TIAPEI Pre-Budget 2020: A presentation to the Finance Minister The Honorable Darlene Compton
Priorities of the PEI Tourism Industry for Budget 2020:
The tourism industry on PEI is a significant contributor to the economy of Prince Edward Island. We have had 5 years of continuous and record setting growth and we have surpassed 1,000,000 overnight stays for the last 3 consecutive years. Forecasts are predicting visitation of 1,602,600 and revenues of $505.7 million for 2019. This translates to millions 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 maintain the growth of visitation and revenues. Your Government’s support will be vital to this effort and will allow the hard work of our industry members to continue contributing significantly to a prosperous PEI economy.
The recommendations outlined in our Vision 2021 Provincial Strategy for Tourism continue to be further implemented with good success. It is our belief that the projected progressive targets for visitation (1.75 million visitors) and revenues ($510 million) are well within reach by 2021. Consultation has begun for the development of Charting the Future: A Strategy to Accelerate Prince Edward Island Tourism Growth to 2025. There have been great strides made in implementation by private enterprise initiative and expansion, strategic partnerships and government supports but we cannot afford to relax our efforts to continue moving forward. Government assistance and supports will continue to play an important role in our industry’s continuing success.
Specific recommendations to benefit tourism should include the following:
*In today’s technologically advanced world, businesses and travelers alike depend on reliable and affordable high-speed internet connections. On PEI there are far too many areas within the province that have inadequate, unreliable and very costly broadband coverage despite several years and millions of dollars invested in solving this issue. We are a very small geographical area and this service needs to be available to all regions as quickly as possible. Businesses need the internet to be affordable and function efficiently and our visitors expect it.
*The housing crisis has had a tremendous impact on Islanders and the tourism industry workforce has not been exempt from the shortage of available affordable housing. Businesses will be negatively affected if suitable employees are unable to find housing within a reasonable radius of the workplace at an affordable rent rate. We would urge Government to continue the important task of supporting initiatives to address the housing crisis.
*Increase support and sustained funding for tourism specific HR training initiatives, wage subsidies, shoulder season extension programs, etc.
* Increase Product Development funding. The past number of years have shown clearly that new and rejuvenated product equals increased visitation and revenues. Expansion of festivals, events and activities running into the shoulder season have been helping to extend the tourism season and there is still much that can be done to continue this growth. Government assistance with some of these ventures helps to alleviate the difficulties encountered in operating outside the peak season, such as staffing and marketing.
*Programs and supports to engage and integrate new business owners 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 individuals as well as other new companies and owners. We currently work with the PEI Newcomers’ Association, PEI Connectors, the Chamber of Commerce and other organizations 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. Between 2017 and 2020 the minimum wage rose from $11.25 per hour to $12.85 per hour with no distinctive change to the financial position of low-income workers. In 2019, the average minimum wage in Canada was $12.76 per hour which places PEI’s rate just slightly higher than the national average.
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 and again in 2018 to $9,160. In 2020 the exemption rose to $10,000. 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.
* Continue efforts to reduce overhead costs for SMEs (fees, licensing, energy costs, etc.) and create a more competitive tax environment. Strong marketing campaigns, well trained, qualified staff and fresh tourism product will result in increased visitation and higher consumer spending. Savings on business taxes and overhead costs allows for more available funds which business owners can re-invest in their properties. It is estimated that 85% of tourism operations on PEI are small businesses. In 2019 the small business tax rate decreased by 0.5% to 3%. This was certainly a welcome announcement, but we strongly encourage Government to continue efforts to reduce the burden on small businesses.
A strong and vibrant tourism industry is a vital contributor to a healthy economy for Prince Edward Island. PEI’s tourism industry represents a GDP contribution much higher than the national level and has held this rate for many years. During the past five years our hardworking operators have displayed dedication, determination and innovation with record breaking results. The Conference Board of Canada noted Prince Edward Island continues to outpace growth in the national economy—for the fifth year in a row. The tourism 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 2020 budget and those in the years to come will reflect that support.
Respectfully submitted by,
Kevin Mouflier – CEO, Tourism Industry Association of PEI