EcDev Journal

Why Tourism Matters in Ontario

Posted on Tuesday March 03, 2020
Contribution to Global Travel and Tourism 2018
Contribution to Global Travel & Tourism GDP Growth, 2018

By: Beth Potter, President & CEO, Tourism Industry Association of Canada (TIAO)

Tourism transformation

The economic landscape of Ontario is undergoing a period of rapid transformation; the exponential growth of tourism and the visitor economy are at the forefront of this shift. At the Tourism Industry Association of Ontario (TIAO) is the official voice to Queen’s Park on behalf of a powerful growth industry that has a greater economic impact than forestry, agriculture, and mining, combined.  TIAO collectively represents more than 188,000 businesses and 391,000 employees making the sector the largest employer of young people in the province.

With an annual tax revenue contribution of $5 billion, equal to 50% of Ontario's projected budget deficit in 2021, the tourism industry of Ontario is a powerful economic driver and an innovative industry. Tourism is a powerful force; not only is tourism represented in every riding of Ontario, but it is also represented in almost every portfolio held by the province.TIAO designs its policy work to be in direct conversation with the provincial government's ongoing review of regulatory frameworks. They are committed to bringing the tourism perspective to top public policy discussions, ranging from municipal governance structures, land-use planning, economic development, and strategic investments.

This article highlights our top policy priorities for 2020, and how TIAO has worked to align industry innovation and key amendments to provincial regulatory frameworks.

The Tourism Conundrum

Our industry is facing a ‘tourism gap’ conundrum, in which there is a difference between potential and actual visitation growth. Destination Canada’s 2018 report indicates that international overnight arrivals to Canada reached a new height of 21.13 million visitors - a 1% increase over 2017.  However, the United Nations World Tourism Office (UNWTO) shows that international tourism arrivals for 2018 have increased by 6% with 1.4 billion arrivals. In Ontario tourist arrivals for 2018 and 2019 showed less than 2% growth. Ontario is leaving important visitor spending on the table, but with strategic investments and partnerships, we can leverage the province’s power as a tourist destination of choice. Therefore, the following policy recommendations are designed to create a regulatory environment that will allow the tourism industry to continue to grow and serve as an economic driver across every part of Ontario.

Policy Framework

At TIAO, they take on pressing policy files on behalf of the tourism industry and develop evidence-based policy recommendations that reflect the multifaceted needs of the industry. Tourism in Ontario is going through a period of exponential growth, however, to continue this momentum our industry requires the necessary investment, labour, and infrastructure to succeed within a fiercely competitive global industry.

TIAO works to ensure that all provincial policies reflect the multifaceted needs of various sectors that span the industry. The policy is everywhere; however, it is often uneven in its application and impact. To deliver robust and nuanced policy recommendations they draw directly on our membership from across the province and all tourism sectors.


TIAO prioritize data collection methods that are linked to high levels of validity, they are strongly rooted in the social science practice of developing policy recommendations that reflect rigorous research and data collection process.   TIAO applies robust methodologies in our research of the key policy needs of the industry; including, Critical Discourse Analysis (CDA) and thematic coding of key pieces of legislation, qualitative surveys, semi-structured interviews, focus groups, and consultations with industry experts and stakeholders.

TIAO policy work and their accompanying methodology is always evolving, and it is only made better by the more perspectives they can draw upon.  They encourage not only their members but tourism stakeholders from across the province to reach out to TIAO and learn how to be a part of their multifaceted policy and advocacy work on behalf of the tourism industry of Ontario.

The Issues

TIAO policy recommendations range from ways to develop necessary transportation and infrastructure to provide greater connectivity across Ontario; strategies to address the growing labour shortage; recommendations for land-use planning and increasing the housing supply in every region; and mechanisms to support the long-term investment necessary to grow the tourism industry and continue our unparalleled ROI.

Some of the key files that are currently on TIAO’s priority list include:

The Travel Industry Act

The provincial government has re-opened this file as they are looking to reduce duplication & create a more efficient system for operators.  TIAO is in line with the Association of Canadian Travel Agencies (ACTA) in their recommendation that a consumer funded compensation model be implemented similar to Quebec.

The Growth of Affordable Rental Housing Supply to House Our Workforce

TIAO recognizes that the economic growth of tourism requires access to affordable housing in every region across the province, as the lack of housing greatly exacerbates our growing labour shortage.  TIAO directly consults with the Ministry of Municipal Affairs and Housing and submit their recommendations.  They also contributed to the review of the Public Policy Statement and the Ontario Housing Action Supply Plan.

Labour Shortage

Like other industries, tourism businesses are plagued by the province’s acute labour shortage.  Data from Tourism HR Canada indicates that through to 2035 (a mere 15 years from now) a potential 91,236 tourism jobs will go unfilled. Shortages that will delay the start of new projects, raise costs for businesses and give an advantage to other provinces and international competitors competing for marking share.

As an industry TIAO has been working on solutions to try and fill the gap.  One such initiative is Tourism SkillsNet Ontario. This program is working at the local level with tourism and employment organizations to close the growing skills gap by aligning recruitment and training models with the skills required by tourism businesses.

Climate Resiliency

Sustainable tourism is a huge focus not only in the news but for the industry and TIAO as an organization. Topics such as destination and traveler responsibilities, measuring/offsetting your carbon footprint, and best practices for reducing plastics are common points of discussion within the industry.

Municipal Accommodation Tax

In December 2017, the government of Ontario enacted legislation that would allow municipalities to levy a tax on transient accommodation.  This tax, called the Municipal Accommodation Tax (MAT) would, in some cases, replace an industry-led Destination Marketing Fee and create a revenue tool for municipalities.  In most cases, the revenue generated must be shared with the tourism industry in at least a 50:50 ratio.  The legislation dictates that the 50% (or more) of the funds that are designated for the tourism industry, are to be delivered to an eligible not-for-profit tourism entity, with a mandate for tourism product development and promotion. 

As the regulation has been implemented over the past 3 years, we’ve discovered some inconsistencies around regulation interpretation and governance of the model.  TIAO has been consistently working to ensure that the tourism industry’s voice is heard and that the government regulation of the MAT is structured in a way that provides consistency and security for businesses and customers alike. TIAO has directly consulted with more than 85 destinations across the province and representatives from the accommodation sector and has compiled a series of recommendations to ensure that the funds collected from the MAT are used as originally intended and that there are no unnecessary delays in accessing the funds.

Transportation/Communication Infrastructure

When TIAO discusses transportation they recognize that for competitive tourism growth in Ontario to occur there must be an abundance of efficient and affordable transportation systems that allow individuals to get to their destination with ease. Advanced transportation infrastructure is a key component when addressing our acute labour shortage.

On the communication infrastructure front, in today’s digital world, for tourism businesses to be successful, there must be broadband and cellular service in every community – including rural, remote and indigenous communities.

Tourism Matters in Ontario. 

[1] Figure 1: Global Impact and Trends 2019, World Travel & Tourism Council