Travel Webcast

ACTA Survey Results Help Fill In The Gaps

ACTA has released results of a membership survey designed to gather information on travel agency access to the current government financial aid programs.

The association had been aware that some of its members hadn’t been successful in accessing the programs and results from the survey confirm that view.

ACTA’s survey substantiated its concerns, allowing it to provide the government with definite examples of the shortfalls of the aid programs for the travel agency sector.

Wendy Paradis, president of ACTA, said: “We had anecdotal information that not all members qualified or were able to access financial relief from the government programs but we needed data to back up our claims in our lobbying efforts with the government. This survey has given us what we need to go back and demonstrate where the gaps are.”

Highlights of the survey include:

  • The 75% Canada Emergency Wage Subsidy (CEWS) – Approximately 52% of respondents applied with 100% of travel agencies being approved and already in receipt of funds or waiting receipt. 37% did not apply with the primary reason being their ineligibility with no salaried employees.
  • Canada Emergency Business Application (CEBA) – 68% of respondents applied and 98% of the applicants received assistance from the program. 28% did not apply as they did not meet the eligibility requirements for the program. Reasons cited by members included they did not meet the $20K payroll threshold or they were paid with dividends.
  • EDC/BDC Loans – Very few participants applied for the EDC Loan Guarantee and BDC Co-Lending Term Loans at 3% and 7% respectively. Respondents that chose not to apply for these loans also claimed they did not qualify or they were reluctant to take on more debt that was not forgivable.
  • RDA Loans – The Regional Development Agency loans opened within the last two weeks, which could be reflective in the low application rate of respondents at 3%.
  • Tax Deferral Initiatives – To date, 51% of respondents claimed to have or will be taking advantage of the GST/HST tax deferral. While not identified in the survey, some Members have reported to ACTA that they do not pay GST/HST as they have not yet made the $30,000 threshold to require a GST/HST number. This could explain why some respondents have not taken advantage of this initiative. With the Income Tax Deferral initiative, 34% have taken advantage. 66% have not, however this may be timing and not indicative of interest in doing so.
  • Canada Emergency Commercial Rent Assistance – When asked whether the member has worked with their landlord to benefit from the program, 48% had those discussions with 62% of the respondents stating that their landlord was either not interested or uncertain.
  • Work-Sharing – The majority of respondents, 84%, did not apply for the Work-Sharing program. Many cited how cumbersome the process was and instead, opted for the wage subsidy program. The remaining either applied (9% with 89% of those respondents stating their applications were approved) or plan to apply (7%) when the wage subsidy program expires.

The survey also provided ACTA with additional intelligence, with its members emphasizing that because the travel industry will experience a much longer lag in recovery compared with other industries, it will require an extension of the wage subsidy to the end of 2020, as a much-needed lifeline.

ACTA noted that it’s pleased that the wage subsidy program has been extended until the end of August, but it will continue to advocate for an extension of the program for travel agencies to year end.

It also applauded the expansion of the CEBA program which will now capture sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family owned corporations that pay employees through dividends rather than payroll.

The association points out that one of the expanded eligibility criteria includes the need for applicants to have non-deferrable expenses (rent, property taxes, utilities, and insurance) between $40,000 and $1.5 million.

ACTA lobbied government for changes to the program, with the hope that the 28% that did not apply due to ineligibility and as highlighted in the survey results, can now access this program.

Another noticeable theme under the Commercial Rent program, was the claim by members that their landlord did not qualify for the program because they did not have a mortgage. According to the Canada Mortgage and Housing Corporation (CMHC) who administers the program on behalf of the federal, provincial and territorial governments, landlords with no mortgages are eligible to apply. Members are encouraged to speak to their landlords clarifying this eligibility criteria.

However, ACTA says that the CECRA program is not without its flaws. Landlords are not interested in absorbing 25% of the rent. ACTA’s recommendation to the federal government, and working with the provincial and territorial governments, is to make the program available directly to the tenant, rather than rely on the willingness of the landlord.

Finally, ACTA is continuing to advocate for the extension of the Canadian Emergency Relief Benefit (CERB) program for travel agents beyond 16 weeks, as this is one program that has benefited both travel agent employees and independent travel agents.

Go to www.acta.ca for more.

Posted in COVID-19, News, Tourism Organizations, Travel Agents, Trends & Research

 

 

Categories