FOR IMMEDIATE RELEASE
[La version française suit le texte anglais.]
FAO ASSESSES THE IMPACT OF THE COVID-19 OUTBREAK ON
ONTARIO’S TOURISM, CULTURE AND HERITAGE SECTORS
TORONTO, June 25, 2020 – To support the work of the Standing Committee on Finance and Economic Affairs, the Financial Accountability Office (FAO) has released Tourism, Culture and Heritage: An Overview of the Tourism, Culture and Heritage Economic Sectors, Related Ministry Programs and the Impact of the COVID-19 Pandemic. The FAO’s report provides economic analysis of the sectors and reviews the Province’s $1.7 billion spending plan for related programs in 2020-21.
In 2019, the tourism, culture and heritage sectors generated a combined $43.7 billion in economic activity, representing 4.9 per cent of Ontario’s GDP. The tourism sector was supported by 147 million visits by tourists (Ontarians, interprovincial and international) who spent $29.4 billion in Ontario, supporting 335,000 jobs. The culture and heritage sector, which includes film and television production, publishing, broadcasting, performing arts and museums, contributed $24.0 billion to the economy and supported 282,000 jobs.
Starting in March 2020, the measures undertaken by the provincial and federal governments to contain the COVID-19 outbreak have had a significant impact on the provincial economy and the tourism, culture and heritage sectors. From February to May, employment in tourism-connected sectors fell by 26 per cent and in the culture and heritage sector by 20 per cent.
Looking forward, the FAO forecasts that Ontario’s overall real GDP will decline by 9.0 per cent in 2020 and rebound in 2021, growing by 8.5 per cent. However, the tourism, culture and heritage sectors face unique challenges as ongoing travel, economic and social restrictions will impact the sectors’ ability to reopen and recover. For example, the federal government has banned visits from overseas and non-essential visits from the US, and requires a 14-day quarantine for people entering the country. Until the COVID-19 outbreak is resolved such that international travel is able to significantly resume, the loss in annual spending by international tourists will reach $11.4 billion.
In the culture and heritage sector, while some activity is allowed to resume under Stage 2 of the government’s reopening plan, heritage institutions (museums), performing arts and sporting events are dependent on large gatherings of people. Even if restrictions on large gatherings are lifted, physical distancing requirements (i.e., the two-metre rule) would result in significant reductions in the maximum allowable capacity for heritage institutions and other venues.
- In 2019, Ontario received 24.4 million visitors from other countries and the rest of Canada. In addition, Ontarians took 123.0 million trips for touristic purposes within the province – far more trips than visitors from any other place of origin.
- Ontarians spent $15.2 billion on tourism in Ontario compared to $14.2 billion spent by other tourists.
- In 2020-21, the Ministry of Heritage, Sport, Tourism and Culture Industries plans to spend $1.7 billion on tourism, culture and heritage-related programs. Nearly 85 per cent of planned ministry spending this year is for cultural media tax credits and 18 provincial agencies.
- Spending on cultural media tax credits is largely linked to industry employment, with the ministry offering rebates for qualifying labour and other costs. Given the significant drop in employment due to the economic downturn, this could lead to ministry savings.
- The ministry is responsible for the governance and operation of 18 agencies. 12 of the ministry’s agencies derive most of their revenue from sources other than the Province, which includes admissions and sales, and investments and donations. These revenue sources may be severely impacted by the reduction in tourism and the economic downturn, leading to less agency spending and the risk that the ministry will need to provide additional funds to its agencies to ensure that they can continue to operate.
The ministry added two new programs in 2020-21, $7 million for a “Heritage Initiative” program and $35 million to support the 2021 Canada Summer Games in the Niagara region, which is funded by the cost-shared Investing in Canada Infrastructure Program (ICIP).
About the FAO
Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario. Visit http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.