Pre-Budget 2018
TOURISM INDUSTRY ASSOCIATION OF PEI PRE-BUDGET 2018
A Presentation to the Finance Minister
The Honorable Heath MacDonald
January 2018
Priorities of the PEI Tourism Industry for Budget 2018:
The tourism industry on PEI is a significant contributor to the economy of Prince Edward Island. We have had 4 years of continuous and record setting growth and 2017 saw our industry surpass 1,000, 000 overnight stays and forecasts are predicting visitation of 1,559,184 and revenues of $447.1 million. This translates to roughly $67 million in tax revenues for our Province which assists in funding many of our Province’s priorities for health care, education and other important initiatives. Continuing to capitalize on the momentum we have created requires increased, sustained investment to effectively market PEI as a destination of choice and continue the growth of visitation and revenues. Your Government’s support will be vital to this effort and allow the hard work of our industry members to continue contributing significantly to a prosperous PEI economy.
The recommendations outlined in our Vision 2021Provincial Strategy for Tourism are currently being implemented with good success. The larger, flagship initiatives such as a Coastal Circuit will need to be endorsed and supported by all levels of Government and tourism industry partners/operators in order to be fully realized.
Other specific recommendations to benefit tourism include the following:
*Mandate a tourism levy and use the funds to augment marketing and product development dollars. These funds will not take the place of provincial funding, but rather add to the total.
*Increase support and sustained funding for tourism specific HR initiatives including training, wage subsidies, shoulder season extension programs, etc.
* Increase Product Development funding. New and rejuvenated product equals increased visitation and revenues.
*Programs and supports to engage and integrate new businesses owners who are Newcomers to Canada is a strong priority for our industry. Training, education and mentorship are required to assist these new owners adapt to regulations, requirements and customer service expectations. The number of tourism businesses now being run by Newcomers is growing rapidly and, in order to maintain service level standards and ensure excellence in customer satisfaction, we need to work closely with these companies. We currently work with both the PEI Newcomers’ Association and PEI Connectors but much more is needed to ensure our industry’s reputation for quality is maintained.
*TIAPEI continues to strongly support aligning any future increases to minimum wage with the CPI. PEI currently has the highest minimum wage in eastern Canada and we contend that a significant increase to the Basic Personal Tax Exemption would prove to be a much stronger method of improving the lives and financial well-being of lower income workers. Between May 1, 2008 and April1, 2018 the minimum wage rose from $7.75 per hour to $11.55 per hour with no distinctive change to the financial position of low income workers. The minimum wage in PEI is in line with the rest of Canada.
The same most certainly cannot be said of the PEI Basic Personal Tax Exemption which is not only the lowest in Atlantic Canada but far behind the rest of the country. In 2017 PEI’s exemption rose 2% from $8,000 to $8,160. Last week in Nova Scotia a significant change was announced for 2018. The exemption for people with incomes of $25,000 and under increases from $8,481 to $11,481, earners with incomes of $25,000 – $75,000 will be eligible to claim slightly less and over $75,000 there will be no change from the $8,481 amount. This measure provides direct tax relief to those who need it the most and we would strongly urge the Province of PEI to enact a similar measure. In many cases, minimum wage increases only serve to change taxable income levels. True change will only come when the Basic Personal Tax Exemption on PEI rises to an amount in alignment with the other provinces in Canada and allows more money to stay in the hands of those who need it the most.
*Reduce overhead costs for SMEs (fees, licensing, energy costs, etc.). Strong marketing campaigns, well trained, qualified staff and fresh tourism product will result in increased visitation and higher consumer spending. Savings on overhead costs allows for more available funds which business owners can re-invest in their properties.
* Continue efforts to reduce duplication of services and overhead costs within all departments. Whenever possible, bulk purchasing for high budget departments such as health, education and transportation and public works should be a priority.
* Lastly, while it is not necessarily the responsibility of the Province of PEI, the ferry service is an essential link in the success of businesses and industries in eastern PEI and beyond. The disruption to services experienced in 2016 negatively impacted all industries and similar situations in the future must be avoided at all costs. The Province must continue to be seen as taking a strong leadership role in the continuity and sustainability of the ferry service through proactive negotiation and communication with the Federal Government to ensure this vital link is maintained and protected.
Conclusion:
A strong and vibrant tourism industry is a key contributor to a healthy economy for Prince Edward Island. During the past four years our hardworking operators have displayed dedication, determination and innovation with record breaking results. Our industry has never been stronger but we need the backing of the Government to continue the forward momentum we have created. It is our hope that the 2018 budget and those in the years to come will reflect that support.
Respectfully submitted by,
Kevin Mouflier – CEO, Tourism Industry Association of PEI
