The province’s decision to eliminate its funding to Ottawa Tourism is a “significant hit” that will force the local marketing organization to make tough spending choices, its leader said Wednesday.
CEO Michael Crockatt told OBJ the $3.4 million in provincial funding the organization was slated to receive this year represents about 15 per cent of the group’s overall budget.
About three-quarters of Ottawa Tourism’s funding comes from a four per cent municipal accommodation tax, with the remainder from city grants and private partners.
Crockatt said his group was informed of the cut on April 12, the day after the provincial budget was announced, and has been putting its programs under the microscope since then.
He said everything from Ottawa Tourism’s mobile phone contracts to its employee travel expenditures are being scrutinized to find potential savings. A plan to redesign the organization’s logo this year has already been put on the back burner, Crockatt added.
“This is a pretty significant hit to us,” he said. “We’ve been doing prudent things and everybody (is) looking carefully at their budgets and their work plans for 2019 and trying to identify places where we can reduce our costs, but not at the cost of our core sales and marketing and destination development activities. We’re trying to focus on those things that will have the least negative impact on our core services that we provide.”
Ottawa Tourism currently has 42 employees. Crockatt would not comment on potential job cuts, adding he’s still hopeful that the province will come up with an alternative funding plan for agencies such as his when it unveils its new tourism strategy in the next few months.
“There will be some things that we won’t be able to get done in 2019 because of this.”
“We believe the story is still being written about this,” he said. “Yes, it hurts right now to have a big piece of our funding taken away, but some time soon they will release their provincial tourism strategy, and we hope and we believe that there’s going to be some positives in there for our industry about the direction that the province wants to go.”
Ottawa Gatineau Hotel Association president Steve Ball, who sits on Ottawa Tourism’s board of directors, said he was expecting the province to reduce its funding to the organization, but the scale of the cuts surprised him.
“I didn’t think we’d be taken right down to the knees,” he said, adding he realizes the province is grappling with a $15-billion deficit. “There will be some things that we won’t be able to get done in 2019 because of this.”
Promoting Shaw Centre, outside regions could be at risk
Ball noted that Ottawa Tourism is “heavily engaged” in marketing the provincially owned Shaw Centre, the city’s largest downtown convention space. He suggested the organization might have to revisit its priorities and focus more on municipally backed tourist attractions and initiatives.
“All I’m saying is we need to analyze all of our current programs and make sure that they’re as efficient and effective as possible,” he said. “We may have to look at just how we support sales and marketing for provincial assets when there’s no funding to support us.”
As part of its mandate as a provincially funded organization, Ottawa Tourism currently helps promote the industry in nearby regions such as Prescott-Russell. Ottawa Tourism vice-president of destination development Catherine Callary said that while marketing rural areas within Ottawa’s boundaries will still be a key priority, promotions beyond its municipal borders might have to be curtailed.
“Without that mandate, without that funding, we have to look at that,” Crockatt said. “What is the appropriateness of using municipal tax money in Ottawa to do marketing activities outside of Ottawa?”
Ball said the cutbacks could have a “silver lining” if they lead to cost efficiencies. He also suggested the cuts could spur the organization to expand its partnerships with private-sector sponsors and pursue new agreements with the federal government.
“Just because the province is stepping back, doesn’t mean there aren’t others that might step up,” he said. “We really haven’t pursued our federal relationships as much, and being in a capital city maybe we should.”
Ottawa Mayor Jim Watson said Wednesday the organization can continue to depend on a “strong” relationship with the city and steady income from the accommodation tax.
“This reliable funding ensures that Ottawa Tourism can continue to deliver successful sales, marketing, and destination development initiatives,” he said in a statement.
Undaunted, Crockatt said he’s keeping his chin up.
“We’re not taking our foot off the gas,” he said. “We will get through this. I’m confident that we’re going to be stronger on the other side of this.”
Provincial counterparts also affected
Ottawa wasn’t the only city affected. The Ontario government cut a total of $17.5 million in tourism funding across the province.
Tourism Toronto said the government told the group its $9.5 million in provincial funding is being cut entirely. That is about a quarter of its budget of just under $40 million, executive vice-president Andrew Weir said Tuesday.
"This will have real implications and we're evaluating now what markets we can no longer promote Toronto in, which major conventions and events we can no longer bring to the city," he said.
"By any objective business metric, this is the time to be aggressive with tourism."
Last year, tourism in Toronto generated about $9 billion in direct spending, Weir said.
Toronto Mayor John Tory said 44 million people visited the city last year to spend their money, but the province gets the tax revenue.
"We don't get a penny of it," he said. "The province is the beneficiary and yet they took a huge sum of money for Toronto and Ottawa, yes, the two biggest tourism centres in the province, and just took it away. I think that's bad for Ontario."
Transitional funding of $3.9 million is being provided this year, but after that, will be eliminated.
After repeated requests to the minister of tourism, culture and sport's office, Michael Tibollo's spokesman provided a funding chart late Tuesday that showed the cuts will hit all 13 regional tourism organizations.
Tourism Northern Ontario will see a cut of nearly $1 million from last year's funding of $4.9 million.
Last year's total funding across the province was $36.6 million.
Tibollo said protecting core services means making difficult decisions.
"I have asked our agencies and partners to work collaboratively with us to find efficiencies and maximize value for taxpayer dollars," he wrote in a statement.
"My staff and I are exploring other alternatives that may help offset these adjustments, as we consider broader initiatives to the tourism industry in developing our new Ontario Tourism Strategy, which will be released in the coming months."
NDP tourism critic Paul Miller called the cuts "destructive" and said they will hurt the province's economy.
"Investing in tourism doesn't cost money – it makes money," Miller said in a statement. "Doug Ford's short-sighted and callous move to completely eliminate provincial funding to Tourism Toronto and Tourism Ottawa will jeopardize the billions of dollars in economic activity that tourism brings in."
The funding decision comes amid a host of other cuts to municipal funding, including to public health, child care, flood management and library services.
– With files from the Canadian Press