Industry lobbies feds for domestic tourism subsidy

Discover Your Canada Act would provide tax incentives for Canadians who travel across three provincial boundaries

Vancouver tourism industry executives say it's a good time to enact a bill that would provide a tax incentive for Canadians who vacation within the country.

The rationale is that Canadians are their biggest target market and the travel deficit between the number of Canadians travelling abroad and the number of international visitors coming to Canada is widening (see sidebar).

Later this month, MPs are set to debate Montreal MP Massimo Pacetti's private member's bill advocating the tax incentive for domestic tourists who travel across three provincial boundaries.

Pacetti was inspired to draft the bill about two years ago when he visited Vancouver as part of a parliamentary committee.

His Discover Your Canada Act would provide an income tax deduction of up to $2,000 annually on travel expenses across Canada, including:

•100% of the cost of bus trips;

•75% of train tickets; and

•50% of domestic flights.

Motor vehicle costs would not be eligible.

"This would be a small measure in the direction of reducing Canada's travel deficit," said Vancouver Quadra MP Joyce Murray, a Liberal Party of Canada leadership candidate.

Murray added that measures taken by the Conservative government have either deterred international visitors or encouraged Canadians to travel abroad.

They include decisions by the Conservatives to:

•end the GST rebate program for foreign visitors (2006);

•require Mexican residents to obtain visas to enter Canada (2009); and

•raise duty-free exemption limits for Canadians travelling abroad (2012).

Funding is also being slashed for the Vancouver-based Canadian Tourism Commission (see page 3).

The proposed act has garnered backing from local tourism executives.

"I support [the Discover Your Canada Act] big time," said Vancouver Trolley Co. CEO Jim Storrie. "The largest target audience is Canadians, so if it would create an incentive for people to travel in their own country, it would be grand."

He added that current high government taxes and fees on Canadian airports are a financial disincentive for residents of Central Canada to travel to B.C.

"Air fares can be pretty ridiculous to go to some Canadian cities, such as Prince George," he said. "It can cost more to go to Ottawa from Vancouver than to go to England."

However, Scott French, a spokesman for tourism minister Maxime Bernier, told Business in Vancouver that passing the Discover Your Canada Act would be expensive.

"In an era when governments are trying to return to balanced budgets, costly new subsidies are not the best use of taxpayers' dollars," he said.

"Canadian tourism is currently undergoing strong, healthy growth with more and more Canadian families travelling our country. In 2011 alone, Canadians were responsible for 81% of tourism revenue."

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