Toronto lost nearly $1B in GDP due to scrapped tourist rebate, report says
Retail Council of Canada analyzed 10 years worth of numbers, is pushing for the program's return
It was a program that was phased out by the federal government more than a decade ago, but new numbers from the Retail Council of Canada (RCC) show the visitor rebate could have brought in $993 million in Gross Domestic Product to Toronto and $5.96 billion to Canada over the span of 10 years.
The visitor rebate program — introduced in the 1990s — allowed visitors to Canada get a rebate for the sales tax on items that they purchased in the country.
The RCC analyzed international visitor spending over the span of 10 years, also factoring in other elements such as currency rates and spending on advertising.
"Nearly $6 billion has been lost from our economy as a result of this policy change," said Sebastian Prins, senior policy analyst with the RCC.
The federal government scrapped the program in 2007, citing costs to administer it and a low number of tourists actually using it.
Toronto hit hardest
"Toronto was the hardest hit," said Prins, who explained that the city is the country's business hub and sees the most international visitors who stay for more than one night.
The Tourism Industry Association of Ontario is also pushing for the Visitor Rebate Program to be be brought back, saying it would attract more international tourists who spend money to the province.
"The tourism industry has been talking about bringing the program back for 10 years," said Beth Potter, president and CEO of the Tourism Industry Association of Ontario.
"Anywhere where we can make it any easier to choose Canada — and Ontario in particular — that's a good win in our perspective."
The federal government replaced the visitor rebate with the Foreign Convention and Tour Incentive Program (FCTIP).
It doesn't offer rebates on GST/HST products bought in Canada. Instead, it offers rebates to:
- Non-residents for the GST/HST paid on short-term and/or camping accommodation in Canada included in an eligible tour package.
- Convention sponsors, organizers and exhibitors for the GST/HST paid on certain properties and/or services used in the course of conventions held in Canada.
But the RCC says that doesn't go far enough, adding that Canada is the only Organization for Economic Co-operation and Development (OECD) country that has a federal sales tax but doesn't have a rebate system.
"We would like to see this brought back," said Prins.
"We've seen a damage to GDP as a result of this program being cancelled. It's our stance that the government should bring this back."
In a written statement to CBC Toronto Wednesday evening, a federal Ministry of Finance official wrote that "the government has made significant investments to drive tourism, including enhanced tourism marketing and other areas that directly benefit from this important industry.
"Numbers are on the rise, with 2017 being the best year ever for tourism in Canada," the statement reads.
"In her capacity as Minister of Tourism, Minister [Melanie] Joly will also be working on a new federal tourism strategy that will drive even more economic growth and create good jobs for the middle class in this important sector."