Tourism Industry Association of PEI: Pre-Budget 2019-A presentation to the Finance Minister The Honorable Heath MacDonald
Priorities of the PEI Tourism Industry for Budget 2019:
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 both 2017 and 2018 saw our industry surpass 1,000, 000 overnight stays. Forecasts are predicting visitation of 1,578,400 and revenues of $486.2 million for 2018. 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) will be well within reach by 2021. 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:
*Provincially mandate an Island-wide tourism levy and use the funds to augment marketing and product development dollars. These funds must not take the place of provincial funding, but rather add to the total marketing effort.
*Increase support and sustained funding for tourism specific HR training initiatives, wage subsidies, shoulder season extension programs, etc.
* Increase Product Development funding. The past 4 – 5 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 businesses 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 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. On April 1, 2019, minimum wage will move from $11.55 per hour to $12.25 per hour, continuing to be in line with most Canadian Provinces and Territories.
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 rose again in 2018 to $9,160. 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.
*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.
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 forecasts that growth rates for PEI in 2019 will be comparable to national growth rates of 2.2% for visitation and 5.3% on revenue. 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 2019 budget and those in the years to come will reflect that support.
Respectfully submitted by,
Kevin Mouflier – CEO, Tourism Industry Association of PEI