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Standing Committee on Industry, Science and Technology


NUMBER 005 
l
1st SESSION 
l
42nd PARLIAMENT 

EVIDENCE

Tuesday, March 8, 2016

[Recorded by Electronic Apparatus]

  (1555)  

[Translation]

[English]

     Thank you very much.
    Welcome to the fifth meeting of industry, science, and technology. I'd like to thank our guests for their patience while we went through some votes. Before we start, I believe we have a guest.
    Ms. Hutchings.
    Thank you, Mr. Chair, and colleagues.
    I'd like to recognize Thea Hays-Alberstat. Today is International Women's Day, as you all know. Thea is a second-year political science student at the University of Toronto, and she is following me as an MP today. I understand there are 50, 60, or 70 of you followers today.
    Welcome. You're going to hear some great discussion and presentations on our fantastic country. We hope you'll learn something here today.
    As we are late, with respect to our guests here we're going to do the first hour as recorded, and then we'll break to a subcommittee and we'll tackle the subcommittee when we get to that point.
    Without further ado, I'd like to introduce the Canadian Tourism Commission, with David Goldstein, president and chief executive officer of Destination Canada; Gilles Verret, vice-president, strategy and communications, Destination Canada; and Sarah Sidhu, general counsel and board secretary, Destination Canada.

[Translation]

     Thank you, Mr. Chair, vice-chairs and members of the committee.
    My name is David Goldstein and I am the President and CEO of Destination Canada. I am joined by my colleagues Ms. Sidhu and Mr. Verret to answer your questions.
    We are very pleased to be here and take part in your review of the activities under Innovation, Science and Economic Development Canada. These are exciting times for the industry and for Destination Canada.

[English]

     Today we'd like to provide you some background on our organization to give you a taste of two of our key upcoming initiatives.
    As you are aware, our authority flows from the Canadian Tourism Commission Act of 2000, and our raison d'être is twofold. The first is to work with the industry, provinces, and Canadian destinations to create campaigns that stimulate demand and inspire international business and leisure travellers to choose Canada. The second is to provide business-to-business connections between Canadian entrepreneurs and international buyers in a very competitive global environment.
    Based in Vancouver and operating in 12 global markets, we build on our parliamentary A-base of $58 million a year, with an additional $30 million over the next three years to relaunch our U.S. leisure market program. In turn, we stimulate a one-to-one co-investment from our partners for every federal dollar. To that end, we support Canada's $88-billion tourism sector, which generates over $17 billion in annual foreign exchange receipts for the Canadian economy.
    We strive to be at the cutting edge of digital marketing and work to inspire a Team Canada collaborative approach, including our recent memorandum of understanding with the Aboriginal Tourism Association of Canada to help them bring their Canadian aboriginal tourism product to the international stage.
    This collaboration with our department, ISED, runs across the federal family, including but not limited to Parks Canada, Immigration, Global Affairs, and the regional development agencies.
    Tourism is Canada's number one services export sector. It stimulates economic diversification and creates businesses and jobs in every region of the country. It may be of interest to members of the committee that one in 11 jobs in this country depends on tourism, while the industry itself directly generates 650,000 jobs and is the largest employer of Canadians under 35.
    The good news is that Canada is back. In 2015, for the first time in a decade, Canada surpassed the UNWTO global average for visitation growth. In 2015, global growth was up 4.5%, while Canada was up 7.5%, almost double the international average.
    Ladies and gentlemen, our projections for 2016 and beyond continue to be strong. We will achieve these through our global programs, two of which we'd like to highlight for you today.
    Next month, we will be launching Connecting America, our cutting-edge digital media campaign for the U.S. I was pleased to report at the recent federal-provincial-territorial tourism conference that we have full engagement from all 13 provinces and territories, demonstrating the power of a Team Canada approach to the U.S. market. Just to be clear, Connecting America is not a short-term opportunistic play to capitalize on the exchange rate. Our strategy is designed to better integrate our marketing efforts to deliver a deeper and longer lasting impact in our largest tourism market.
    We have prepared the following video that helps illustrate a bit of the framework for the campaign we'll be launching in April.
    [Video presentation]
    Normally at Destination Canada we don't run domestic campaigns, but Canada's 150th anniversary provides us with a unique opportunity to inspire millennials—Canadians from 18 to 34—to connect with and explore their country. This is a demographic that we know loves to travel but is eight times more likely to travel abroad than to travel within Canada.

  (1600)  

     To inspire millennials to discover what their own country has to offer, we are launching this 12-month high-energy campaign in conjunction with Bell Media and their highly valued media services like MuchMusic and MusiquePlus.
    The next video will help you get a sense of that excitement.
    [Video presentation]
    In conclusion, Mr. Chair, Vice-Chairs, and members of the committee, it's interesting that in July 2015, the Reputation Institute, an important international organization, named Canada the top destination in their Global RepTrak survey. Canada often consistently ranks first or second when it comes to its reputation around the world as a tourism destination, but stubbornly we are 17th when it comes to international arrivals. We believe this gap can be closed.
    The Canada brand has never been stronger and together we are working to ensure that our world-class reputation is converted into a steady increase in arrivals and therefore business and economic gains for the country.
    On behalf of my colleagues, I want to thank you for this opportunity to present. I look forward to working with the committee in the future on any of its potential studies. We are pleased to answer your questions today.

[Translation]

    Thank you very much.

