Aim and scope of measurement

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In 2011, governments in Canada collectively took in $659.5 billion (on a national accounts basis), up 5.5% from 2010. Taxes on incomes account for the largest share of government revenue (about 38%, see Table 1). Other taxes on production, mainly property taxes, and taxes on products, such as the Goods and Services Tax (GST) and provincial sales taxes (PST) accounted for 30% of all government revenue. The remainder came from employer and employee contributions to social insurance plans, other current transfers from persons to government, government investment income and government sales of goods and services.

Table 1 Sources and distribution of total government revenue, 2011

How much of these various sources of revenue stem from tourism? The study aims to address this question through its estimates of the portion of government revenue that is directly attributable to tourism. The qualifier “directly” is important. It means that only those tax revenues related to the production and sale of goods and services purchased directly by tourists are included. Taxes paid by the suppliers of the intermediate inputs (e.g., manufacturers of linens for hotels, refiners of fuel for aircraft) to these goods and services are not directly attributable to tourism and are not included.

It is important to note as well that the estimates up to 2008 reflect the detailed tax structure (by industry and commodity) in effect in each of these years. However, for 2009 to 2011, only preliminary information on revenue totals for the different sources of revenue by level of government was used. The introduction of new taxes and changes in tax rates (e.g., the inclusion of Ontario and British Columbia in the Harmonized Sales Tax program, increases in the Air Travellers Security Charges and in various fuel-, tobacco- and alcohol-related taxes)1 in recent years are reflected in these totals.

Table 2 Coverage of government revenue, 2011

The study covers (i.e., takes into account) the main sources of revenue to government, from both tax and non-tax sources, from both the business and non-business sectors of the economy. Table 2 above summarizes the study’s coverage for 2011. Overall, 86% (or $566.3 billion) of the revenue from all sources of all three levels of government was covered in 2011.

The study covers about 89% of income taxes (or $226.4 billion in 2011) including those on earnings from employment in the business and non-business sectors of the economy, profits of corporations and government business enterprises, and on net income of unincorporated businesses. It includes all other taxes on production, mainly property taxes, and all taxes on products, including the GST,2 PST and other sales taxes, fuel taxes, import duties and taxes, and excise taxes on tobacco and alcohol (see Appendix A for a complete list). Other taxes on production and taxes on products totalled $200.6 billion in 2011.

The study also covers 100% of contributions to social insurance plans, which amounted to $80.0 billion in 2011. These include employer and employee premiums for Employment Insurance, the Canada and Quebec pension plans, and employer contributions to workers’ compensation plans. Revenue from government sales of goods and services is also covered in its entirety. This includes museum, camping and park entrance fees, among a number of other miscellaneous charges.

As mentioned above, some sources of government revenue are excluded here because their tourism content is unknown and difficult to estimate. Government investment income, which includes remitted profits of government business enterprises and other interest and dividend income and royalties, is not included.3 Also excluded are taxes on non-employment income of persons (e.g., investment income) and most withholding taxes4 on non-residents’ income in Canada. Other current transfers from persons to government, like hospital and medical care premiums, are excluded as well.

Altogether, the excluded items accounted for 14.1% of total government revenue in 2011. A more complete coverage would no doubt raise the estimates of the revenue due to tourism in total and on a revenue-per-dollar of spending basis. On the other hand, the excluded sources are considered to have relatively low tourism content, so that their inclusion would only lower the share of revenue generated by tourism.5


  1. See Appendix B, section c.
  2. Revenue from GST is net of input tax credits to businesses (in particular for GST paid on business travel) and net of rebates paid out to visitors from other countries.
  3. An exception is made in this case for liquor control boards and provincially-run lotteries and gaming enterprises. By convention, profits of these enterprises are treated as taxes on products and therefore included in the study. These profits translate into significantly high taxes on products, most notably on recreation and entertainment that are purchased by tourists.
  4. The small percentage of withholding taxes included in the study reflects taxes on wage and salary income earned by non-residents in Canada.
  5. This was evident in the comparisons of the study for 1998 with the one for 1992. See Government Revenue Attributable to Tourism, 1998, Statistics Canada catalogue no. 13-604-MIE, no. 41, available for free from
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