Tourism association baffled by N.S. government's bailout package
Many critical of $50M program aimed at just a handful of businesses
A relief package targeting just the biggest players in Nova Scotia's tourism industry has left other operators in "shock and disbelief" as they grapple with mounting bills and stunning losses of revenue, said the president of the Tourism Industry Association of Nova Scotia.
Darlene Grant Fiander said industry members are baffled by the government's announcement Friday of up to $50 million in loan guarantees for companies with at least 100 employees and revenues of $10 million or more in 2019.
The government said 11 companies could be eligible, but with the exception of Halifax-based Ambassatours, has refused to say who else could benefit from the program.
"It's just hard to believe we're coming out of the most significant economic event — on top of a health event — and that this is the best we have for a sector that's so important to this province and has so much potential," Grant Fiander said Wednesday in an interview.
After posting revenues of $2.6 billion in 2019, the effects of COVID-19 on travel have reduced that figure to about $900 million for 2020.
Questioning the process
Grant Fiander said tourism industry officials have been meeting regularly with government representatives and have been very specific about their needs based on surveys of members, yet none of that was a part of Friday's announcement. In fact, she said she met with Business Department officials two days before the announcement and there was no hint at that time of what was coming. The association is encouraging its members to contact their MLAs.
Given the dire circumstances many operators are facing, Grant Fiander said the government's plan was disheartening and "raised a lot of other issues beyond tourism."
"We just happen to be waiting seven months for a recovery plan," she said. "Beyond tourism, there's something so wrong about this."
Earlier this week, AllNovaScotia.com reported the relief package was similar to one advanced by a group of large tourism operators, which included Ambassatours and Ben Cowan-Dewar of the Cabot golf courses in Inverness.
According to emails obtained by AllNovaScotia.com, the group had Premier Stephen McNeil's former chief of staff, Kristan Hines, advocate on their behalf in June. Hines is senior vice-president of public affairs for National Public Relations.
Business Minister Geoff MacLellan has said the government knows the industry will need help beyond the initial $50 million and that it would continue to look for ways to help wherever possible.
Devastating ripple effect
Michael Tavares, co-owner of the MacKinnon-Cann Inn in Yarmouth, said what's needed right now is protection of the province's diverse tourism infrastructure.
"A lot of people who travel to the Maritimes, and especially to Nova Scotia, look forward to staying in these wonderful seaport towns and these 150-year-old houses [and experiencing] the hospitality that's generated through those," he said.
There's a ripple effect that happens in communities, said Tavares, because those businesses require services. Operations such as his are struggling to get help from banks and they're watching as insurance rates skyrocket.
In a year where business was "dismal" — down 85 per cent over previous years — Tavares said his fixed costs, led by insurance increases, have more than doubled.
"We don't have anywhere to go. We can't go to a bank and ask for a line of credit. We don't have that luxury," he said.
"I'm not asking them to pay my cable bill. But fixed costs like your taxes, your insurance, and even in some cases, your debt services — I mean, you've got to look at where's that money going to come from."
'An emergency for most hotels'
David Clark, past president of the Hotels Association of Nova Scotia, was likewise critical and concerned.
Members of his organization are facing staggering revenue declines. In some cases, they have bills that outweigh any profits they're taking in as occupancy rates crater due to reduced tourist travel, no cruise ship season and no conventions.
"It's been devastating for us," said Clark, who is also general manager of the Atlantica Hotel in Halifax. On several occasions, provincial officials have backed out of scheduled meetings, he said, calling for more communication from government with his industry.
Clark expects some hotels will close their doors in the coming weeks to try to offset the losses during what is traditionally a slower time of the year.
"One of the issues we're looking at is property tax. We're paying property tax right now based on revenues we achieved two years ago. Right now we're not even generating enough revenue to cover the tax bill in a month," he said.
"It's becoming an emergency for most hotels."