Lack of a plan limits growth of tourism in Ontario: OAGO
In its value-for-money audit of Ontario’s Tourism Support programs, acting auditor general, Nick Stavropoulos said that the economic growth from the tourism industry is being limited because the Ministry of Tourism, Culture and Sport does not have an effective long-term strategic plan for supporting and growing tourism in the province.
In releasing the report on Dec. 6, 2023, Stavropoulos pointed out that: “Tourism contributes to Ontario’s economy through many different sectors including transportation, hospitality and food and beverage businesses, so it’s important for the government to have a long-term strategy for delivering effective support through its programs.”
He pointed out that the OAGO’s audit found the Ministry did not always approve support in a timely way for events such as arts, food and music festivals across the province. This resulted in event cancellations, impacting communities and businesses that benefit from visitors and their spending to bolster the local economy.
Destination Ontario, a provincial tourism marketing agency, identified in an analysis that more strategic marketing investments could help the tourism industry grow. If some advertising costs now spent to market to Ontarians were reallocated to advertise in the United States, Ontario could potentially see an increase in U.S. visitors and tourism spending, which would provide a greater economic benefit to Ontario overall.
The OAGO’s audit also found the ministry provided COVID-19 support funding to recipients in the tourism industry that were not eligible. Six applicants out of the 90 applications we reviewed (of 570 total) received a total of almost $1.1 million despite being ineligible for this funding.
Said Stavropoulos: “As the tourism industry in Ontario continues to recover from the unique challenges of the pandemic, more strategic planning and more effective delivery of programs will be critical to maximize tourism’s economic benefits in communities and in Ontario.”
Why OAGO conducted its audit
Almost 132 million visitors explored Ontario in 2019, which represented about $37 billion, or 4%, of the province’s gross domestic product (GDP), and 396,000 jobs, or 5%, of total employment. The COVID-19 pandemic and the resulting public health restrictions significantly restricted travel, leading to a 41% decrease in the number of visitors in 2020 to about 78 million, and a 65% decline in contributions to the GDP to about $13 billion.
To support the tourism industry during the pandemic, one-time funding was directly provided to tourism operators, totalling about $132 million in 2021/22. This was in addition to over $40 million in annual funding programs, and about $67 million paid to organizations to help promote tourism in Ontario (Destination Ontario and 13 regional tourism organizations).
So, why does it matter?
Tourism impacts a number of different sectors within the province, including the transportation, accommodation, and food and beverage sectors. As well, many tourism-related ventures are small businesses, with 90% employing fewer than 20 employees.
Attracting tourists and tourist spending contributes to economic growth in the province. The tourism industry promotes local culture, and infrastructure and experiences built for visitors also benefit local residents.
For more, go to https://auditor.on.ca/en/content/annualreports/ar
