Ottawa will spend $30-million over three years to boost tourism promotion in the United States, hoping that the lower loonie and strengthening economy south of the border will send more tourists northbound.
Prime Minister Stephen Harper made the announcement Friday in Berthier-Sur-Mer, Que., where he also announced money to renovate the Grosse Île and the Irish Memorial National Historic Site.
The new temporary cash for the Canadian Tourism Commission marks a reversal of years of spending cuts at the federal Crown corporation, which has seen its base funding slashed by more than half since 2001. The commission had cut virtually all of its promotion efforts in the U.S. to save money and focus on other regions.
Conservative Minister of State Maxime Bernier, who is responsible for tourism and the CTC, said those cuts were necessary to help the government balance the books. "Now we are re-investing in the CTC," he said.
Mr. Bernier said he will meet this summer with provincial tourism ministers to propose that they match $1.25 for every dollar Ottawa spends to promote Canada in the U.S.
"We listened to the industry," Mr. Bernier said in an interview. "I'm pretty confident that we'll have more tourists from the U.S. after this announcement. Also, I'm convinced that the provinces and the private sector will also invest money in the U.S. market."
The plan to boost tourism promotion in the U.S. was first mentioned in the government's April budget, but Friday's announcement was the first time a dollar figure was attached. The effort is expected to be made up of several smaller campaigns that would work with industry groups to target specific demographics, such as skiers or foodies.
The annual base funding for the CTC is currently around $58-million a year, meaning Friday's announcement will increase its annual funding to about $68-million a year for the next three years. The organization's budget was as high as $98.7-million in 2001, which works out to $126.6-million in today's dollars after accounting for inflation. At that time, Canada was among the top 10 tourist destinations in the world.
The Canadian Chamber of Commerce has been critical of Canada's "self-made" competitiveness problems, noting that Canada is at risk of falling out of the top 20 – it stood 17th in 2013, according to the latest data cited by the chamber. The organization blamed the drop on not spending enough to promote tourism.
Chamber senior vice-president Warren Everson said Friday's announcement is welcome, but even if the CTC budget were doubled Canada would still be lagging other countries in the battle for tourists.
"Other countries are spending much more," he said. "The more money governments spend in marketing tourism, the more money governments make [in tax revenue]. It's a highly lucrative enterprise for governments at all levels as well as for all the rest of us too, so we think it's a very virtuous thing and one that continues to command more money."
The combination of a slow economic recovery in the U.S., coupled with Canada's high dollar, meant that many Americans took a pass on Canada in recent years. However, the latest figures show that trend is reversing.
Americans made 591,965 overnight trips to Canada in March of this year, which represents a 7-per-cent jump over March, 2014. The U.S. is by far the main source country for tourists here, but travel from other countries is growing at a faster rate than the growth in tourism from States.
There were 37,895 visitors to Canada from the United Kingdom in March – a 22.5-per-cent increase – and 22,778 visitors from China in March, a 23.9-per-cent jump. Latin America is also a growing source of tourists, with 18,614 people arriving in March, representing a 23.5-per-cent increase over March, 2014, according to the CTC.
According to the federal government's official tourism strategy, tourism represents about 2 per cent of Canada's overall gross domestic product and directly employs about 594,500 people.
NDP tourism critic and Windsor-area MP Brian Masse said the government should never have stopped promoting tourism in the U.S. in the first place.
"We gave up on our number one opportunity for tourism," he said. Increased border security has also deterred potential American visitors, he said, suggesting Ottawa should have done a better job informing Americans on the documents required at the border.