It’s been said that it takes a village to raise a child. Similarly, it takes a village to grow an industry – a community of supporters and believers who help nurture, sustain and invest in it to keep it surviving and thriving.
After a tumultuous year, the hotel industry continues to suffer through one of its darkest periods ever, (see hotel-investment stories beginning on p.12). While last month, there was optimism in the air as Canada received its first shipments of vaccines, the sudden surge of variants and delays in the vaccine supply mean we now find ourselves in a third wave, one that promises to be deadlier than the previous two.
According to Susie Grynol, president of the Hotel Association of Canada, HAC, without continued support, 70 per cent of the hotel industry could close its doors by the end of the year. Thankfully, in late April, when the Liberal government announced its budget, some relief was offered, including the continuation of the wage and rent subsidy until September and possibly into November, if the situation remains critical.
Among other highlights of the budget, the government proposes to introduce a new Canada Recovery Hiring Program for eligible employers who continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they re-open, either by increasing wages or hours worked, or hiring more staff. This support would only be available for active employees and will be available from June 6 to November 20, 2021. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy. The aim is to make it as easy as possible for businesses to hire new workers as the economy re-opens.
Additionally, the budget proposes to assist the tourism sector’s recovery, with a package of supports totalling $1 billion over three years, starting in 2021-’22. It also proposes to provide $100 million to Destination Canada for marketing campaigns to help Canadians and other visitors discover and explore the country. And, it will establish a $50-million Tourism Relief Fund to be administered by the regional development agencies to support investments by local tourism businesses in adapting products and services to public-health measures.
The budget also proposes a Digital Services Tax at a rate of three per cent on revenue from digital services that rely on data and content contributions from Canadian users. That means digital companies such as Airbnb will be required to charge and remit GST/HST to their hosts and foreign-owned digital companies will be required to pay a three per cent tax on revenue in Canada. This was a key recommendation of HAC’s since it began working on this file and represents a landslide win for the Canadian hotel sector, says Grynol.
