French version will follow / la version françaises suivra sous peu  

 

BUDGET DAY 2018 

 

The federal budget was released today. The macro-overview is a spending program aimed at generating more opportunities for women to enter the workforce, while evaluating tax, competitiveness and trade agreements. The scientific research community achieved a significant amount of funding in the budget after 15 years of calling on the government for funding.

 

TIAC has evaluated the budget for our member’s interests. We have assessed how it will achieve the government’s New Tourism Vision (NTV), supported and endorsed by the industry.

 

Overall, the 2018 Budget made important announcements in line with the NTV’s goals and TIAC’s pre-budget recommendations. While this review discusses these components in detail, the following are the highlights:

 

TIAC was pleased to see that there are measures being put in place in order to address labour issues in seasonal industries. One measure includes EI Working While on Claim to help individuals in seasonal industries take advantage of work opportunities with lower risk to their financial stability. Further, Budget 2018 proposes to invest $80 million in 2018–19 and $150 million in 2019–20 through federal-provincial Labour Market Development Agreements through co-developed local solutions. TIAC recommends that the government help businesses address labour capacity by supporting timely labour market research and industry-relevant export readiness and workforce development programming. Finally, there is $194.1 million over 5 years to implement a protection program for Temporary Foreign Workers. The budget did not address any programs to better facilitate the Temporary Foreign Worker program for small businesses or seasonal industries.

 

 

An interesting highlight in this budget for the tourism industry comes from the developing Canada – China relations. Innovation, Science and Economic Development Canada (ISED) will receive funding to support the Canada-China tourism year.  We expect more details to come forward from ISED’s tourism branch in the coming weeks, and will continue to advise the industry on how to get involved through the TIAC Talk newsletter.

 

TIAC was also pleased to see funding for Global Affairs Canada to establish a stronger Canadian diplomatic and trade support presence in China and Asia. This includes more diplomats and trade commissioners on the ground to work with Canadian businesses and connect them to market. Trade commissioners are a key resource in tourism export development, and we look forward to more in-market engagement with Global Affairs Canada in China and Asia.

 

We look forward to continue to work with the government on developing a greater push for Chinese arrivals during the remainder of 2018 and beyond. TIAC recommended in our 2018 pre-budget submission measures such as simplified visitor visas, and making these applications available in Chinese and other native languages. We will continue to advocate for these measures and make sure government and industry goals are aligned.

 

 

The Budget release shows unprecedented levels of funding towards conservation efforts in land waterways, and wildlife. As stated in the government’s budget document, Canadians have a deep attachment to Parks and they play an integral role in the global image of Canada’s landscape. This government indeed recognizes this role, as seen through the free admission program in 2017, and the continued free admission for youth to all Parks Canada areas – which is now announced as a permanent measure. Parks will also play a role in Reconciliation efforts with indigenous peoples, with $23.9 million over five years, starting in 2018–19, to Parks Canada to integrate Indigenous views, history and heritage into the national parks, marine conservation areas and historic sites managed by that agency.

 

Moving towards achieving the government’s goal of protecting 17 percent of land and inland waterways by 2020, they have allotted $1.3 billion over 5 years to measures including the expansion of national Parks and protected areas. In this funding, “this investment will contribute $500 million from the federal government to create a new $1 billion Nature Fund in partnership with corporate, not-for profit, provincial, territorial and other partners”. This impacts Parks in several ways, including money to protect species at risk, expand our wildlife sanctuaries, and coordinate efforts in conservation with provincial, territorial and indigenous partners.

 

There is also significant mention of whales and marine life in the conservation portions of the budget. The government will make available $167.4 million over 5 years to address threats to whales from human activities. While TIAC appreciates the acknowledgement of the eco-tourism and marine ecosystems in these efforts, we want to reiterate that the health of these ecosystems is vital to the tourism industry, and consultation with tourism stakeholders must continue to be a priority during this research period.

 

TIAC agrees that Parks and protected areas need to be conserved for generations to enjoy. As such TIAC reiterates that a whole of government approach needs to be taken in order to ensure the tourism industry, which is an integral part of our parks and wilderness areas, are treated as a partner and consulted on any and all new measures put forward on conservation and the environment. TIAC will continue to advocate on behalf of the industry to ensure our interests are being heard.  

 

 

We were especially pleased to see that the government in reinvesting in CATSA to allow screening to grow on pace with our increasing number of visitors. As we continue to grow our international arrivals, we need to ensure that their first and last impressions of Canada include a smooth travel process. Security facilitation plays a key role in this. $236.4 million in 2018–19, with $2.4 million in remaining amortization, to the Canadian Air Transport Security Authority (CATSA), will also allow CATSA to add new lanes for U.S. Pre-clearance of passengers at the Billy Bishop Toronto City Airport and the Quebec City Jean Lesage International Airport.

 

The $85.5 million investment in the Canada Border Services Agency (CBSA) is also important to the smooth facilitation of cross border travel. This funding will help support much needed improvements in processing times and achieving a higher level of services standards at our borders, while maintaining a safe and secure travel environment. This has been a long advocated for priority for TIAC and our border partners.

 

We recognize the establishment of the “Passenger Protect Program” which will work with our commercial air carriers to screen commercial passenger flights to, from and within Canada in order to protect safety at home and abroad. This will develop a rigorous centralized screening model and establish a redress mechanism for legitimate air travellers who experience travel delays in regards to “No-Fly” lists.

 

 

Funding for Transport Canada to renew the Remote Passenger Rail Program is good news for our rural communities, who will receive much needed access to their areas for tourists as well as creating new local transportation options. Additionally, funding has been allocated to study the feasibility of highspeed rail in the Toronto-Quebec City corridor.

 

 

TIAC heard some concerns this summer from small tourism operators about the proposed changes to taxes for small businesses. TIAC encouraged the government to consider seasonality of some industries in consultation periods, and addressed the use of passive investments and income sprinkling as important growth tools for family owned businesses. This budget announced its final recommendations regarding these changes. Going forward, a $50,000 threshold on passive income in a year (equivalent to $1 million in savings, based on a nominal 5-per-cent rate of return) would be available to business owners to hold savings for multiple purposes, including savings that can later be used for personal benefits such as sick leave, maternity or parental leave, or retirement. Access to the small business deduction will be limited based on a corporation’s passive income. Under the proposal, if a corporation and its associated corporations earn more than $50,000 of passive investment income in a given year, the amount of income eligible for the small business tax rate would be gradually reduced. As previously announced, the federal government will reduce the small business tax rate to 10% in 2018 and to 9% in 2019.

 

 

Overall, the 2018-19 Budget produced a number of measures that seem to be positive for the tourism industry. As we look towards moving forward the goals outlined in the New Tourism Vision, TIAC will be reviewing and carefully assessing these proposals in the coming days and weeks and providing updates to our membership as more information becomes available. We will as always continue to work collaboratively with Government in order that tourism interests are taken into account in implementing new initiatives and policies. 

 

TIAC would like to thank ISED and the Minister of Small Business and Tourism for their efforts in promoting and growing tourism businesses in Canada. TIAC also appreciates the great work of the Ministers of Global Affairs, Transport, Public Safety & Emergency Preparedness and Employment and Social Development for their collaboration and consideration of tourism issues in their work. We look forward to working with our government partners and stakeholders to continue to fulfill the ambitious NTV goals. 

 

 

 

For more information, please contact:

 

Director, Policy and Stakeholder Relations

613-238-6251

vaccardi@tiac-aitc.ca