Economic impact
Experts offer views on travel restrictions, business failures in new report
BOB MOWAT
A panel of economic experts offered their views in the newly released Finder.com Bank of Canada report on whether travel restrictions currently in place – including border closures, quarantine rules and the discouraging of non-essential travel – should be maintained.
The monthly report – released on Sept. 3 – also canvassed the panel of 20 economic experts on when they expected to see an increase in the number of business failures in the travel and tourism industry.
Finder.com provided Canadian Travel Press with both the findings of the monthly report which looks at a range of economic issues, including interest rates, economic growth, the stock market, real estate and more, along with comments from the panel of experts.
In its September report, Finder.com asked its panel the following question on travel and tourism:
“Canada continues to maintain strict border closures, discouraging all non-essential travel, while enforcing 14 day quarantines on arrival. These rules remain in place even to countries with low community spread despite pleas from the travel industry to ease restrictions. Do you believe Canada’s travel restrictions and quarantine rules should remain in effect for the entire duration of the pandemic?”
It reports that: “Half of our panelists believe Canada’s 14-day quarantine rules and travel restrictions should remain in place for the duration of the pandemic regardless of Canada’s level of community spread.”
However, it also pointed out that: “More than a quarter of our panelists believe some restrictions should be eased.”
It also found that: “A little less than a quarter (22%) are unsure, with most of them citing it is tough to pick and choose countries, while others cite a situation that can change rapidly.”
Sherry Cooper, chief economist, Dominion Lending Centres, commented: “I think it is important to make adjustments as events change. We have no idea what the fall will bring, but if we get a surge, we need to keep the borders closed. If and when the situation improves, we can ease the restrictions for low-case country visitors.”
But Carl Gomez, chief economist, C.G. Economic Consulting, was emphatic, stating that: “The health risks from non-essential travel outweigh the costs of not reopening the border.”
Atif Kubursi, emeritus professor of economics, Econometric Research Ltd. & McMaster University, believes that: “We can be strategic in the application of these closures, where relaxation of the closures and suspending them in tune with the modulations in the levels of infections can be practiced.”
Murshed Chowdhury, associate professor, University of New Bruns-wick, said that: “It should be in place until the rate of infections in the US gets down to a reasonable limit that further spread can be contained.”
Finder.com also asked the panel the following:
“Many Canadian travel and tourism businesses are small to medium in size and are currently bringing in little to no revenue. How long do you believe it will be until we start seeing many of these businesses cease operations due to the pandemic’s devastating effect on the industry?”
Over half (58.8%) of the Finder.com panel see travel SMEs starting to fall in greater numbers 2 to 6 months from now. About one third (35.3%) of the panel are unsure.
Craig Alexander, partner & chief economist, Deloitte said: “I suspect the ending of the wage subsidy in December will lead to some struggling SMEs closing in early 2021.”
While James Knightley, chief international economist, ING, pointed out that the time period “depends on many factors, but I am sure there will be a steady flow of business failures.”
Roelof Van Dijk, director of market analytics & market economist, Canada – CoStar Group, said that: “Many travel companies might be able to make it through these tough times with the increase in locals domestically travelling. For those businesses that are not attracting enough domestic travel spend, or are more heavily reliant on tourism from abroad, these are the businesses that will disproportionately suffer.”
Van Dijk added that: “We expect to see a jump in travel tourism bankruptcies in September for those businesses that were not able to attract enough business during the all-important summer season.”
And Moshe Lander, economics professor, Concordia University, pointed out that: “If we’re still having this conversation after the winter tourist season, then many of these businesses are finished. Tourism will rebound when the new normal is better understood; until then, if they fall, then provide support, but let them fall.”
To check out Finder.com’s Bank of Canada report for September, go to https://www.finder.com/ca/bank-of-canada-interest-rate-forecast.
Finder.com is a global comparison site that launched in Canada in 2019 and is headquartered in Toronto. Since its launch, it has embarked on a significant growth plan in Canada, partnering with key financial institutions like Scotiabank, AMEX, Tangerine and Wealthsimple, and major retailers, The Bay and Walmart.
Currently, Finder Canada compares products in over 20 niches: credit cards, loans (personal, short term, business and car loans) mortgages, banking (chequing, savings, digital bank accounts), stock-trading, investments, credit building, money transfers, cryptocurrency, insurance (life, car, home and travel insurance), shopping, travel, streaming TV, software and internet plans.
