April 27 - While the continued rollout of Canada’s vaccination program could mean a better summer ahead, the summer months will also bring a tapering off of government support, and that will have dire consequences for the travel industry, says ACTA President Wendy Paradis.

 

In a meeting with Deputy Prime Minister and Finance Minister Chrystia Freeland last week, says Paradis, ACTA learned that the budget assumes the vaccine rollout will continue at a rapid pace through the end of June — and Minister Freeland said, “I believe Canadians are going to have a great summer.”

 

Says Paradis: “While we hope that the Minister is correct, ACTA along with other travel and tourism associations stressed that the timelines are premature. Given that we are still under very strict lockdowns, borders closed and travel restrictions in place — travel agencies and travel agents will not see any notable increase in revenue in Q3 and Q4 when aid programs are set to expire.”

 

Key government financial assistance programs are set to start winding down in July. As announced by Minister Freeland in the 2021 budget earlier this month, the extension of Canada’s COVID-19 aid programs includes:

• Extending CEWS, CERS and Lockdown Support until Sept. 25, 2021
• Extension of the Canada Recovery Benefit (CRB), by 12 extra weeks

 

While the CRB will be extended by 12 extra weeks, for a total of 50 weeks, starting July 17 CRB will pay out $300 per week, down from $500, for the final eight weeks before stopping completely.

 

Paradis says that when the 2021 Budget was announced on April 19, ACTA waited with bated breath, like millions of other Canadians, as Minister Freeland tabled the government’s first budget in more than two years.

 

For more than 13 months, ACTA has intensively lobbied governments drawing much-needed attention to the dire economic situation faced by travel agencies, travel agents, independent travel agents, and the entire Canadian travel industry eco-system.

 

Air Canada’s financial relief package agreement with the federal government had been announced the week before. The first airline package, it included mandatory customer refunds and commission protection.

 

“This is significant,” said Paradis. “In speaking with travel associations around the world, ACTA understands that Canada is the only country where a travel agent commission protection program has been included by the government airline financial relief package.”

 

Paradis says ACTA has carefully studied the extensive 724-page federal government budget document and has identified the areas of benefit — and area of significant concern — to travel agents.

 

Although the extension of financial aid programs through to September 2021 is welcome news to ACTA, there is a serious concern with the decline in the aid programs scheduled to begin in July.

 

“Leading up to the budget, ACTA was hearing from multiple sources in Ottawa that there were strong indications that the government would be eliminating several financial support programs including CEWS, CERS and CRB programs,” said Paradis. “This move would follow New Zealand and Australia who ended their Job Keeper or wage subsidy programs effective March 31, 2021 causing a devastating impact on travel agent businesses.”

 

She added: “So, we were pleased the Canadian government extended these financial aid programs, but have grave concerns about the aggressive tapering off for all of these programs in the travel industry.”

 

ACTA, along with other travel and tourism associations and their members, will continue to aggressively lobby the government to stress the importance of these financial support programs to our industry.

 

ACTA’s urgent lobby priorities over next 30 days are:

• Extend the critical CEWS, CERS and EI programs at maximum support to the end of year, or 90 days after travel restrictions lifted • Maintain the CRB benefits at the current $500/wk level to the end of 2021, or 90 days after travel restrictions lifted • Extend the RRRF application deadline and other liquidity programs (CEBA, HASCAP, etc) to the end of 2021, or 90 days after travel restrictions lifted, and expand the accessibility to sole proprietors for programs where this criteria is not in effect • Extend the CRHP to the end of 2021, or 90 days after travel restrictions lifted

See the full budget here.

 

The Regional Relief and Recovery Fund (RRRF) application deadline was extended to June 30, 2021, though travel agents have experienced many challenges with this program, much like some of the other liquidity programs.

 

The government has proposed to create the Canada Recovery Hiring Program (CRHP), designed to help hardest hit businesses. The CRHP could provide opportunities as the CEWS program decreases, business begins to pick up and there is a need to rehire, although funding amounts decrease monthly and the program is only available June to November, 2021.

 

The government’s allocation of the $1 billion for tourism is currently broken out to $500M for the Tourism Relief Fund –administered by the Regional Development Agencies, and $500M to Festivals, Canadian Heritage and Destination Canada.

 

Paradis says it’s important to keep in mind that while the budget has been tabled, it still has to move through the parliamentary process and as such, by no means is this document the end product. The budget is currently a framework, although the government will move quickly to introduce the Budget Implementation Act (BIA). The government’s BIA will need to go through the usual legislative process before becoming law – including important committee reviews by both the House and Senate where the legislation will potentially be amended several times before reaching its final form.

 

This means that our industry still has the opportunity to influence changes to the programs or direct how some of the monies earmarked for the programs can be utilized. ACTA has already had meetings with some key Ministries and will continue this newest lobbying campaign over the next several weeks.

 

Since the government’s announcement on April 12 of the approval of Air Canada’s financial aid package, ACTA has been soliciting feedback from travel agency and travel agent Members highlighting the gaps with the protection of commissions. While Air Canada and Air Canada Vacations have been making positive adjustments to refund policies, gaps in commission protection remain.

 

ACTA continues to work with their travel supplier partners on the refund process and the protection of travel agent commissions. In ACTA’s original ASK of the government, ACTA stressed the importance that if consumer refunds were mandated, airlines and tour operators needed to be given funding to cover travel agent recall commissions. ACTA has already reached out to the Ministries of Finance and Transport advising that there are some gaps in recall commission protection commissions and that an additional fund may be required.

Source: Travelweek

 

 

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