By John SchuDlo
Ottawa’s tourism industry says it suffered a heavy blow last month when the federal government announced it would scrap the tourist-friendly visitor rebate program.
The cut to the $78.8 million program – which refunds tourists their GST and HST costs – comes as Ottawa faces a five-year tourism slump.
“It’s really such a shame because we have such a beautiful city here to promote,” says Carole Beck, part owner of Nicholby’s, a souvenir shop on Sparks Street.
Beck says that her store and the other Sparks Street stores have all suffered from declining tourism since 2001.
She says terrorist threats, high gas prices and SARS have repelled many potential tourists from coming to the area.
Beck says the rebate program cut can only do further harm to tourism, but, she adds, it is part of a broader trend.
“(Tourism) is an industry that is very valuable to any city, and any country. Most countries seem to realize that,” she says.
“Canada and Ottawa are very bad in marketing our country and our city.”
Local hotel owners are also concerned with the cut, says Dick Brown, executive director of the Ottawa Gatineau Hotel Association.
Brown says Ottawa’s hotel industry has also skidded over the past few years in the face of declining business visits. He says the recent program cut has area hotels worried.
He says that it makes business six per cent costlier to potential tourists and hurts the local tourism industry’s competitiveness.
Brown says any hit to Canadian tourism will have serious consequences for Ottawa because tourism is the city’s third-largest industry, behind government and the high tech sector.
“Ottawa has no manufacturing economic base,” he says. “Having a strong tourism economy can help mitigate the negative impact when there is a meltdown in the high tech community or the federal government undergoes significant job cuts.”
Pat Bowie, part-owner of Paul’s Boat Lines – a company that gives boat tours in Ottawa, primarily to tourists – says everyone in Ottawa will feel the effects of lost tourism.
“Anything that is going to affect tourism is going to affect us all,” he says. “From the hotels, right down to the restaurants, right down to the guy who is selling hot dogs on the street.”
Jantine Van Kregten, Ottawa Tourism’s communications director, says that no city or country should undervalue tourism’s worth.
“The tourism industry brings benefits like you wouldn’t believe,” says Van Kregten. “Beyond the money that is spent by tourists on their hotels and their transportation and their attending attractions, the job spin-offs are enormous.”
The tourist rebate has given Canada a nice competitive edge, she says. Despite the concerns of local businesses, the Department of Finance reports that less than three per cent of tourists who came to Canada since the program began in 1991 actually applied for the rebate.
The Conservative government has pointed to this low rate as a reason to eliminate the program.
Van Kregten says the government is being short-sighted. She says it cannot overlook people who do apply for the rebate.
The rebate also helps to draw visitors even if the visitors don’t ultimately end up cashing in on it, says Van Kregten
“Just knowing that we could apply to get our GST back has value,” she says.
The hotel association’s Brown says even though the government will save money by axing the rebate program now, lost tourism revenue will outweigh government savings in the long run.
The Tourism Industry Association of Canada is currently lobbying the federal government to rescind their decision.
The association wants a decision before the government actually amends the Excise Tax Act – the act that established the program.
“We are going to do our best,” says Margot Booth, TIAC’s director of communications and public relations.
“Clearly the decision was made in a hasty and ill-informed manner.”
The visitor rebate program is scheduled to be cancelled next April 1.