  (1605)  

[English]

    Thank you very much. That was well done.
    I know when I see those commercials on TV, I am going to get very excited, so I'm happy to see what you've shown us today.
    We're going to start our questioning with Mr. Jowhari.
    Being International Women's Day, first of all let me acknowledge Sarah, followed by David and Gilles. Thank you very much for coming and sharing your vision of what you are planning to do for Canada and for us.
    Let me start by saying that I had the opportunity to review the special examination opinion that was prepared, and I also got directed from there to the 2015-19 “Marketing in Canada in an Ever-Changing World”. I was hoping that 68-page document would be made available to us because I found it very interesting. I found it very comprehensive, and it addressed a lot of questions I wanted to ask.
    Having said that, I have three questions to ask of the panel.
    Question one is, since that report was put together in mid-2015, with the new mandate that the government, especially the Minister of Tourism, has given and has published, is there anything in that report that's going to change: any of the priorities, strategic directions, your initiatives, objectives, and key performance measures?
    Question two has to do with the amount of appropriation, which I believe to be $70.5 million. It's been broken down by about $60.7 million for marketing and sales, $2.2 million for tourism research, and about $1 million for experimental product development. What activities will your organization be carrying on under these three programs, and are there any changes to these three programs?
     Thank you for your questions. They are quite detailed. I will provide you with a cursory answer, but some of these deserve a more fulsome, detailed, written reply that we would be happy to furnish to the clerk to be distributed to the rest of the committee.
    I wouldn't say our priorities have changed, but they have highlighted certain areas that are opportunities for us in a changing marketplace. For example, we were already on a course to find new ways to look at digital marketing in this age. We are looking at plans to get far more aggressive in that area.
    You asked about KPIs and measurement. We're undergoing a re-evaluation right now. When you look at marketing campaigns, it has been a historic issue of trying to evaluate their ROI. We are looking at a whole series of issues in conjunction with Oxford Economics to look at how we're gauging the success of those campaigns.
    As per the spending allotments that were within the estimates, I can go through the series of initiatives, but they include a fair amount of research. We're world-renowned for the research we do at Destination Canada.
    Some of that expenditure is services we pay Statistics Canada. Some of the exploratory pieces are works we do to help build SMEs' capacity to get ready for marketplace.
    We would be happy to supply a much more fulsome detailed answer to the questions to the clerk within, let's say, four business days if that's okay.

  (1610)  

    Based on the feedback I received from you, is it fair to say that the new mandate of the ministry and the new mandate of the government have not substantially changed any of the planning you have done as part of the report you published earlier this year?
    There are areas where we're probably more prominent in than we were a year ago. I would use aboriginal tourism as one of the initiatives. It's not that we weren't involved in aboriginal tourism. In fact, last year was the first time we did a full aboriginal tourism pavilion as part of our Rendez-vous Canada big trade show event. Obviously, this is an area where we see tremendous acceleration and feel the direction of the mandate letter gives us support to continue to do that. There are areas like that.
    There's another issue. I wouldn't say it's a function of the new government or our transition, because we've gone through a transition as well, but we're working to be far more reflective of the country as a whole.
    It's fair that this organization, without being unfair to my predecessors, had been a leader or expressed themselves as a leader and not as collaborative an organization as it once was. Where you find that very tangibly is in the partnership levels. Over a year ago the organization had a partnership ratio of 0.6:1, so that meant 60¢ of partnering dollars for every dollar that the federal government committed. This year we're going to be reporting a 1:1 ratio. Our level of collaboration is much higher, especially with our provincial counterparts, our local city destinations, and the industry itself.
    Can I ask if there is any amendment to the emerging market in Canada report that you are going to publish because of the change of the mandate or realignment with the mandate? Can you please make it available to us?
    We submit a corporate plan to Treasury Board on an annual basis, and the précis of that is published, so once that has gone through the process, it will be published. What you have before you today is last year's annual report.
    Our next annual report goes to our board next week, I believe, and will be brought to the minister before the end of March. She will then table it in the House of Commons. That will be made available at the earliest convenience at some point in the spring.
    Thank you very much.
    Mr. Richards.
    I'm going to share my time with Mr. Bernier. Could you give me an indication when I have about two minutes remaining because I want to make sure I give him a couple of minutes.
    I want to welcome my friends from Destination Canada. It's always good to see you and I have just a couple of questions for you today.
    I was glad to hear, in your response to the last question, your discussion about the increase in terms of your ratio of partnership funding to 1:1 this year. Congratulations on that. That's something I know you were working very hard to accomplish and we're glad to see that. You mentioned that was in large part due to better collaboration with both provincial associations and local DMOs and others.
    I wonder if you could just elaborate briefly on that for me in terms of some of the things you've done. And if you could, include in that the context of the connecting America funding that was in last year's budget under our government to increase funding for U.S. marketing at this very key time, I think, with the opportunities that exist there. We're obviously seeing great results from that, but I wonder if you could include in that context what you've been doing to try to better partner with some of the provincial and local associations.
    First of all, the increase to the 1:1 ratio was before the connecting America investment began, so that's dollar for dollar against last year. At the risk of sounding immodest, we're quite proud of the gains taking place there. It really goes to a very different collaborative approach.
    Having come from the industry myself, there have been frustrations in the past that the organization was very focused on the Canada brand and a sort of elitist version of the Canada brand. We're taking a different approach that while the Canada brand is important there are a whole bunch of brands that make up Canada. Sometimes it's the Canada brand's job to lead and sometimes it's our job to lead from behind and to put in the window the most attractive offerings no matter where they are in the country.
    That and an effort to become more commercially relevant to the industry I think are what we can attribute the increase in partnership levels to, or what we like to say are co-investment levels. We're expecting that to be even higher with the connecting America program.

  (1615)  

    Excellent, and that's great to hear.
    If I'm putting you in a difficult spot, let me know. I mentioned connecting America, and obviously the opportunities that exist there with the dollar, and a number of other factors, including the connecting America marketing money and the job you're doing to market Canada to the U.S. I wonder what we can do to build upon that.
    I know the Frontier Duty Free Association had the road trip proposal, for example, where they were looking at a rebate for those who are doing cross-border shopping when they're visiting from the U.S. That's one example of an idea that we can use to build upon some of the success we've seen through connecting America.
    I wonder if you have any thoughts on what more could be done to build upon that success.
    With all due respect, Mr. Richards, I think you're confusing my previous role. I think that's a tax policy issue that would not be part of my purview right now.
    I understand that's the case, but you obviously do have some experience in the industry. Where possible, could you comment?
    In this process of becoming more commercially relevant, we are getting a better understanding of what each part of the sector would look to see as their commercial benefit out of the program. What would the accommodation sector see as a win, or what would the aviation sector see as a win? It breaks down into a bunch of subsectors including golf, and skiing, and I'm sure, the duty-free business as well.
    By building those programs that are more commercially relevant, you're going to lever up the co-investment dollars. That's where we think we're going to see the maximum impact of the campaign.
    Okay, great.
    I'm going to turn it over to Mr. Bernier now.

