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Government revenue attributable to tourism
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Tourism generated $19.7 billion of revenue for governments in Canada in 2007, up 4.3% from 2006. The gain was driven by higher revenues from domestic tourism spending, as the revenue related to spending by international visitors was down.
Government revenue attributable to domestic tourism rose 6.1% to just over $14.5 billion. The revenue due to spending by international visitors was down 0.6% to $5.1 billion.
The share of governments' revenue attributable to international visitors declined from just over one-third in 2000 to about one-quarter in 2007. This reflects the decline in the international share of tourism spending in Canada over the same period.
Taxes on products, such as the Goods and Services Tax (GST) and provincial sales taxes, were the single largest source of tourism revenue for the federal and provincial/territorial governments.
These taxes accounted for $4.7 billion for the federal government in 2007, 50% of its revenue from tourism. Provincial/territorial governments collected $5.5 billion, 60% of their tourism revenue, from this source.
These tax revenues rose 2.7% in 2007, the second consecutive year of weak gains. The weakness reflected the one-percentage point reduction in the GST that took effect on July 1, 2006.
Note to readersEstimates of the government revenue directly attributable to tourism have been updated to 2007 and revised for 2000 to 2006. In addition, the government revenue attributable to tourism spending by non-residents (i.e., tourism exports) and by residents (i.e., tourism domestic demand) are presented separately for the first time. The classifications of industries and commodities used in the study have also been harmonized with those of the Canadian Tourism Satellite Account and the National Tourism Indicators. About 85% of government revenue from all sources is included or considered in-scope, the same as in the past two releases. Revenue is net of input tax credits to businesses, in particular for the Goods and Services Tax (GST) paid on business travel, and net of rebates of the GST to visitors from other countries. This report was funded by the Canadian Tourism Commission. |
Taxes on employment income and business profits were the second most important source of tourism revenue for both the federal and provincial/territorial governments.
Income taxes directly attributable to tourism rose 9.4% in 2007, reflecting gains in both personal and corporate incomes and associated taxes.
These taxes brought in $3.0 billion for the federal government and another $1.9 billion for provincial/territorial governments.
Other taxes such as property and capital taxes, levies, license fees and permits, were the chief source of tourism revenue for municipalities. Tourism generated $0.9 billion through these taxes for municipal governments, representing 78% of their tourism revenue.
International visitors generate more revenue for governments, for every $100 of spending
Governments took in $31.58 for every $100 of tourism spending by non-residents in Canada in 2007, compared with $26.61 for every $100 of spending by resident tourists.
The difference reflects the fact that Canadian businesses receive input tax credits for the GST and in some instances provincial sales taxes on business travel expenses. This effectively lowers the tax paid by resident tourists, who include Canadian business travellers.
It also reflects differences in spending patterns between resident and international visitors, with the latter spending more on more highly taxed items, most notably recreation and entertainment (which includes casinos).
Taxes on products accounted for about 40% of the difference, with international visitors paying $15.82 in these taxes for every $100 of their spending in 2007, almost two dollars more than residents.
Definitions, data sources and methods: survey number 1910.
The paper "Government revenue attributable to tourism, 2007" is now available as part of the Income and Expenditure Accounts Technical Series (13-604-MIE2008060, free), from the Publications module of our website.
For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640; iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.
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