The Liberals’ 2021 budget is about “providing support where COVID has struck hardest — to women, to young people, to low-wage workers, and to small and medium-sized businesses, especially in hospitality and tourism,” Deputy Prime Minister and Finance Minister Chrystia Freeland said in the House of Commons on Monday (April 19).
That set the tone for where the Liberals will invest some serious coin as Freeland, presenting Canada’s first federal budget in two years, outlined major investments for Canadians, including a national child-care plan, increasing the federal minimum wage and green initiatives.
But the Finance Minister’s presentation late Monday – Freeland’s first budget and one that promises to guide Canadians through the COVID-19 pandemic – just barely scratched the surface on where Ottawa plans to spend cash in the coming years.
The 2021 budget document itself is humungous – 739 pages, in fact – and covers a wide range of initiatives, causes and industries, totalling $101.4B in new spending.
Readers in PAX land, however, may be wondering what Ottawa has set aside for Canada's struggling travel and tourism industries – Freeland, after all, gave the sector a shout-out in the House – so we’ve plucked out some key bits.
$82.5M for Transport Canada
All in, the Liberals will provide $1.5B in support of Canada’s travel and tourism sector, allocating $1B for tourism and $465M for air travel and airports.
The includes $82.5M for Transport Canada to help Canadian airports invest in COVID testing infrastructure and $105.3M over five years to integrate touchless and secure air travel technology.
The Canadian Air Transport Security Authority will also receive $6.7M to purchase sanitization equipment.
Canada’s airports are particularly hard hit given that travel, due to the pandemic, has plummeted to 10 per cent of normal levels – a reality that has resulted in roughly $5.5B in lost revenue and may result in $2.8B in debt by 2021’s end, says the Canadian Airport Council.
“More work required”
In a statement Monday night, the National Airlines Council of Canada (NACC) which represents Air Canada, Air Transat, Jazz Aviation and WestJet, welcomed the new spending, but cautioned that more work still remains to address the devastating impact of COVID-19.
“The budget has taken steps to assist the sector during the immediate crisis. But more work is required, in particular the development of a safe restart plan for aviation and international travel, if we are to restore the hundreds of thousands of Canadian jobs that are supported by the sector and facilitate the economic recovery of communities across every region of Canada,” said Mike McNaney, president and CEO of the NACC in a statement on Monday night (April 19).
The 2021 budget extends to local tourism sectors, too, earmarking $500M for a tourism relief fund to help regional agencies and another $100M for Destination Canada for promoting domestic travel.
The budget also set aside $200M for major festivals, $200M for community cultural events, and $300M for the arts, cultural and sports sectors.
"Lack of a plan" for travel advisors
Freeland announcing an extension of the wage and rent subsidy programs until Sept. 25, 2021, will certainly come as good news to some travel agency and business owners.
Another possible win is the Canada Recovery Hiring Program, which will provide $595M to small and medium-sized businesses so they can hire back laid-off workers or bring on new ones.
But sticking out like a sore thumb in the budget are changes to the Canada Recovery Benefit (CRB), which will remain in place through Sept. 25 and extend to an additional 12 weeks of benefits, but go down to $300/week after July 17.
Judith Coates, co-founder of the Association of Canadian Independent Travel Advisors (ACITA), which fights on behalf of home-based and self-employed agents, said she nearly “fell off her chair” when she heard this.
"We've barely been able to make the $500 a week stretch to pay our rent, put food on our tables, and pay our business expenses," Coates told PAX.
"With the strictest lockdowns in place until May 20th, how can we expect the economy to fully reopen in the summer?"
"And due to the unique revenue model of travel advisors (we don't get paid until the customer travels), we do not realistically see any financial recovery until the end of December at the earliest, or more realistically until May of 2022."
ACITA's Brenda Slater called the CRB "our lifeline" and that its reduction is "going to push more of us out of the industry."
"Certainly, there seemed to be a lack of a plan to financially support the retail and independent travel industry,” Slater said.
ACITA's Nancy Wilson noted that travel advisors have been hardest hit – “We are small businesses, we are tourism, and a majority of us are women,” she said. “To reduce the CRB, without offering separate sector specific-aid is negligible.”
Wendy Paradis, president of the Association of Canadian Travel Agencies (ACTA), says the industry will need extended support through to the end of the year "or until restrictions on travel are lifted."
ACTA’s recent survey of more than 1,000 travel agents revealed that 75 per cent would not survive without continued aid until the end of the year.
Paradis said ACTA will be taking time to review the budget to "understand changes to the government programs noting initial concerns with the decline in the maximum base and top-up levels beginning in July."
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