The Canadian government last month announced a proposed amendment to the Excise Tax Act that would discontinue the GST (goods and services tax) rebate program effective April 1, 2007. Spending restraint has been cited as the reason for the proposed cut.
The issue must be voted on before becoming law. A time frame for a vote is unclear, but Canadian tourism officials were quick to criticize it.
"This instantly makes Canada six percent more expensive," said Ray LeBlond, director of corporate communications for Tourism British Columbia. "And there are tourism businesses with prices in the marketplace that can't be changed, so they will have to absorb that cost."
"Pricing and brochures for next summer are out," so an 18-month time frame would have been more appropriate, added Randy Williams, CEO of the Tourism Industry Association of Canada.
The GST rebate enables non-resident meeting planners who hold meetings in Canada to recoup certain expenses. Contracts signed prior to the Sept. 25 announcement will still be eligible for the rebate.
"I think it's going to hurt Canada more than help it," said Steven Ledewitz, owner of Cajun Group & Convention Travel in Boynton Beach, FL. The amendment proposal was a deal breaker for one client.
"We had talked about finally doing an out-of-country event and decided that Canada would be easiest," said Ledewitz. There were issues concerning shipping trade-show materials, yet the client was willing to work around such challenges, he continued. However, "Once the savings became non-existent, the hassle became significant. When I told the group [about the amendment], that was the end of it."
Added Daphne Meyers, an independent planner with the Red Barn Group in Durbin, ND, "When comparing a Canadian city to a U.S. destination, it's going to have more barriers now, and more hassle without an economic return. It is more work to take a meeting international, but it's worth it if you can lay out an attractive financial picture," she said.
Canadian tourism officials aren't conceding defeat. "We haven't given up the fight," said LeBlond. "We think the government could benefit from more information on how this impacts tourism."
Williams concurred, saying, "We believe the government doesn't fully understand the tourism industry." And the effect could be exacerbated with the changes in passport regulations for Americans under the Western Hemisphere Travel Initiative.
"It's death by a thousand cuts," remarked Williams.
Contact Kinley Levack at [email protected]For ideas, tips, and tools for better meetings and events,
get MeetingNews' weekly e-newsletter to your inbox.