Executive Summary – Canada’s Tourism Economy

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Canada’s multi-billion-dollar tourism sector employs hundreds of thousands of Canadians and is supported by all levels of government.

In 2020, due to the COVID-19 pandemic, global tourism and travel sector revenue decreased by 49% from the previous year, to US$4.7 trillion. Global tourism employment fell by 19% to 272 million jobs. Similarly, the Canadian sector earned $49.5 billion in 2020, a decline of 40% from 2019, while domestic employment fell to 1.6 million direct and indirect jobs, a decrease of 24%. About 28% of Canadian tourism revenue is generated from inbound visits.

In 2019, Canadians made 37.8 million foreign trips consisting mainly of 27.1 million visits to the United States. Additionally, Canadians made 10.7 million trips to other countries, most frequently Mexico (1.8 million), Cuba (964,000), the United Kingdom (770,000), China (666,000) and Italy (619,000).

According to the World Economic Forum’s Travel & Tourism Competitiveness Report 2019, which ranks the most competitive countries for travel and tourism, Canada ranked ninth out of 140 countries studied, down from eighth place in 2013. Canada ranked first in several sub-categories, such as safety and security, environmental sustainability and air transport infrastructure. Conversely, Canada was found to be deficient in several areas, including price competitiveness and international openness.

Other studies have found that tourism demand is concentrated in Canada’s largest cities, with Toronto, Vancouver and Montréal accounting for 75% of overall visitors and most of this activity taking place during the summer months. There are also challenges stemming from labour shortages, a lack of investment and promotion, and a lack of coordination of tourism policy between all levels of government.

Destination Canada (formerly the Canadian Tourism Commission) is a federal Crown corporation responsible for national tourism marketing and is governed by the Canadian Tourism Commission Act. In 2019, the federal government announced Creating Middle Class Jobs: A Federal Tourism Growth Strategy, which is based on the following three pillars: building tourism in Canada’s communities; attracting investment to the visitor economy; and renewing the focus on public-private collaboration.

Between 2008 and 2020, the federal government invested approximately $1 billion in the tourism industry. In 2021, it announced another $1 billion in funding, including the Tourism Relief Fund.

If international borders continue to reopen and the industry continues its steady overall growth of the recent years prior to the pandemic, it will again contribute to Canada’s economic well-being. And although the United States continues to be Canada’s biggest tourism trading partner, stakeholders might continue their efforts of focusing on more growth-oriented, lucrative emerging markets to better diversify tourism interests to help Canada fulfil its tourism potential.

Read the full text of the HillStudy: Canada’s Tourism Economy

By Dillan Theckedath, Library of Parliament

Categories: Arts, culture and entertainment, Economics and finance, Executive summary

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