sector’s significant contribution to job creation, regional economic diversification, and environmentally sustainable business practices.

Recommendation 2

Streamline the Capital Cost Allowance (CCA) to incentivize tourism investment and modernization. Introduce accelerated CCA rates for a defined class of capital-intensive tourism projects including accommodations, venues, attractions, and transportation infrastructure; and for depreciable assets crucial to modernizing the sector, such as digital and sustainable technologies.