BC Chamber Op-Ed: Canada must become more competitive in tourism

In the News, Op-eds & Commentary

The following op-ed was published  August 23, 2013, in the Vancouver Sun.

By: John Winter, president and CEO, BC Chamber of Commerce

We’ve all seen the old posters.

A pretty lady and her handsome husband stand at the rail of a caboose, gazing joyfully at soaring mountains around a sylvan lake. In the distance a moose grazes.

For decades, this was how Canada sold itself as a tourism destination. And it worked. From Second World War onward, Canada became one of the largest tourism destinations in the world.

It’s now one of our biggest industries, earning nearly $ 85 billion annually. Only oil and gas and agri-food are larger.

Through the decades the mountains and cheerful moose have been joined by a tremendous list of attractions: from the Tall Ships Festival to Just for Laughs. From Cape Breton’s Highland Games to the Okanagan’s Salute to the Sockeye; Signal Hill to the Vancouver Aquarium; the Toronto Film Festival and the Montreal Grand Prix to the Calgary Stampede to museums in virtually every community across the country. Who hasn’t visited the Suspension Bridge in North Vancouver?

Tourism is critical to every region and every one of our chambers of commerce. Its big real estate and it’s a hundred thousand small businesses. It’s everything from taxis and restaurants to credit cards and huge hotels and convention centres, to museums and festivals.

And it is in need of help.

In 10 years, Canada slipped from fifth place in the world to 18th as a tourist destination. Fifteen years ago we earned five per cent of the world’s tourism dollars, now we earn three per cent.

The strengthening Canadian dollar and the recession starting in 2008 exacerbated the situation but the trend was clear long before those factors kicked in, and it’s continuing now that the U.S. economy is growing again.

But faced with these mounting problems, Canada has failed to respond. Many of the reasons for our declining competitiveness are self-inflicted.

What’s happening? Simply put, Canada is not competing. Everyone else is fighting to attract visitors with lavish marketing, modern attractions, low costs and reduced paperwork.

Canada has let itself slide. Our sales efforts are dramatically less than our competitors. Investments in properties and attractions are slowing, creating what one expert recently called a “rusting out” of our tourism product. And we’ve become a high cost, high hassle destination.

Since these problems are self-inflicted, there is an opportunity here for the government and for all of us. We can decide to fix our problems. The essential attractions of this amazing country are still here. Let’s begin with a better sales job. Demand is everything. It’s a chain reaction. If people don’t know about us the desire isn’t created. They won’t want to come, and, in the end, it doesn’t matter what kind of deals we offer.

Canada has cut its marketing budget severely. So today, smaller players like Ireland and Australia are outspending Canada more than two to one. This spring the United States launched a massive campaign, Brand USA, part of which directly targets Canada. These are urgent threats. Our national destination marketing budget should move from the current $58 million to a competitive level. Perhaps $150 million?

Our government plays a direct role in our hospitality; a role that needs to be refreshed. Our visa system is falling seriously behind — in some markets the U.S. delivers a visitor visa in 24 hours, while Canada invites applicants to mail their passport to us and wait an undetermined number of weeks. Serious labour problems remain unaddressed. We levy our GST on visitors but, unlike most other countries, we don’t provide a rebate to visitors.

We need more competitive air travel services. But Canada imposes many public costs which drive our airline prices to uncompetitive levels. For instance, unlike most nations, Canada makes airline passengers pay 100 per cent of the cost of air security, and Canada’s air security costs are among the highest in the world.

Isn’t security, in all its forms a primary role of government? Again, unlike most nations, passengers in Canada pay the entire cost of air navigation, and airports, and the government still extracts hundreds of millions from airports as “rent.” A lot of the price of a ticket — sometimes 60 per cent — is not going to the airline that collects it. The costs of getting here will deter people from ever experiencing the fine product that exists from coast to coast to coast.

As the Harper government takes steps to re-energize itself at the midterm of its mandate, tourism is an area ripe for success. A government pledge to craft new policies to improve our tourism competitiveness would be timely and popular in every region.