Tourism Nova Scotia predicts that in 2020, the province’s tourism revenues will fall 65% to $ 900 million, from $ 2.6 billion in 2019.
With sharp drops in revenue and high fixed costs, many operators are in dire financial straits. Despite this, they have taken extraordinary measures to ensure public health and safety and to meet the needs of customers and visitors with confidence.
The provincial government’s announcement last Friday of a tourism sector funding program, without any consultation with the Tourism Industry Association of Nova Scotia, is one example of what the government should not do.
While we understand the need for businesses to access capital, the limits on this program for many large, medium and small operators who do not meet the threshold are grossly unfair to the industry and Nova Scotia taxpayers. .
With the government suggesting up to $ 15 million in support per applicant, in theory that $ 50 million could support three or four operators.
Since the start of the pandemic, the association has met regularly with the Minister of Business and asked for several supports, including a strategic approach that would best position the sector for recovery. We’ve been waiting for a response for months, and Friday’s announcement does nothing to address the immediate concerns of the majority of the province’s tourism operators.
With the limited criteria described and the specific eligible sectors, it appears that the government and Dalhousie University have already decided on who they think are the “winners”. It now appears that while TIANS pursued a “Nova Scotia First” program, a parallel process was underway that undermined a large stimulus program for the sector.
Why was Dalhousie University chosen to decide what will work best for Nova Scotia’s tourism industry in the first place? The government has a business department and crown corporations that are constantly involved in loan programs.
The money was announced in July by the province and it took Dalhousie almost three months to figure out a program, without consultation with the industry. Announcing a $ 50 million loan guarantee program on a Friday and completing the application process in just seven days is unheard of. How fast can you commit $ 50 million?
TIANS has been a strong advocate for a holistic and informed approach to supporting an industry that employs over 40,000 people and touches every community in the province. The sector generates $ 300 million in tax revenue for the government to support investments in the province’s health, education and infrastructure.
Property tax assessments are a major financial burden that will lead to future business closings. Provincial coordination with municipalities to alleviate this problem would have been a practical and positive solution.
The need for a provincial travel incentive program, which TIANS urged in early summer, would have resulted in increased tax revenue for the government at very little cost.
A confidence campaign and policy adjustments to support business growth are some of the demands the association has brought forward for consideration.
The tourism industry is facing catastrophic losses, and the development of a loan guarantee program for specific businesses (resort operators, excursions, tourist transport and tourism) that generate more than 10 millions of dollars a year does a disservice to over 95% of the industry that does not qualify. . If loan guarantees as a measure to reduce financing costs are a policy option, then it should apply fairly to the industry as a whole, and not just to a very limited number of companies.
As the industry understands what might be available, the application process will be closed. Tourism is at the center of the pandemic and will be at the center of the recovery. We understand that the government cannot fix everything; that’s why every decision counts and policy adjustments to mitigate the harshest costs would have been much more effective.
The provincial government’s decision to support a program that does not serve the sector as a whole goes beyond bad public policy, not the vote of confidence or leadership that tourism sought. Maybe in light of the extraordinary times we live in, it’s time to start doing business differently – maybe 50 million reasons why.
Darlene Grant Fiander is President of the Tourism Industry Association of Nova Scotia.