[Translation]

    Thank you, Mr. Richards.
    Mr. Goldstein, I would first like to congratulate you for managing the restructuring of the Canadian Tourism Commission, which is now called Destination Canada. You had to hold consultations with the industry across the country, not just with officials in Ottawa, to identify its interests. You have been doing so very well.
    To me, the tourism industry is an export industry. This is especially true now that the value of the Canadian dollar is very low. You will be able to benefit greatly from this. It is a nice way of attracting tourists here, although it is unfortunate for Canadians who are less able to travel abroad. However, perhaps they will travel a little more within the country.
    Let me congratulate you for the work that you have accomplished during the restructuring.
    I would also like to take the opportunity to tell my colleagues that we have a motion to debate regarding the appearance of the Bombardier representatives. We want to ask them about the billions of dollars that they will be receiving and about the company's financial situation.
    It is important for all the members of the committee and all the MPs to know why Bombardier needs $1.2 billion to be competitive and what type of assistance the company has requested from the Canadian government. I constantly hear the concerns of my constituents in Quebec about this issue. The workers and entrepreneurs of Beauce who pay their taxes hardly appreciate their taxes going to companies managed by millionaires. It is important that the committee look into this matter.
    To wrap up, I would like us to discuss my motion, which reads as follows:
That the Standing Committee on Industry, Science and Economic Development of the House of Commons convenes the company Bombardier Inc. to enlighten the committee on its financial position and explains the reasons that led it to request a financial assistance to the Government of Canada.

  (1620)  

[English]

     I think it would be very important to have this debate as soon as possible, because as you know, the government wants to go ahead with $1 billion in grants to a corporation. We call that corporate welfare. I think it is important to be able to have this debate as soon as possible.
    Well, your time's up, and this is a subject that we will take to the subcommittee— as we have discussed in the past—at which you are invited to spend the five minutes. Today we are talking with Destination Canada. We have already spoken to this motion, and we will speak to it in our subcommittee meeting.
    As you know, I'm not a member of the subcommittee.
    We've extended an invitation for you to speak to the subcommittee meeting.
    Thank you.
    Mr. Chair, on a point of order, I believe that a member is allowed to move a motion while they have the floor, and that motion is now on the floor accordingly.
     I apologize to members of the Destination Canada group. I apologize also for being late; I was stuck in the House. There are very pressing issues that need to be dealt with. There are very important items that I believe are also being debated in the House today and that are the responsibility of this committee to undertake.
    It's my belief, and I know it's Monsieur Bernier's belief, that as we go forward, it's something we should be working through around this table. It's something we should be taking on to provide good, strong advice to the government of the day, no matter what the party affiliation of the government. And I believe you will see that members of our committee are excited and want to be part of the solution when it comes to Bombardier.
    Also, through—
    On a point of order, is this counting against their time?
    I believe you don't have the floor, Mr. Longfield.
    I have a point of order.
    They've put a motion through. He has the right to say what he has to say.
    I will say, as per our own rules...future business, there are 48 hours. I would suggest that you submit your motion, as per our recommendations, and they will be—
    Mr. Chair, this motion has been submitted. It was submitted weeks ago. That is—
    And we are taking that up in subcommittee.
     On a point of order, are you saying that no new business, not a single piece of new business is going to be dealt with in this committee unless it goes through a subcommittee that only has five members? Is that correct?
    Mr. Nuttall, we have witnesses here to talk to. They are here. How about we give them the respect due to them, and let's deal with them while they're here?
    Mr. Chair, we're giving them respect by ensuring that the tax dollars they pay every single year are used wisely.
    Is it true that we cannot move a single motion without it going to a subcommittee that is half of this committee, yes or no?
    Excuse me. First of all, you need to speak to me in a better tone, please.
    It's an easy question, Mr. Chair.
    Don't take that tone with me.
    Number two, it's not an easy question. We've already discussed this. The subcommittee is for future business. That's where we discuss our future business. We've passed motions. We have voted on this.
    For you to be grandstanding at this point in time, while we have people who have nothing to do with Bombardier, is disrespectful to the people who are here right now.
    Mr. Chair, it is prioritizing the needs of Canadians. That's what it is. The needs of Canadians are jobs, growing the economy, ensuring that those businesses that are going through financial hardship are given their day in this committee. That is our job. That is our responsibility, Mr. Chair.
    Respectfully, the gentlemen and the lady who are here right now are contributing to this economy as well.
    I don't doubt that.
    We will deal with these folks at the moment.
    Mr. Chair, there is a motion on the floor. I understand that this is not an easy motion for people to deal with. I understand that it creates tension and it's difficult to go through. At the same time, it is something that is necessary. It is something that is needed. I know it is something that we care about on all sides of the House.
    Can we proceed with the motion at hand?

  (1625)  

[Translation]

    I have two questions, Mr. Chair.
    First, I see that Mr. Dreeshen has his hand up. There are four Conservative MPs who are speaking. Today, how many of them are allowed to take the floor? That is my first question.

[English]

    Sorry, I didn't hear your question.

[Translation]

    Mr. Chair, I was saying that there are four Conservative MPs on the other side and they are speaking. However, I think only three of them can speak here. Am I right?
    Mr. Dreeshen has his hand up, because he wants to speak. Which of the four Conservative MPs is not supposed to speak in the committee?

[English]

    There are only three.
    Mr. Chair, I was interrupted.

[Translation]

    There are three right now.
    Could you tell me which ones can speak? We have Mr. Nuttall, Mr. Bernier and Mr. Richards, correct?
    No. Mr. Richards has left.
    I have a second question: could this motion be put to a vote right away?

[English]

    Yes.

[Translation]

    So I ask that this motion be put to a vote right away.

