Federal budget brings $1.5 billion support for hard-hit tourism and travel sectors

With planes grounded and events cancelled, these two sectors have been among the hardest hit in the pandemic

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The pandemic-battered travel and tourism industries will receive about $1.5 billion in targeted support from the federal budget as the Trudeau government attempts to boost jobs and revive the economy.

The two sectors have been among the hardest hit due to restrictions and closures to help prevent the spread of COVID-19, with events cancelled and planes grounded. To help revive the beleaguered industries as the pandemic unwinds, the federal budget earmarked $1 billion for the tourism industry and $465 million dollars for air travel and airports.

“It means providing support where COVID has struck hardest — to women, to young people, to low-wage workers, and to small and medium-sized businesses, especially in hospitality and tourism,” Finance Minister Chrystia Freeland said on Monday.

The budget includes $82.5 million this year for Transport Canada to help large Canadian airports invest in COVID-19 testing infrastructure, with an additional $105.3 million over five years to develop touchless and secure air travel technology with international partners. The Canadian Air Transport Security Authority will also receive $6.7 million to purchase sanitization equipment.

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Passengers typically make up about 90 per cent of airport revenue, but during the pandemic, travel plummeted to 10 per cent of normal levels while airports remained open to manage essential travellers and cargo. As a result, Canada’s airports expect to have lost $5.5 billion in revenues while adding $2.8 billion in pandemic-related debt by the end the year, according to the Canadian Airport Council.

“Canada clamped down on travel to keep Canadians safe, which has had an immediate and devastating impact on the air sector and prospects for post-pandemic recovery,” Canadian Airport Council president Daniel-Robert Gooch said in a press release last week.

In an attempt to meet its goal of creating one-million jobs by the end of this year, the federal government is spending $1 billion investment over three years to support festivals, local cultural celebrations, concerts, exhibits and live shows.

The pandemic has decimated local tourism industries across the country. The number of active businesses in the sector dropped by nine per cent between January and November of last year, according to a March report by Destination Canada.

Large national festivals — including Toronto’s Canadian National Exhibition, Vancouver’s Pacific National Exhibition and the Calgary Stampede — have struggled to maintain leases and pay what staff remain after layoffs without being able to host in-person events. Last year, the Canadian Association of Fairs and Exhibitions asked for $74 million to help fairs, exhibitions and agricultural societies survive.

The investment in travel and tourism comes one week after the federal government announced a $5.9 billion relief package for Air Canada, with further investments in Canada’s airlines to be announced at a later date.

Monday’s announcement marks the first federal budget since before the COVID-19 pandemic hit, and the Canadian government is spending a significant amount of money — the most spent the Second World War — to help get the economy back on track.

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