Detailed results by industry and commodity, 2008

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This section will concentrate on the shares and proportions of each industry or commodity, which reveal more on the underlying structure of revenue due to tourism. Taxes on products (final sales) are discussed separately because they are classified by commodity, whereas revenues from other sources are classified by industry. As mentioned earlier, results by industry and commodity are only available for the years up to 2008 (see Appendix B).

Table 6 (column 3) shows the tourism share, by industry, of all sources of government revenue except taxes on products. At the total economy level, tourism generated 2.3% of the revenue from these sources in 2008.  The tourism share of government revenue differed significantly between tourism and non-tourism industries.

Among tourism industries, the tourism share of taxes on income, production and contributions to social insurance plans (see column 3) ranged from a low of 10% in water transportation to a high of 92.2% in travel services. This means that 10% of government revenue from water transportation was directly attributable to tourism activities. Likewise, 92.2% of revenues from travel services came from tourists.

On average, 36% of government revenue from tourism industries was directly attributable to tourism, while only 0.7% of government revenue from non-tourism industries was due to tourism. It might be noted that non-tourism industries are a source of tourism tax revenue insofar as tourists purchase some of the commodities they produce (e.g., vehicle fuel, camping equipment, clothing, tobacco and alcohol, and so on).1 Conversely, not all government revenue from tourism industries is directly attributable to tourism activities.

Table 6 Government revenue attributable to tourism, by industry, 2008

Looking at the distribution of government revenue from all sources, except taxes on products (column 4 of Table 6), only 4.6% came from tourism industries. However, examining the distribution of the revenue that is due to tourism (column 5), 70.6% originated from the tourism industries, with 29.4% from the non-tourism industries. Accommodation and transportation accounted for about two-thirds of government tourism revenue from tourism industries.

The last two columns of Table 6 show the distribution of government revenue attributable to tourism spending by resident and non-resident visitors to Canada. It is noteworthy that the share due to air transportation and travel services was considerably higher for domestic spending compared to tourism exports. The reverse holds for several industries, most notably accommodation and recreation and entertainment. These results simply reflect the fact that Canadians spend more of their tourism dollar on air travel with Canadian carriers and on travel arrangements with Canadian travel agents than do non-resident visitors, whereas non-residents spend relatively more of their tourism dollar in Canada on accommodation and recreation and entertainment.

The detailed results for taxes on products (final sales) in 2008 are shown in Table 7. The share of total government revenue (taxes on products in this case) directly attributable to tourism spending is shown in column 3. Among tourism commodities, these shares (or ratios) ranged from a low of 4.1% for vehicle repairs and parts to a high of 100% in the case of pre-trip expenditures. This means that only a small fraction of the product taxes (e.g., GST, PST) collected on motor vehicle repairs and parts was directly attributable to tourism, while the remaining 96% was due to non-tourism spending (i.e., local consumption). Also, pre-trip expenditures (spending on motor homes, travel and tent trailers, luggage and travel sets, tents and camping equipment and sleeping bags) is entirely attributed to tourism, as are the related product taxes.

The share of taxes on products (final sales) due to tourism among tourism commodities averaged 24.8%, while 6.3% of the product taxes on sales of non-tourism commodities stemmed directly from tourism spending.2

Table 7 Government revenue attributable to tourism, by commodity, 2008

Looking at the distribution of taxes on products overall (column 4), some 30% of government revenue from this source came from spending on tourism commodities. Considering only the revenue that is directly attributable to tourism, however, this share jumps to 63.3%. This simply reflects that tourists spend more of their budget on tourism commodities than do non-tourists.

Among the tourism commodities, vehicle fuel (18.0%) and recreation and entertainment (18.5%) were by far the most significant sources of product taxes directly attributable to tourism. Not only do tourists spend a disproportionate share of their budget on these items, compared to non-tourists, these items are relatively highly taxed. Product taxes on vehicle fuel include not only sales taxes but also excise taxes, while product taxes on recreation and entertainment include as mentioned earlier the profits of government-run casinos, lotteries and other gaming enterprises.

Again, the distribution of revenue attributable to tourism reveals very different patterns depending on whether the revenues stem from spending by resident or non-resident visitors. The most notable differences arise in the cases of vehicle fuel, recreation and entertainment, and non-tourism commodities.


  1. See Canadian Tourism Satellite Account Handbook, Statistics Canada catalogue no. 13-604-M, no. 52, available for free from
  2. The tourism share of taxes on accommodation services (68.9%) in Table 7 is much lower than the tourism share of spending on this item (91%) in the CTSA 2004. This is because the former relates to accommodation services supplied by all industries, while the latter relates to those supplied by the accommodation industry alone. This makes a difference because a significant portion of “accommodation services”, defined in the CTSA to include several outputs of the accommodation industry (e.g., room nights, laundry and dry cleaning and other personal care services), is produced outside of the accommodation industry, only a small fraction of which is purchased by tourists.
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