Feds' budget boost to domestic tourism expected to be boon for Ottawa

Parliament Hill at night

Staring at more than a billion dollars in projected lost visitor spending in 2021, Ottawa’s beleaguered tourism industry is hoping to get a much-needed lift from new funding announced in Monday’s federal budget.

Ottawa Tourism CEO Michael Crockatt said he sees the $1 billion in new spending earmarked for the pandemic-battered sector across Canada as a “really positive” sign that the feds understand the economic importance of the industry.

“I don’t think we’ve ever heard a finance minister specifically talk about tourism in the first two minutes of presenting a budget,” he said, adding tourism has been among the industries hit hardest by COVID-19 and might take the longest to recover.

“It’s not likely going to be a full economic recovery until the tourism industry recovers,” Crockatt told OBJ on Tuesday. “It employs so many people and there’s so many companies involved in it that it needs to recover to be part of that stronger Canadian economy.”

While the feds have yet to provide a detailed breakdown of how the $1 billion will be allocated, Crockatt said he was especially heartened to hear about the $100 million in new funding for Destination Canada to urge Canadians to hit the road and explore their own country once it’s safe to do so.

About 90 per cent of the capital’s visitors come from inside the country’s own borders, and Crockatt said the domestic market will likely be the first to bounce back post-COVID.

"All of that economic activity is just gone, and we can’t just get it back overnight."

“I’m confident that we will be in a good position to get our market share of Canadian travellers,” he said.

But when exactly that happens remains to be seen, and Crockatt doesn’t think the local industry will be back on solid footing for a while yet. Ottawa Tourism is forecasting that the city will miss out on $1.2 billion in visitor spending this year on top of the $1.4 billion it lost in 2020.

“All of that economic activity is just gone, and we can’t just get it back overnight,” Crockatt said.

“The impact has been longer and deeper even than we thought just a few months ago. This sector is different from most of the rest of the economy, and it will probably need more help and will need help longer than other parts of the economy.”

The city’s top tourism marketing executive said he’s still waiting to learn more details about some of the other programs announced in Monday’s budget, including a $500-million relief fund aimed at helping regional tourism agencies rebuild the sector once the pandemic abates.

Critical subsidy programs extended

Meanwhile, Crockatt said the extension of federal wage and rent subsidy programs to the end of September will be a life-saver for many struggling enterprises. 

“Those are so critical for so many businesses in the tourism sector,” he said. 

Crockatt said some tourist destinations will rebound quicker than others. He says major cities such as Ottawa are “disproportionately impacted” by the loss of meeting and convention business, a segment of the industry he fears will take the better part of a decade to fully recover.

“That will impact cities like Ottawa much more than it will impact smaller communities or rural areas,” he said. “We might feel the effects of that for the next 10 years.”

Maria Rasouli, owner of Ottawa-based Escape Bicycle Tours & Rentals, said she’s thankful the budget included extended wage and rent relief for small businesses. 

Rasouli said her revenues have shrivelled to virtually nothing during the latest stay-at-home order, and she doesn’t foresee things getting much better in the near future.

$200M to support festivals

“Before, we used to wish for good weather, but now really good weather doesn’t do anything with all the restrictions,” she said. “I think this year is going to be worse than last year. Hopefully, we get out of this third wave sooner than later.”

The feds’ $1-billion tourism package also includes $200 million to support major arts and music festivals such as Bluesfest and the Ottawa Jazz Festival and another $200 million for smaller local events such as county fairs.

Bluesfest executive director Mark Monahan called the new funding a “crucial step” toward getting the festival sector back on its feet.

“Immediate relief is definitely needed, and we are encouraged to see that the plan includes longer-term relief as well,” Monahan said in a news release Tuesday afternoon. “This funding boost will go a long way to bringing about a brighter future for the industry and help us to come back bigger and better.”

Crockatt said Ottawans can do their part to help jumpstart the industry when the time is right. His agency has calculated that if all of the city’s 400,000 households were to invite a pair of visitors to stay with family and friends once restrictions ease, it would pump as much as $500 million into the local economy.

“It’s an incredible economic impact that locals can have just by inviting friends and family to come to visit,” he said. “There are things that we can all do to help.”