[English]

    Mr. Chair, I actually had the floor. He actually can't ask for a point of order until he has the floor, which he doesn't because I was still speaking when he interrupted me and put his point of order forward. Until I'm done, I believe—
    Actually, I had given Mr. Arseneault the floor.
    Oh, so you had given him the floor while I was still speaking. That, Mr. Chair, is not within the rules.
    Mr. Arseneault called a point of order, so—
    It's a non-debatable motion.
    We have a motion on the floor. We shall put it to a vote.
    All in favour of Mr. Bernier's proposal—
     Mr. Chair, you can't actually call a vote. You can't force the vote on the motion. I was still speaking when it was taken over by Mr. Arseneault, which is okay, because I think you gave him the floor without my finishing what I was saying. We need to have some sort of decorum in this chamber.
    When we're looking at this and if we're going to call this to a vote, and it sounds like there's been a request of some kind, I think it's important that we speak to it.
    We're talking about a thousand jobs in downtown Toronto. We're talking about over 12,000 jobs altogether. We're talking about the livelihood of men and women in Quebec and Ontario who manufacture and who are suppliers for Bombardier who are being negatively affected by a decision to close an airport. This has thrust a company to a point where they're requesting a public bailout.
    I think it's important that we have the company come to this committee and that we have members of the government come to this committee and substantiate the rationale for interfering with the marketplace. I look at the member for Spadina—Fort York who has given many speeches on the subject. I would like him to appear here and give us the economic and financial rationale for such a decision.
    The Bombardier C Series, from what I understand from Bombardier, is much more environmentally friendly than the existing jets. It is a masterpiece of innovation. Its engines are not as loud in order to allow for airports in urban areas and for people to be able to go back and forth without disturbing those around.
    I think this is an important matter that needs to be discussed. It's so important that it's being discussed today in the House of Commons. Why the committee, the task force, on our economy would not take this into consideration is incredibly blinding.

  (1630)  

    Mr. Arseneault.
    Time for a vote.
    All those in favour of the motion placed by Monsieur Bernier?
     I just wanted to make sure there wasn't anything new in the motion.
    A recorded vote?
    (Motion negatived: nays 5; yeas 4 [See Minutes of Proceedings])
    The Chair: Thank you very much.
    We're going to continue with our questioning.
    Mr. Masse.
    Thank you, Mr. Chair, and thank you to our witnesses for being here.
    I appreciate the work that's been happening.
    I do have a few questions, and for some of them I'll look for a response for the full questions later on if that's okay.
    By the way, your commercials made me nervous because I did some of those things and I ended up with eight stitches on my face. True story, I just got elected in 2002 and had to go to my last city council meeting growing a goatee because of the facial scars that I had related to off-road biking.
    Mr. Masse, I can tell you that as a marketer I think it's cool stuff that we're working on, but as a father it scares me terribly.
     No, it's all good. I'm not blaming the trail. That's not the problem. I was lucky that I was well prepared with gear.
     At any rate, they're good commercials.
    One of the things I've had a concern with over the years is the movement of the CTC to Vancouver. At that time, it took place under David Emerson. I've always had a bit of a reservation about taking it out of the Ottawa region and putting it in another part of the country. I know that it was done in large part for the Olympics to promote international visitation, but what I've seen over the years—this is just my general impression—is the reduction of the connection to American visitation.
     We saw our numbers go down. For example, I saw border towns like mine not really having much connection to the Canadian Tourism Commission. Our local tourism does dual destinations with the Detroit region. We alone have 40,000 vehicles and 10,000 trucks per day crossing the border. That's one third of the entire Canadian economy going to the United States every single day—that's around $1 billion—within two kilometres of the Detroit River, which is in my riding, with four different crossings. I don't see much of a footprint for the Canadian Tourism Commission there.
     Further to that, I went through your guide. I see some really good information. It's good, but you mentioned going outside traditional regions, and when we look at it, we see that you still have Ontario represented by Ottawa in here. You have Banff for Alberta, you have the CN tower in two different pictures, you have Vancouver in here three times, and there are two pictures from Squamish that are identified. These are the iconic locations that we always see in commercials and so forth, and they are also in parts of your videos.
    I'll turn it back to you to give some input. Some 80% of our population lives near the U.S. border. For areas on the border, such as my riding, many of the citizens actually vacation in the United States. We're not aware of some of the efforts that are taking place elsewhere. I've grown more aware of that as a parliamentarian. Our natural edge is to go towards the south, not just into Michigan and that area, but to Florida, to Arizona, and all these destinations, yet we don't see much of a CTC footprint or much education going on.
    It's not just you. I can tell you that a number of times the Province of Ontario has left us entirely out of tourism initiatives, when we're the front door. In fact, as a city councillor I worked for years to try to get a sign welcoming people to Canada along our border. There's not even that. There's nothing when you come across Ambassador Bridge. I had a failed attempt to try to get a notation of “Welcome to Canada” and so forth. As well, there's not much on our tunnel. They actually closed our tourism office on Huron Church Road, where, again, you have 35,000 to 40,000 vehicles a day going by in one direction or another.
    What are the things we can do to improve, not only to keep Canadians here, but to give them better options and to better educate them about the fact that they are in Canada so that they're not just south of the border all the time? What are the plans to actually increase visitation into border towns?

