Government revenue attributable to tourism

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Government revenue attributable to tourism activities in Canada declined 3.7% to $19.2 billion in 2009. This was the first decrease since 2003.

Most of the decline stemmed from a drop in revenue directly related to tourism exports, which fell 9.6% to $4.3 billion. Tourism spending by international visitors fell 12.8%, as travel from both the United States and overseas countries declined in 2009. Revenues from domestic tourism spending declined 1.8% to $14.9 billion, the only decline on record (which dates back to 2000).

Tourism generated $8.8 billion in revenues for the federal government in 2009, down 5.0% from the previous year. Just over $9.1 billion went to the provincial/territorial governments, down 2.3% from a year earlier. Another $1.2 billion went to municipal governments.

Over half of the government revenue from tourism, or $9.8 billion, came from taxes on products such as the Goods and Services Tax (GST) and provincial sales taxes in 2009. About $4.4 billion was generated through taxes on income from employment and business profits.

Another $2.5 billion was raised through other taxes on production and intermediate inputs, while contributions to social insurance plans amounted to $2.0 billion. Government sales of goods and services to tourists added $458 million.

For every $100 of spending, international visitors generated more revenue for governments than resident tourists. Governments took in $30.51 for every $100 of tourism spending by non-residents in Canada in 2009, compared with $26.81 for every $100 of spending by resident tourists.

The higher amount for international visitors is partly due to the fact that they spend relatively more on recreation and entertainment, including casinos, and on non-tourism commodities, such as alcohol and tobacco, which are relatively highly taxed.

Also, Canadian businesses receive input tax credits for the GST and in some instances provincial sales taxes on business travel expenses, which lowers the effective tax paid for resident tourists, which includes Canadian business travellers.

Note: Estimates of the government revenue directly attributable to tourism have been updated for 2008 and 2009 and revised for 2003 to 2007. 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, when applicable. This report was funded by the Canadian Tourism Commission and is part of a suite of products relating to tourism including the National Tourism Indicators and the Tourism Satellite Account.

Definitions, data sources and methods: survey number 1910.

The paper "Government revenue attributable to tourism, 2009" is now available as part of the Income and Expenditure Accounts Technical Series (13-604-M2010067, free) from the Key resource module of our website under Publications.

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.