Budget 2023: Billions for improving air travel experience, but no direct support for travel advisors

Finance Minister Chrystia Freeland tabled the federal budget on Tuesday (March 28), unveiling continued deficit spending aimed at making life more affordable, a clean economy and ensuring Canadians have nice teeth (a national dental care program).

Freeland's fiscal plan projects the deficit will be $40.1 billion in 2023-24 — almost $10 billion more than she projected last fall.

The budget outlined the Liberals' plan to "do big things.”

This includes a doubling of the GST rebate for low-income Canadians, dental care for families earning less than $90K, tax credits to promote investments in green tech, programs for addressing the opioid crisis and initiatives that make life easier on wallets, such as a "grocery rebate.”

The Liberals also announced that it has negotiated a 27 per cent reduction in the interchange fees Visa and Mastercard charge small businesses, which it says will save eligible small businesses in Canada roughly $1 billion over five years.

Travel & tourism 

What's in store for travel and tourism? If anything, the federal government, as part of a suite of cost-saving initiatives, is instructing staff to travel less. 

However, Ottawa is proposing a multi-year investment to support the development of local tourism projects and events. 

This includes $108 million over three years to support communities, small businesses, and non-profit organizations in developing local projects and events.

Destination Canada will receive $50 million over three years to attract major international conventions, conferences, and events to Canada. Money will also go towards funding local arts and National Museums. 

$1.8 billion, paid over five years, has been earmarked for the Canadian Air Transport Security Authority (CATSA) to increase its level of service, improve screening wait times, and strengthen security measures at airports.

This will come at a cost for consumers, however. As pointed out by CBC News, the Air Travel Security Charge is set to increase by almost 33 per cent next year, which brings the added fee on a one-way ticket within Canada to $9.94, on a flight to the U.S. to $16.89, and on a trip overseas to $34.42.

It funds airport services like passenger screening and baggage handling.

The budget proposes to amend the Canada Transportation Act to require the sharing and reporting of data by airports and air carriers. 

"This will help to reduce delays and improve coordination between airports, airlines, and CATSA," the document reads.

The document also proposes to provide $5.2 million over five years to Transport Canada to collect and analyze air sector performance data.

Eligibility for the Electronic Travel Authorization Program to low-risk, trusted travellers will also be expanded to include more countries, which will be announced in the coming weeks.

“Discouraged but not surprised”

It was a different tone compared to 2022 as Canada's economic situation, over the past 12 months, has improved as the threat of COVID-19 weakens.

It was around this time last year that Minister Freeland proclaimed “the time for extraordinary COVID support is over.”

Travel agents and agencies were among the hardest-hit during the darkest days of the pandemic when travel restrictions brought the travel industry to a near-shutdown for a prolonged period of time.

This is one reason why the Association of Canadian Travel Agencies (ACTA) is discouraged by Tuesday’s budget reveal.

“Discouraged but not surprised” – ACTA’s words, as noted in a press release – “as all indications leading up to the budget were that it would be an austerity budget based on the current economic environment and the massive relief expenditures during the pandemic.”

ACTA is concerned that there are ongoing “critical issues” that still affect travel agencies and travel advisors, such as debt relief from pandemic support.

READ MORE: Labour support & loan forgiveness: What ACTA is seeking from Ottawa in Budget 2023

During the pandemic, Ottawa’s leading federal aid programs, such as the CEBA, CERS, CEWS and RRRF, excluded many small businesses.

Independent travel advisors (ITAs), in particular, didn’t receive the same level of support as storefront travel agencies, who were able to use wage and rent subsidies to stay afloat.

While the travel industry’s recovery is well underway – many agents today can’t keep up with the number of inquiries they’re receiving – it still takes several months for travel advisors to see the financials, simply based on the length of time it takes to get paid.

ACTA, as well as the Association of Canadian Independent Travel Advisors (ACITA), spent months putting pressure on Ottawa to protect travel agencies and independent travel agents with sector-specific support. 

But no additional federal support – for ITAs especially – materialized.

Last October, ACTA’s pre-budget consultation paper to the Finance Committee noted several priorities, including labour support, allocated funding for hard-hit businesses (like travel agents and agencies), loan forgiveness, increased investments in travel and tourism research services, as well as the implementation of a federal policy to protect travel agent commissions in all future airline support programs. 

ACTA, on Tuesday, said it will continue to “lay the groundwork for debt relief” and ramp up grassroots advocacy efforts “at the appropriate time.”

It will also be conducting a closer review of the budget to identify any other items that are maybe not top of mind “but still could provide some relief or opportunity.”

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