  (1635)  

    Thank you for your bifurcated question. They're related. Let me try. I have an answer for the Vancouver piece.
    The answer to the second part of the question about what are we going to do in the U.S. is that it's going to roll out starting April 1. That is going to deeply involve many border communities. Many of them are going to be co-investing in this campaign with us.
    It's hard for me to be a Monday-morning quarterback on the decision that took place four years ago for the Canadian Tourism Commission to leave the U.S. market, but as some of the people around this table know, and as the former minister knows, it was something that the industry had a serious concern with, as did border communities from coast to coast to coast. We are trying to rectify that right now. Trust me: the border communities are going to be deeply involved in the U.S. campaign when it rolls out over the next year. It's a three-year campaign and they will be a very important part of the mix.
    As for our relocation to Vancouver, I guess it's been 10 years, so we never tire of the question.
    I've asked it many times too.
     I think I would give two perspectives on that.
    The first is that we are a global business. We operate in 12 different countries, in almost 25 different time zones. Given its nature, where our business is headquartered is not as important as the work that we do on the ground in the markets we're in, including here, domestically.
    As for the concern we know has been raised about the move to Vancouver kind of isolating the then CTC from the rest of the country—and Mr. Bernier referred to the restructuring that we've done—our management team is far more reflective of the country. We are spending far more time, and frankly a little more travel budget than we'd like, to get out to industry events in different parts of the country to interact with them. We've been working with the Tourism Industry Association of Canada on a series of town hall meetings across the country, and I think it's starting to resonate, because we see in Quebec and Atlantic Canada, for example, partnership increases in co-investment, which we haven't seen in many years.
    It's a project, Mr. Masse, that I know has been a concern. Our management team is quite seized with it, and I hope to be called back. A year from now I'm hoping to have an even better story for you on that front as well.
    As far as being headquartered in Vancouver goes, it's probably good for the country that crown corporations aren't all sitting in Ottawa. Whether or not Vancouver was the right decision at the time is sort of a moot point. We're in a global business right now, and it's as good a place for us to conduct business as anywhere else.
    I'm sorry if I—
    No, no, that was perfect. You've answered the questions and I'm grateful. Thank you.
    Thank you very much.
    Monsieur Arseneault.

[Translation]

    Thank you for being here, Mr. Goldstein, Ms. Sidhu and Mr. Verret.
    My first question is for Mr. Verret. My questions may be more pragmatic.
    According to the province's advertising, we know that New Brunswick has the best lobster, that we have the warmest waters north of Virginia and that the largest stands of maple trees are in Saint-Quentin, in my riding.
    The best maple syrup is in Beauce.
    Mr. Bernier, our maple stands are larger in terms of the number of taps.
    Joking aside, is there any kind of consultation with the provinces to minimize duplicate ads in order to attract people to all regions of Canada and to maximize the attraction for tourists? Is there a Canada-wide strategy established in consultation with the provinces?

  (1640)  

    Thank you, Mr. Arseneault.
    I am sure that Mr. Verret is an expert in the situation in New Brunswick.
    We have talked about these partnerships before. We have launched stronger and more relevant campaigns, which did not exist before. This was not just about adding the Canada brand. It entailed co-operation with all the provinces and territories, as well as with destination cities such as Moncton or other places across Canada.
    Gilles, would you like to add to that?
    Mr. Goldstein said that our consultations with industry and the events in which our partners participate, such as Rendez-vous Canada, enable us to have ongoing dialogue with those folks and to know what is happening on the ground.
    Business people and small and medium-sized businesses, which rely on tourism, share their concerns with us on a daily basis. That has been reflected in our ad campaigns and in the technology we use, mainly on digital platforms. We will probably still have traditional advertising in the future, but with digital tools, we can go further and target clients more.
    We will be able to promote the events in the provinces, territories and cities, such as the Foire Brayonne in Edmundston, in niche areas such as festivals or culinary events, like the ones in Newfoundland and Labrador, events that make people very proud. The willingness to work together is really there because we are increasingly listening to them; we hear them.
    Thank you.
    There is a host of visitors from the United States, the United Kingdom, France, China, and so on. Clearly, most visitors come from the United States, since we are neighbours. Having travelled a bit, I know that Europeans come here for a change of scenery. For them, Canada represents open spaces, forests, oceans and great rivers.
    Apart from the proximity and the value of the Canadian dollar, is there anything else that attracts Americans to our country? What do they find here that they do not have at home?
    There are dozens of reasons. Some people come here for nature. Others feel like they are in Europe without actually being there.
    In terms of digital campaigns, we decided not to have a campaign for all of the United States. Our campaign targets 19 million Americans who live in 12 or 13 American cities. That is a specific demographic. They are people who have passports. Our research indicates that they are thinking about going on vacation outside the United States. We have researched a particular demographic profile. That is why Mr. Verret said that we have had campaigns in niche areas that can target those consumers and that are very different from the traditional campaigns that we have had in the past five or six years.
    I have one last quick question.
    Have I answered your question?
    Yes.
    Let's talk about westerners who travel a lot. What do we have to do to catch up on the tourism front to attract them here? In what way are we lagging a bit behind?
    Are you talking about the west?
    I am talking about the western world.
    Yes, the western world, of course—
    Say Europe.
    In terms of the western world, we now have all the means at our disposal. There are common aspects, cultural aspects, so many things that can attract clients to come here for unique experiences.
    Getting indigenous people involved in tourism adds value to the Canada brand, which Mr. Goldstein mentioned. The whole issue of francophones outside Quebec, all the festivals available, everything will attract western clients. They will come to Canada more and more because we will attract them according to their interests.
    So we have to promote Canada's diversity more.

  (1645)  

    That's right.
    We have to capitalize on Canada's plurality and diversity.
    Thank you.

[English]

     That's it?

[Translation]

    Do I still have time?
    You have 1 minute and 30 seconds.
    No, that's fine.

[English]

    Take it.
     It clearly indicates that the United States has the highest number of travellers, but unfortunately these travellers stay in Canada for fewer days than those from any other country. As a low-hanging fruit, is there anything we can do, or is there anything you are planning to do, to increase that 4.5 to at least the average? There is no other country whose visitors spend fewer than 10 days here. What is the plan, if there is a plan, that increases that 4.5?
    To answer that question, the strategy is not to get them to stay longer. It is to get a higher-spending customer, one who may not stay longer but will spend more. This goes to the KPIs, or the way we measure. We're in discussions right now with StatsCan and others to find a better metric for what the customer is actually spending, because the average amount that an American spends here seems artificially low. The type of American visitor we're attracting through this campaign behaves a little more like a business traveller. They spend more per couple on an average day. The type of customer we're looking at in the U.S. spends a little more like a long-haul European or Asian customer. We have the additional benefit that this is a potential repeat customer, four or five times over.
    In the long run, these are much better customers for Canada. With digital technology, we can target them. Four or five years ago, we used fairly broad-based advertising, what they call “spray and prey”, hoping to catch the demographics because of the types of publications we were in. We can now reach out to the customers we want and attract them through the portal to the actual experiences and services and goods that they can buy here in Canada.
    Thank you.

