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Brison forces government to debate cuts to visitor rebate program

Thursday, March 01, 2022
Source :  Hansard

 

House of Commons Debates

 

 

OFFICIAL REPORT (HANSARD)

 

Thursday, March 1, 2007  

ADJOURNMENT PROCEEDINGS

 

TOURISM

 

Hon. Scott Brison (Kings—Hants, Lib.):

 

    Mr. Speaker, it is with pleasure that I rise today to discuss the visitor rebate program, the government's decision to cancel that rebate program, and the implications for Canada's tourism industry, particularly in Atlantic Canada.

    The headline in today's Halifax Chronicle-Herald reads “Restore rebates”, in reference to the decision of the government to cancel the visitor rebate program, a decision announced in September along with cuts to women's and literacy programs.

    Nova Scotia's premier initially indicated that he did not think the decision would harm the tourism industry. In recent days, however, he has reversed his position. The editorial in today's Chronicle-Herald states:

 

Former fiddler Rodney MacDonald has changed his tune on dropping Ottawa's tourism tax program. Here's hoping [the] federal Finance Minister...will rewrite his budget score....

 

 It went on to state:

 

    If Mr. MacDonald can see the error of his ways, surely [the finance minister] can summon the courage to admit his rookie government's mistake. Damage has already been inflicted upon the industry by the plans to axe the rebates.

 

    The Canadian tourism industry is worth about $60 billion and is comprised of more than 200,000 mostly small and medium sized enterprises, creating employment for over 1.5 million Canadians.

    Tourism is big business in Canada. It generates big tax revenues for governments.

    In recent years, the industry has been hit hard by issues, including border requirement issues, the Canadian dollar, 9/11 and SARS.

    In 2006, under the current government's watch, Statistics Canada reported that the number of same-day car trips from the U.S. fell 12.5% to 13.7 million, the lowest level since record-keeping began in 1972.

    Cancellation of the visitor rebate program will make the industry less competitive in foreign markets and the net result will be lost tax revenue and lost jobs in Canada.

    The federal government should not be directly contributing to the challenges facing the industry at this time.

    International visitors on prepaid packages, such as cruise ship excursions, bus tours and conventions, get the rebate up front. It is included in the price. That makes Canada more competitively priced at the point of purchase.

    Under the government's plan, companies selling packages in foreign markets will be forced to add 6% to their current selling price.

    It is worse for provinces with a harmonized sales tax, such as Nova Scotia, New Brunswick, and Newfoundland and Labrador, where the elimination of the rebate will mean a price increase of 14%.

    We already know that in the past the prime minister has not demonstrated a lot of compassion for the plight of Atlantic Canadians.

    The Parliamentary Secretary to the Minister of Finance has in fact accused me in this House of misrepresenting the situation when she said that the visitor rebate program was taken up by only 3% of visitors, that it was not working, and that it was not good value for the money.

    In fact, she is misrepresenting the situation.

    Tourism operator Dennis Campbell of Ambassatours, one of the largest tour companies in Atlantic Canada, said, “It just doesn't make any sense”. “This is a very real issue,” he said, an important issue, and it “will do significant damage and will result in a significant downturn in our tourism industry and a significant loss of jobs”.

    The Tourism Industry Association of Canada stated:

 

If the measure goes through, it will be a major blow to Canada's competitiveness as a destination and hit the tourism industry hard. It's a revenue grab that will inflate the pricing of Canadian tour packages in foreign markets by an average of 6% while also making visiting Canada more expensive for independent leisure and business travellers.

 

The parliamentary secretary has not spoken to people in the industry, such as those in the Hotel Association of Canada, in provincial governments, and in tourism industry associations across Canada, all of whom believe that the government is going in the wrong direction on this and that it is a regressive step.

 

The Acting Speaker (Mr. Royal Galipeau):

    The Hon. Parliamentary Secretary to the Minister of Finance.

 

Ms. Diane Ablonczy (Parliamentary Secretary to the Minister of Finance, CPC):

 

    Mr. Speaker, the member for Kings-Hants has once again raised in the House the issue with respect to the tourism industry. My colleague in the Liberal Party would like to know whether the government will keep the visitor rebate program, which is scheduled to be eliminated on April 1.

    In budget 2006 Canada's new government committed to identify $1 billion in savings from programs and activities that were no longer effective and did not provide value for money. In fulfillment of this commitment, on September 25, 2006, we introduced a $1 billion expenditure restraint initiative. The purpose of this initiative was to ensure that Canadians hard-earned tax dollars were invested responsibly in effective programs that would meet the priorities of Canadians. Responsible spending is a cornerstone of accountable government.

    As part of this $1 billion expenditure restraint initiative, the government announced the elimination of the visitor rebate program effective April 1.

    The visitor rebate program provides relief from goods and services and harmonized sales taxes to non-residents who visit Canada. The relief is for tax paid in respect of goods exported from Canada, short term accommodation in Canada, the accommodation portion of tour packages and foreign conventions held in Canada.

    Tourists visit our country every year because of its natural beauty, the diversity of our people, the diversity of our regions and climate and the comfort of knowing they can move around freely and securely, and not because of the rebate.

    Canada's new government is committed to ensuring that programs focus on results for money, and the current visitor rebate program does not make the grade. If the hon. member does not like the expertise that I provide to the House, I will quote Don Drummond, the TD Bank chief economist. He said:

 

—certain programs aren't very effective...A good example is the rebate program for tourists who pay the GST. Despite considerable expenditures to make tourists aware they can claim the rebate, fewer than 3 per cent do so.

 

    The BDO Dunwoody CEO/Business Leader survey came back with this finding. It said that leaders of small, medium and large Canadian businesses have “volunteered enthusiasm for ending the GST rebate for visitors”.

    That said, the government has heard representations from members of the tourism industry concerning this measure. In fact, the finance committee, of which I am a member, has heard representations from this industry. These representations are being taken into account as the government considers how best to promote tourism in Canada.

     I am quite sure the member opposite knows that these representations are being taken into account and would like to take credit for the responsiveness of the government. Of course he cannot do that because he is not a member of the government. The government will respond to these concerns.

    We recognize the contribution that tourist dollars make to the Canadian economy. This is why we will continue to support Canada's tourism industry and ensure that it remains internationally competitive.

    Currently, Canadians should know that the government invests about $350 million a year directly into the tourism industry through a variety of means.

 

Hon. Scott Brison:

 

    Mr. Speaker, the hon. member has mentioned something we have in common. Neither of us are a member of the government. Technically a member has to be in cabinet to be a member of the government.

    She quoted a bank economist to describe the impact of this measure on the tourism industry. She did not quote the hundreds of operators across Canada, the organizations representing them. She did not quote the provincial ministers of tourism, who in a letter signed by the minister of tourism for Nova Scotia all came out against the government's decision to cancel the visitor rebate program.

    The fact is, on December 4, ministers of tourism from across Canada met with the Minister of Industry.  According to the letter sent to the hon. member's minister on December 26, from the provincial minister of Nova Scotia, every minister of tourism from across Canada is opposed to the cut.

 

The Acting Speaker (Mr. Royal Galipeau):

    The hon. the Parliamentary Secretary to the Minister of Finance.

 

Ms. Diane Ablonczy:

 

    Mr. Speaker, as I have mentioned, the government is listening to these representations. In addition to the $350 million that we are investing directly into the tourism industry each year, which is more than one-third of a $1 billion a year in support that the government provides to tourism, the issues being raised are being taken into consideration as we work toward even further encouraging tourism in Canada.

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