The Sault Ste. Marie Chamber of Commerce (SSMCOC) is encouraging the federal government to consider implementing a program that would help encourage more spending by U.S. tourists.
In a letter to the Federal Minister of Finance, dated January 27th 2016, the SSMCOC urges the Minister to give ‘strong consideration’ to the Frontier Duty Free Association’s proposal to create a pilot project that would provide a 5% (federal GST equivalent) rebate to American visitors, who enter and leave by way of a land border crossing, on purchases made during their stay in Canada. The proposal calls for applications for the rebate to be available at participating Canadian duty free stores located at land border crossings; the rebate could then be spent at each crossing’s respective duty free store.
SSMCOC President, Monica Dale, notes that border communities have faced ever increasing challenges in attracting U.S. shoppers. She says, “over the course of the last decade, post 9/11 border security, a stronger Canadian dollar, rising gas prices and lower sales taxes in many U.S. jurisdictions have all played a part in diminished American interest in shopping in Canada.”
She notes that “those factors have combined to erode the number of travelers to Canada by 23.9%, with a particularly alarming decline of 14% in the number of travelers crossing the border into Canada by car between 2008 and 2013. In the same period of time, generally lower U.S sales taxes and a period of parity between the U.S. and Canadian dollars have contributed to a reduction of 32.7% in the total amount spent by American visitors.”
Concurrent to the issues noted by Dale and the resulting drop in visits and foreign shopping dollars, many of Canada’s rivals for tourist business, including Great Britain, the European Union and India, have implemented tax rebate programs for international visitors, effectively giving them an advantage over Canada in the highly competitive tourism marketplace.
The SSMCOC feels that the Road TRIP (Travel Rebate Incentive Program) proposal is wisely targeted at stimulating American tourism and increasing the extent to which border communities, such as Sault Ste. Marie, can benefit from U.S. shopping dollars by reducing the tax burden on American visitors.
The SSMCOC also notes that the Road TRIP proposal is well-placed to reinforce and benefit from the Tourism Industry Association of Canada’s (TIAC) current industry-sponsored marketing initiative that targets Americans living within a four hour drive of a Canada / U.S. land crossing and projects to increase Canada’s gross receipts from tourism by $1.5 billion. The SSMCOC anticipates that this is the same market that would take advantage of the Road TRIP rebate.
Dale suggests that if even a fraction of those receipts are eligible for the road trip rebate, the government is in a position to exponentially increase the extent to which cross-border communities benefit from American tourism. She notes that “research has proven that leisure travel between two countries has the added effect of increasing trade between those countries. As such, Road TRIP presents a unique opportunity for the government to positively impact the local economies of border communities across Canada, to support domestic manufacturers and to spur cross border trade.”
“Sault Ste. Marie has a great deal to offer to American visitors,” says Dale. “Those that regularly visit our area are coming for our year-round outdoor opportunities, for our skiing, our hunting and fishing opportunities and for our shopping, but we can’t afford to let the benefits derived from tourism slip.”
“Without a doubt, the Sault has faced some significant economic challenges recently,” she adds, “but the Road TRIP proposal represents a relatively simple initiative that has potential to pay significant dividends and provide a positive impact on our local tourism and retail sectors. Further, the duty free stores that would be taking part possess the capacity to self-administer the pilot project, so the administrative impact and cost to the Government would be minimal.”
The Sault Ste. Marie Chamber of Commerce has been advocating for a Travel Rebate Incentive Plan in recent years. In January 2015, the SSMCOC joined four other Ontario Chambers to support a resolution to the Ontario Chamber Commerce to advocate for a similar TRIP rebate.