[Translation]

    Mr. Bernier, you have five minutes.

[English]

    I'm going to share my time with Earl.
    Okay, Mr. Dreeshen, you're first.
     I would like to welcome the guests here today from the Canadian Tourism Commission.
    Certainly, some of the discussions you had were about the ratios with investments from outside compared to the government dollars that are associated with it. I think it's extremely important to recognize the ebb and flow that is there, whether it's the 1988 Olympics in Calgary versus 2010 and then the lead-up to 2017. To expect that to remain the same isn't particularly the way business is going to look at what takes place, so I think that's important. It's certainly a great goal. I think it's perhaps showing that, in the lead-up to 2017, everybody's engaged at this point in time, which is significant.
    I know that Brian was talking earlier about where the head office might be located, but in central Alberta we don't have a cross-border issue that we have to deal with. Of course, Alberta is more than just mountains. The Red Deer River that goes through my riding starts in the mountains and it goes down to Drumheller. It overlooks the valley and every once in a while I take a look at the sign that indicates that 10,000 years ago that area was under one kilometre of ice. Perhaps that might be a surprise to Leonardo DiCaprio. It's certainly something that people should realize.
    I'd like to ask you, though, about the small and medium-sized enterprises, where about 10% are in the tourism industry. How much are they able to participate in terms of engaging with their marketing expertise in your tourism industry?
    Obviously, this is the backbone of the sector. I would say—and I'm not sure if this is politically correct—that where it would merit a federal investment of public dollars would not be to support big multinational companies that do business in Canada. It would be to support the small and medium-sized parts of the sector that would have a very difficult time in and of themselves getting to export markets. We spend a lot of time talking about our advertising campaigns, but really the heart of our business, which is of special importance to me, is the trade show activity, or the trade commissioner function that we provide to help small and medium-sized businesses find those export markets.
    We not only do a big show here called Rendez-vous Canada, which moves around the country to different destinations, but we do a dozen or so international trade shows. Some of them are our own; some of them are other international groups that we work with.
    I just came back from a three-day show in Australia where there were very small providers, many of them from Alberta, who would not be able to get to that Australian customer, those travel agencies, those tour companies, on their own without the bridge that we help provide. Probably my favourite part of my job, quite frankly, is to spend time with those businesses and market.
    We would invite the committee to, first of all, come to see Rendez-vous Canada in Montreal in April, and where warranted, to come and see some of the work we're doing internationally, because that's the real platform and the real help that we provide. We're talking about thousands of small businesses across the country that participate in these programs, so that's of particular importance to us.

  (1650)  

    In your promotion, you have 11 countries that you go to, and that's where you have been emphasizing the importance of Canada. Have you determined that those are the best countries? Have you looked at it and asked if we are getting the kind of response that we could, or who's out there looking at some of the other areas? There are a couple in South America, but there are a number of others that are growing. Are we looking at it from a point of where are we getting the best bang for our buck?
    Absolutely, and this is again an area of pride for us. We've been considered one of the best-practice leaders in the world in this area. On an annual basis, we have a modelling exercise that is done in conjunction with Oxford Economics. It helped us build this economic model that goes through and triages countries based on a whole series of criteria including what's going on economically and what's going on with consumer spending. It uses IMF and various economic indicators to look at those markets, at where the spend is, and then, finally, where our impact could be because there are some markets, and I'll use perhaps the Netherlands as a good example, that always have a fairly healthy bilateral visitation between our two countries, and a campaign from Destination Canada may not actually move the needle. We go through that annually. That goes to our board and our shareholders for ratification, and that's how we go through our planning process.
    Thank you very much.
    We're now going to move to Mr. Baylis.
    I read the “Canadian Tourism Commission—Special Examination Report—2015”. It spoke very highly of your department. I wanted first of all to say congratulations. It sounds like you run a very tight ship.
    My predecessor can take most of the credit for that.
    Let him or her know what I think.
    One of the things that I read here is that in 2011 your board changed from a representative-based model to a skills-based model. Can you speak a bit about what that means? Was that a positive or a negative thing in your view?
    It was very positive.
    There was a time when what was then known as the Canadian Tourism Commission was almost like the League of Nations. There were 13 deputy ministers who sat on the board. It was a board of 45 people. It became very difficult to manage politically and there were many competing interests. It was sort of a club. I don't mean to be defamatory. It was a club of the deputy ministers and a bunch of the leaders in the tourism industry. It looked a little more like an industry association than a crown corporation board. I think the governance exercise was very useful. It's led us down the path of doing important work like gap analysis to make our recommendations.
    At the end of the day, the board is still appointed by the Governor in Council. It's been our experience that it is far more experience-based, for those who will actually make a contribution to our strategic deliberations as opposed to a collection of industry interests.
    Having the skills at the table made a difference, and also just having a proper type of board. That's what led to some of these great reports.
    That's right.
    I was also impressed with the way you collect KPIs, and so on. I noticed that over the last four years your budgets were cut significantly. I have numbers for 2014. Was there a correlation between the cuts in the budgets and the level of tourism, whether negative or positive? Did it make a difference? Were these cuts justified or not?

