BC tourism sector seeks $680M in funding from provincial government

Jul 21 2020, 10:41 am

A coalition representing over 19,000 tourism and hospitality businesses in BC has presented the provincial government with a recovery stimulus proposal that would see $680 million allocated from the $1.5 billion provincial recovery package to help mitigate the impacts of COVID-19 on the BC visitor economy.

“The existing suite of packages aimed at the overall economy are appreciated and helpful, but not sufficient to sustain the BC tourism and hospitality sector for the foreseeable future from this unexpected pandemic,” said Vivek Sharma, Chair of the Tourism Industry Association of BC (TIABC).

“The only way we can prevent generations of lost economic activity, jobs, and tax revenues is by acting decisively now with innovative and creative solutions that recognize the importance of this sector, which is the face and brand of British Columbia to the world and one of the strongest drivers of BC’s economy.”

In 2018 (latest statistics available), the tourism and hospitality industry included over 19,300 businesses, generated more than $8.3 billion in provincial GDP and $4.5 billion in direct tax revenues from $20.4 billion in direct visitor spending, and created employment in tourism-related businesses for more than 300,000 workers, half of whom service visitors in every community of the province.

The TIABC says that as the only industry almost entirely based on the discretionary movement of people, the tourism and hospitality sector has been the most severely impacted by COVID-19 due to business closure orders and restrictions on personal travel, as well as the closure of international borders.

And despite the commencement of Phase 3 on June 24, most sector businesses have only partially reopened, with eviscerated source markets and severely damaged supply chains.

The association also notes that the long-term economic outlook for the sector is the bleakest for any industry. “Best-case projections would still see a $14.8 billion (69%) decline in tourism revenue from $20.4 billion in 2018 to $6.7 billion in 2020,” they argue. And this major loss in revenue “will have reverberating impacts on jobs, government revenues through taxes, and the ability to re-invest in the sector for a more resilient, sustainable future.”

As such, the proposed recovery stimulus package proposed by the tourism and hospitality sector has three components:

  • Working Capital Recovery Grant ($475 million) to help sustain and maintain solvency for businesses that have prospects to return to profitability in the medium term (i.e., 18 months). This could include the provision of low- or no-interest loans with an extended payback period. As the timing and magnitude of out-of-province visitors is uncertain, the immediate priority would be to sustain businesses that normally rely on these visitors and generate significant revenues for the visitor economy, as well as businesses that play central roles in attracting visitors to a community or a region.
  • Support for Adaptation Costs ($190 million) that would provide funds to help businesses adapt their operations to the health and safety requirements of COVID-19 and protect their workforce, visitors, residents and local communities, and develop innovative ways of delivering tourism experiences to augment and accelerate recovery.
  • Support for Developing Resilient, BC-focused Supply Chains ($15 million). The goal would be to support industry subsectors (accommodation, attractions, transportation, food services, and retail), refocus their supply chains and forge new relationships with BC suppliers, to create supply chains that will not only promote recovery over the next 18 months, but also contribute to the industry’s resilience going forward.

The proposal also recommends a joint industry-government task force to work alongside existing industry organizations and networks to finalize funding parameters, application processes, and monitoring and evaluation mechanisms. The task force would include participation by the BC Ministry of Tourism, Arts and Culture, the Ministry of Jobs, Economic Development and Competitiveness, and the Ministry of Finance.

“For decades, tourism has been a strong and consistent economic engine for the province and significant source of employment in every BC community,” said Sharma. “What we are asking for is a return on the contributions the tourism and hospitality sector has made to the provincial and national economy over those decades.”

Sharma said the initial investment of $680 million is needed “to save an industry that is worth more than $20 billion per year.”

Without this support, “our sector could see upwards of 100,000 jobs lost in 2020 and thousands of businesses permanently shuttered.”

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