Government of Canada Economic Update - Positive measures for tourism, but important needs remain unaddressed

QUÉBEC CITY, Dec. 2, 2020 /CNW Telbec/ - The Conférence économique de l'industrie du touristique du Québec is taking note of the measures announced by the Honorable Chrystia Freeland, Deputy Prime Minister and Minister of Finance of Canada, in the federal government's economic statement released yesterday. The organization recognizes that some positive steps were taken, notably recognition that sector-specific support is essential for the tourism sector.

The Conférence previously formulated the following key recommendations:

1. Increase and extend the Canadian Emergency Wage Subsidy (CEWS).
   
   
2. Provide support for fixed costs and, consequently, for cash flow.

However, the Conférence also points out there is a lot of work that still needs to be done. Indeed, sizeable elements are still missing to allow key tourism-sector businesses and seasonal businesses to meet their most fundamental needs.

« To allow the tourism sector to stay on its feet, it is necessary to allow businesses that have a multiplier effect on the economy to keep going, as they are strategic and economic assets for the industry. Those businesses are the ones that create the most jobs. Programs must also take into account the seasonal realities of many small and medium-sized businesses. All of this is fundamental to maintaining viable offerings in the tourism sector, and thus for the vitality of regions in Québec and elsewhere in Canada," says Mr. Raymond Bachand, strategic counsel and president of the Conférence.

The Conférence welcomes:

• The raising of the maximum rate of the wage subsidy program to 75% for the next three periods, or more specifically until March 13, 2021;
  
  
• The extension of the application of current rates of the Canada Emergency Rent Subsidy until March 13, 2021, to reduce uncertainty for businesses;
  
  
• The additional 500 M$ in financing granted to regional development agencies to financially support local businesses that don't have access to other forms of support from the federal government.

As well as:

• The expected specific support for festivals, events and the arts.

« The new Canadian Emergency Rent Subsidy, which includes support for fixed costs, is good news, in and of itself. However, the government needs to recognize the seasonal character of tourism when establishing support levels and, on the other hand, that the proposed support for fixed costs is insufficient for these businesses that are our strategic assets," adds Mr. Bachand.

Businesses can't keep adding to their debt load

The prolonged nature of the current crisis is making the hardest hit businesses even more fragile. These businesses will most likely need to keep paying their fixed costs with extremely limited if not nonexistent revenue until the summer months.

Today, with the Highly Affected Sectors Credit Availability Program, what the government is offering is more loans for Québec businesses who are hitting the limits of their borrowing capacity. "Business owners are proud people who don't mind taking risks, but with this crisis that just keeps on going, what they are looking for is direct support from their government, a boost that can help them pull through," explains Mr. Bachand.

Governments have concurred that the tourism industry is at high risk of simply falling apart, something that would generate significant and permanent damage, potentially nullifying efforts for recovery. More specific, targeted action Is required to avoid the worst-case scenario. "We are going to pursue ongoing discussions with the governments of Canada and Québec so that they put forward the complementary support needed to ensure that these businesses, with their structural significance for regional economies, can make it until next summer," he concludes.

About the Conférence économique de l'industrie touristique Québécoise
The Conférence is a committee of business leaders with a deep understanding of regional and industry challenges, and of the realities that large and small businesses face within the tourism sector. Together, they bring a substantial experience of the Que?bec tourism sector and complementary skills from their own individual areas of expertise. Based on data, industry insight and economic analysis, the Confe?rence's role is to generate dialogue about the main issues identified by Que?bec tourism associations and businesses, notably the state of the business environment and the impact of public policy on the industry; to analyze success factors that will help improve it and; to recommend the best strategies that can maximize windfall for Que?bec in its entirety.

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SOURCE Conférence économique de l'industrie touristique québécoise