Ontario’s new ‘Staycation Tax Credit’ another blow to int’l travel at a crucial time for industry’s recovery

TORONTO — As if the outbound travel industry doesn’t have enough working against it coming out of the pandemic, travel retailers and suppliers will now have to compete with the Ontario government’s new ‘Staycation Tax Credit’ that incentivizes Ontarians to vacation at home next year.

The brand new tax credit, announced yesterday as part of the 2021 Ontario Economic Outlook and Fiscal Review, is billed as a temporary, first-of-its-kind credit that would provide Ontario residents with support of 20% of eligible 2022 accommodation expenses of up to $1,000 for an individual and $2,000 for a family, for a maximum credit of $200 or $400 respectively.

Ontarians would be to apply for the refundable credit when they file their 2022 Personal Income Tax (PIT) returns. Eligible accommodation expenses include hotel, motel, resort, lodge or B&B stays in Ontario, for leisure stays of less than a month Jan. 1 – Dec. 31, 2022.

No doubt the Ontario government is looking to boost domestic travel and support Ontario’s tourism operators, which have been severely negatively impacted by the pandemic.

But the outbound travel industry has been devastated too, and for many travel agents and tour operators, 2022 has been the light at the end of the tunnel after more than a year and a half of travel restrictions on international travel.

Plus, as outlined yesterday at the Canadian Travel & Tourism Roundtable’s latest briefing in Ottawa, the cost and hassle of the federal government’s pre-departure mandatory PCR testing for passengers arriving back in Canada is proving to be a deterrent for many Canadians who have been looking forward to long-awaited international getaways. Families with as-yet-unvaccinated kids – who also face two weeks away from school and daycare upon returning to Canada – are particularly hard hit by the PCR test costs, says the Roundtable, as are seniors.