  (1655)  

    That's an excellent question. Do you have any other questions?
    Voices: Oh, Oh!
    Mr. David Goldstein: I take the glass half-full approach. I think we're a much more efficient organization than we were four years ago, and marketing has changed a great deal in the last four or five years.
    I'm not prepared to Monday morning quarterback any of the decisions that were taken by my predecessors. I think you also have to take into account that there were a lot of other special projects going on that went into that funding model including the Olympics, money for SARS relief, and economic development money that came through the last economic action plan.
    I think when you take it in its totality, it looks like it was a much larger piece. The actual A-based funding has diminished a bit, but not by the same proportion. We respond to the dollars that Parliament provides us. We put forward a plan to Treasury Board to invest those dollars as best we can. Hopefully, on the other side, we do what we can to have commercially relevant campaigns that are going to increase the other partner investment to maximize that as well.
    As we move towards that, I would say that we're probably spending or investing far more efficiently than we were three or four years ago.
    I guess that brought up your level, combined with your partnering.
    That's right.
    I agree with your idea not to use the low dollar as a panacea. I think it's smart that you have a long-term plan. Having said that, the dollar is low. Are we doing anything right now to take advantage of that opportunity?
    I'm not naive enough to say that it's not helpful, but it's not as helpful as people think. In fact, the acknowledgement of the difference in the dollar is very low in the U.S. right now. It's actually more impactful in some other countries like Australia, where they're going to make a decision between travelling to Canada or the U.S. based on the dollar issue.
    I joke, but the research bears it out. If you live 45 minutes south of the Canadian border, you don't know there is a Canadian dollar.
    I think that will gain traction, but I don't want us to ever put Canada on sale. I think there are selective opportunities that we can seize, maybe not as Destination Canada, but our commercial partners may wish to enhance certain opportunities because of the exchange rate. I, and our management team would never advocate, “Canada is on sale now. You should come.”
    To your point, that's only a short-term issue until we figure out what happens with the dollar two or three years from now. I think we've got an exceptional product to sell, even at par. You will see that the numbers actually started to come back even before the huge discrepancy in the Canadian dollar. I think there's a value play. It is a much stronger argument for us.
     Thank you very much.
    Now we're back to Mr. Dreeshen. You have five minutes.
    I will get an opportunity to ask the question I had wanted to bring up. It has to do with agricultural tourism. We have so many individuals, farm groups, and so on who talk about going down to Peru to try to find out about different things that are happening. I remember going to Europe 35 years or so ago with the same idea. I think it's something that's extremely significant. But we have so much to offer here in Canada, and we do it locally. We have different farm days in the province of Alberta. We have one where everybody goes out to find out where their local foods are and to see what sorts of things are there.
    I'd like to get an idea of where your focus is, if there is a focus on agricultural tourism, and if not, if there's some way it can be looked at. As well, when you take a look at your market research, have you been able to determine what the main spending allocations have been, both for Canadians as we go throughout the country and for non-Canadians. What are they spending the most on?
    If it's okay, for the second part of the question I'd rather get back to you in a detailed response in writing.
    Certainly.
    We do have some data. It's a little imperfect data on domestic spend, but we do have some data on that.
    As far as agricultural tourism is concerned, I had the great gift at lunch today to eat a piece of cod that was hand-caught at Fogo Island. To us, agricultural tourism is a really fascinating area that we see enveloping culinary tourism as well. I think there's a beautiful marriage there of culinary and agricultural tourism. We're working with a couple of different culinary groups right now on just that. I agree with you, it's a tremendous opportunity in all of our markets, not just the U.S. market, but also Europeans, Asians. I think there's a great deal.
    When we do our research, we see that Canada unfortunately isn't seen as very sophisticated from a culinary perspective, even though we are. It's something we're spending some time and attention on.

  (1700)  

    I think with the CETA and the TPP, it's another aspect of it. I remember being on a trade mission to London and speaking to distributors in Europe, looking at opportunities and how we can understand what is required in order to break into their markets.
    Part of it is just labelling and size, how you're going to sell it, and where you're going to sell it. Beyond that, it is how you make sure people recognize the quality you have, the excellent food safety program we have—the best in the world. I think that's a critical aspect.
    You indicated that you would like to bring the numbers in on where these things are coming from, but I wonder if you could just talk about it.
     Roughly, domestic spends less. It's a bigger percentage.
    Our biggest challenge is that pre-2002, Canada's split was roughly sixty-forty—60% domestic receipts, 40% international. It's now eighty-twenty.
    Obviously, it's new dollars to the Canadian economy, which is critical, but they will also spend more, so they're a higher yield customer.
    That's our legislated mandate, to look at export revenues, but it's also, I think, the most important piece for the Canadian economy.
    I think that's one of the other issues. We had spoken about trying to get the minister here as quickly as possible so we could talk about what the mandate letter is. Of course, you have your own that is going to be tied into what the expectations are, so hopefully that can happen soon and we'll be able to talk about the issues that are important there.
    Can I circle back to your point on trade, which I thought was very important?
    Deloitte released a report about two years ago—and we'll furnish it for the committee–that drew a direct line through econometric data that for every 1% increase we do in visitation to Canada, it leads to $820 million in additional trad, not just the dollars it stimulates in the actual visitation, but additional trade and investment. That is just the basic intuitive principle, that you do business with people where you visited or people you like and trust, and countries that have bilateral travel and tourism do exceptionally well.
    Within the context of other trade agreements or our main partners, to us, stimulating that bilateral tourism or that bilateral business travel is really important as well.
     Do you look at student exchanges as well? Those become another aspect if you're trying to get the correlation between someone else's country and our country. Could you perhaps comment on what you have going on in that?
    The short answer is yes, some of the small Canadian companies we work with are actually in the educational business. Not only are they good customers, they're great future customers as well.
    Thank you.
    Now we have Mr. Arya for five minutes.
    Going back to the Auditor General's report, the report recommended that you add a formal fraud risk assessment to your enterprise risk management process, which you agreed to do and planned to implement in the later part of 2015. Has it been done?
    Yes, it has. That's been filed as part of our corporate plan with Treasury Board.
    You know, 2017 is a big year, both for Canada and for Ottawa, because it is the nation's capital. I know personally that the City of Ottawa is investing quite a huge amount to promote the city of Ottawa as the place for Canadians and overseas visitors to come. Are you working with Ottawa Tourism so that you can synchronize marketing activities?
    Well, I had breakfast with the new president of Ottawa Tourism this morning, and I had a meeting with City Hall today.
    First of all, Ottawa Tourism is a very close partner of ours on a number of projects, in a number of markets. We have a 150th program, which we spoke of, that's going to be from coast to coast to coast, and Ottawa Tourism is one of the partners in that program as well. In the 150 vignettes, if you will, or experiences that we'll be canvassing across the country, I expect that almost everyone around this table, or the regions that they're from, will be represented in that campaign as well.

