Industry Reacts To 2023 Federal Budget

ACTA says that it was ‘discouraged,’ but it wasn’t ‘surprised’ by the March 23, 2023 federal budget, observing that “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.”

However, ACTA said that it’s “concerned that there are ongoing critical issues that affect travel agencies and travel advisors — especially debt relief from pandemic support. And it makes it clear that it will continue “to lay the groundwork for debt relief and ramp up grassroots advocacy efforts at the appropriate time.”

ACTA said that it will also be conducting a thorough review of the budget in the coming days to identify any other items that are perhaps not top of mind but still could provide some relief– or opportunity.

TIAC Pleased

The Tourism Industry Association of Canada (TIAC) said that it was pleased that the federal budget announced ‘the first modest building blocks’ of the government’s new Federal Tourism Growth Strategy.

TIAC said that Budget 2023 also confirmed the federal government will present a new Federal Tourism Growth Strategy to chart a course for growth, investment and stability in Canada’s tourism sector.

Specifically, TIAC said that it applauded the budget announcement to invest:

• $108 million over 3 years, starting in 2023-2024, to the Regional Development Agencies to support communities, small businesses, and non-profit organizations in developing local projects and events.
• $50 million over 3 years, starting in 2023-2024, to Destination Canada to attraction major international conventions, conferences and events to Canada.

There are several other measures included in Budget 2023 that impact our sector and our members. We will assess the implications of these announcements as soon as possible. TIAC looks forward to the release of the new Federal Tourism Growth Strategy.

TIAO Comments

The Travel Industry Association of Ontario (TIAO) said that it will be doing a a thorough analysis in the coming days.

For now, key highlights include a multi-year investment in destination marketing to attract major international conventions, conferences, and events to Canada; a multi-year investment to support the development of local tourism projects and events; and cutting the planned increase of the federal beverage alcohol tax from 6% to 2%.

TIAO pointed to a number of budget items of note to the industry, including:

• A new Federal Tourism Growth Strategy to chart a course for growth, investment, and stability in Canada’s tourism sector.
• $108 million over 3 years, on a cash basis, starting in 2023-24, to the Regional Development Agencies to support communities, small businesses, and non-profit organizations in developing local projects and events.
• $50 million over 3 years, on a cash basis, starting in 2023-24, to Destination Canada to attract major international conventions, conferences, and events to Canada.
• Cutting the planned increase of the federal excise tax on beverage alcohol from 6% to 2%
• Extending the Seasonal Employment Insurance support that provides up to five additional weeks for seasonal workers in 13 economic regions, until October 2024.
• $14 million over two years for the Department of Canadian Heritage to support the Building Communities through Arts and Heritage program which supports local artists, artisans, and heritage performers through festivals, events, and projects, including Indigenous cultural celebrations and the celebration of 2SLGBTQI communities.
• National Museums – funding for six of Canada’s national museums (the Canadian Museum of Nature, the Canadian Museum of History, the Canadian Museum for Human Rights, the National Gallery of Canada, the National Museum of Science and Technology, and the Canadian Museum of Immigration at Pier 21) and the National Battlefields Commission.

Small Businesses

• Lower credit card transactional fees for small businesses up to 27% (eligible small businesses in Canada will save approximately $1 billion over five years).

TIAO also noted that the federal budget also included:

• $1.8 billion over 5 years to the Canadian Air Transport Security Authority (CATSA) to increase its level of service, improve screening wait times, and strengthen security measures at airports.
• $210 million over five years to VIA Rail to conduct maintenance on its trains on routs outside the Québec City–Windsor Corridor and to maintain levels of service across its network.

Restaurants Canada Responds

In its reaction to the 2023 federal budget, Restaurants Canada said that it was pleased to see some positive measures in the 2023 federal budget to support Canada’s foodservice sector.

The association noted that the budget also addressed the federal alcohol excise duty, which will now only increase to 2% on April 1 rather than the initially planned 6.3%.

The federal government also highlighted an agreement with major credit card companies to reduce interchange fees, a big win for our sector, as it leaves more dollars in the hands of business owners; with the association observing that “we look forward to more details to come on this initiative.”

Restaurant Canada also applauded the fact that the federal government took its recommendations to invest in the hospitality and tourism industry through its Canadian Tourism Growth Strategy, which has the potential to bring back economic benefits to our sector.

The association notes, however, that while the budget “brought some positives,” the government missed an opportunity to implement sector-specific support for the restaurant industry, which was the hardest hit by the pandemic.

Olivier Bourbeau, Vice President of Federal & Québec Affairs, said: “By leaving several of our recommendations on the table, such as extending the CEBA loans by 36 months and implementing a scale-down model on the forgivable portion, as we proposed in our Federal Pre-Budget Submission 2023, the Canadian Government missed the opportunity to save struggling small businesses from an uncertain fate.”

Bourbeau continued: “In a recent Restaurants Canada survey, we found nearly 20% of the restaurants that have yet to reimburse CEBA will not be able to repay it in part or at all.”

Despite effective measures proposed by Restaurants Canada to address the foodservice sector’s labour shortage, the budget also failed to improve and streamline the Temporary Foreign Worker (TFW) program by:

• Implementing the Trusted Employers’ Program;
• Simplifying the TFWP application process, lowering fees and addressing the backlog;
• Creating a dedicated food service stream (for TFWs); and
• Remodeling the NOC codes (classification C and D): regrouping positions from the same field/expertise, providing more flexibility and training/promoting opportunities.

Restaurant Canada says that it is encouraged to see the creation of a committee to work on regulatory frameworks in order to explore the opportunities to address cost of goods led by the Minister of Intergovernmental Affairs, Infrastructure and Communities. To explore mutual recognition of regulatory standards, which will ensure goods and services are able to move more freely addressing some of the regulatory burdens. We look forward to working with the government to ensure this work delivers reduced costs for our sector.

Restaurants Canada will continue to work in collaboration with the Government of Canada to ensure it continues to move forward with recommendations that render additional gains for foodservice from coast to coast to coast.