TIAC spells it out for the federal political parties

OTTAWA — Close to 40% of respondents to a new survey from the Tourism Industry Association of Canada (TIAC) say they would have to shut down their businesses today if they no longer received support from government programs.

TIAC President and CEO Beth Potter outlined the results in a new report delivered at TIAC’s first in-person board meeting since the beginning of the pandemic more than 18 months ago.

The report is meant to offer a ‘state of the industry’ snapshot in the context of the pending federal election, set for Sept. 20. The industry-wide survey canvassed tourism businesses in every province and territory.

Says Potter: “Prior to COVID-19, tourism was Canada’s fifth largest sector sustaining more than 1.8 million jobs. But since the pandemic, the industry has lost two summer seasons, drained financial reserves, taken on massive debt and now has difficulty attracting enough employees as it strives to relaunch.”

Simply put, she adds, “without the economic jargon”, tourism is “on the brink of disaster without continued federal support.”

Here’s a look at the data from the report…

Almost 40% of respondents say they would have to shut down their businesses today if they no longer received support from government programs
One-third of respondents expect more than a 50% decline in revenue in 2021 compared to 2020
One-third of respondents lost between 75% and 100% of revenue compared to the same time in 2019
64% of respondents indicated low cash flow as a challenge facing their business, with a majority citing financial shortfall and burden as the biggest risk currently impacting them
Almost half of respondents have taken on over $50,000 in debt to keep their business afloat
Majority of respondents predict it will take between 1 to 3 years for sufficient tourism demand to return to the pre-pandemic level of profitability
65% of respondents accessed the Canada Emergency Wage Subsidy (CEWS), and 35% accessed the Canada Emergency Rent Subsidy (CERS)

“Even with extensive vaccinations and the gradual lifting of restrictions, a bleak fall and winter is certain. There will be no conventions, limited business and government travel, and the wind down of support programs (CEWS & CERS) could not come at a worse time,” says Potter.

Potter urged all federal political parties, as they get ready to head into tonight’s first English-language debate, “to support a qualified and limited financial support program from September 2021 to May 2022 to the hardest hit businesses.”

Specifically TIAC’s ask includes …

Survival support for the hardest hit tourism, hotel and event businesses of any size that have experienced a 40% loss in revenue in any 12-month period after March 31, 2020.
Government support to cover negative cash flow from normal financial operations (i.e., excluding capital expenditures and non-cash items such as depreciation or accruals). Support not to exceed 75% of normal cash expenditures.
Program to run from Sept. 1, 2021 to May 31, 2022. Cash flow calculated on a cumulative basis inclusive of CEWS and CERS.