  (1705)  

    Looking at your marketing and sales expenses, I see that almost an equal amount has been invested in the core markets—the U.K., France, Germany, and Australia—and the emerging markets—India, Brazil, Mexico, Japan, South Korea, and China. I also see from your reports that the number of visitors from China is going up tremendously, with some 440,000. When I look at the emerging markets, those seem to be growing at a much faster pace. Do you think the spending on marketing and sales should still be at the same ratio?
    This dovetails with the previous answer. We actually spend a lot of time going through economic modelling on these issues. You also have to factor in the yield of that customer. When we crunch through the model, it really looks as though the best way to deploy our investment is with about 45% in the U.S., about 27% in Asia Pacific, about one quarter in Western Europe, and then that last 4% or 5% in Brazil and Mexico.
    We monitor that on an annual basis, knowing two things. First of all, you can't pull in and out of markets too quickly, because sustained marketing takes some time to get traction. There's a different visitor mix in some of those markets, so that some of them are more visiting friends and family, some of them are more doing business travel, some of them are more doing independent leisure travel. That figures its way into the mix as well.
    We also look at air access as an important piece of that. I'll use both China and India as an example. We've had fairly limited air access to those markets over the last few years, so even though the growth numbers, from a percentage basis, look pretty dramatic, the numbers themselves are not that dramatic because of the limits on the amount of air access available to us. We see in both those markets a tremendous increase in air access over the last 12 months, and probably going forward in the next 14 to 18 months, so that factors into our decisions there as well.
    I see that the visitor spending from China is $890 million by 447,000 travellers. From the U.K., it's 644,000 travellers with $911 million. It's almost as though the Chinese and the Japanese travellers or South Korean travellers are spending much more money when they visit here. I guess marketing to them is growing at a faster pace than that to the core market.
    It's a difficult decision to make. It's easy to say I love all my children, but we're trying to achieve a balanced market approach, or a balanced portfolio approach. That means not putting our eggs into too many baskets. Some destinations saw the growth by China and just put so much, a very high percentage, of their marketing budget into that market. We're trying to create a balanced approach, again based on where we think the best yield is.
     I'm sorry my answers are very long and I'm taking all of your time, but it's interesting and I think it's important for the committee to know that we're actually punching well above our weight in some of those mature markets. We're doing well in emerging markets, but you can look at a market like Japan. The outbound numbers from Japan are flat or up 1%, and for us they were up 6% last year, which means that Canada's actually growing market share.
    It's the same with the U.K., and we're getting almost record numbers out of France right now. Those are very high-yield customers, so we're doing our best to create a balanced portfolio approach with your investment, and the investment of our co-investors, to achieve the best results we can.
     Our final question goes to Mr. Masse. You have two minutes.
     Mr. Goldstein. I really respect your work. We've worked before on different issues related to your different portfolios.
    I just want to challenge you to think about a couple of things when you go away from here. I looked at your board of directors. There are two each from Toronto and Niagara Falls, and one each from St. John's, Vancouver, Banff, Richmond, which is next to Vancouver, Ottawa, Whitehorse, and Quebec City.
     Then your brand experiences committee has three from Toronto, one from Winnipeg, one from Halifax, and then the other ones aren't noted in here. I know you went from 45, which is rather unruly—and I think that was a good move, by far—but you're down to 11. I would just suggest that this is not representative. I'm not saying these people aren't qualified.
     I would argue this. Let's take the example, of the Western Hemisphere Travel Initiative for passports. Generally speaking, 30% of Americans won't get a passport for privacy reasons.
     Do they know about my region where we had the War of 1812? We were in the front lines of the Underground Railroad, the rum runners, and all those different things. We see nothing from the Canadian Tourism Commission.
     Also, I would disagree with you about the low Canadian dollar. Actually, we need to be quick in acting on that, because our casino numbers are up significantly again. It wasn't by any federal fault. We were promised a new casino. We watched the Detroit regime being built up of three, and we finally got into the game again for the second time, but far after the damage was done.
    Also, cross-border shopping goes down, for sure, and then we do have Americans coming, because they're visiting here, and we have a lot of Canadians who are staying home. My dad is one of them; he was in Florida. They're coming back earlier. They're spending less money there.
     I would just argue that at some point in time to consider consulting with some of those communities that are right along the border. Niagara Falls, obviously, is there, but they're weighted heavily in your group here, in my opinion.
    Again, I'm not saying that these people do not have the experience or capabilities of understanding that, but I'd just question that, because we really haven't had much of a CTC presence in my riding for a long number of years. That's not to criticize the previous administration either. I'm just giving you the facts.

  (1710)  

    On the larger issue of the American market, that takes a long time.
    Let me talk about the representation issue, because our board is regularly under renewal. There are two vacancies right now. And the Governor in Council is well aware of that. We welcome diversity, regionally and otherwise, on the board.
    For the committee structure, what you don't see in that report, because it's just been done this year—and that is last year's report—is that we have actually changed the committee model. We've broadened it so there are now four committees. The membership of the committees has increased by 20%. We have tried to be far more representative of different parts of the country and, I would say, more representative of small and medium-sized businesses from across the country.
     You've asked me to consider that. Consider it considered. It's something we've actually been working on quite actively, because it's an important part of our annual planning process. Consider the point well-taken.
    Thank you very much. That concludes our question period.
    I want to thank you for coming down, and, again, I apologize for our being late. I realize that we're all passionate about the things we believe in over here. Hopefully we've made an impression on you as much as you've made an impression on us.
    Mr. Chair, thank you very much for the opportunity. As I said in my opening statement, we're very glad to come back at any point in time within whatever study context the committee would like to hear from us.
    Thank you very much.
    This meeting is adjourned.
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