The Regional Municipality of Halton. Chair and Members of the Administration and Finance Committee
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1 Approved - Administration and Finance - Jun 16, 2010 Adopted - Regional Council - Jun 23, 2010 The Regional Municipality of Halton Report To: From: Chair and Members of the Administration and Finance Committee Mark G. Meneray, Commissioner, Legislative and Planning Services and Corporate Counsel Date: May 25, 2010 Report No. - Re: LPS Update on the Halton Tourism Implementation Project and Ontario's new Regional Tourism Organizations RECOMMENDATION REPORT THAT Report No. LPS57-10 re: Update on the Halton Tourism Implementation Project and Ontario s new Regional Tourism Organizations, be received for information. The goal of this report is to provide Council with an update on the Halton Tourism Implementation Project and an overview of the new Regional Tourism Organizations (RTO)s which are being established by the provincial government. Previously, Council approved Report No. LPS57-09 re. Halton Tourism Advisory Committee Annual Report and Tourism Funding Agreement and thereby endorsed the Advisory Committee s workplan. Council also authorized the execution of a funding agreement with the Minister of Tourism to allow the Region to undertake the Halton Tourism Implementation Project comprised of research into the economic impact of tourism in Halton, benchmarking of Halton s tourism performance and support relative to peer municipalities and a framework for ongoing tourism advocacy and awareness. The Halton Tourism Advisory Committee was established through Council s approval of Report No. CS re. Halton Region Premier Ranked Tourist Destinations Project (PRTD) Final Report in September The Advisory Committee began its meetings in early 2008 and is chaired by Mayor Cam Jackson. Oakville Regional Councillor Keith Bird is Council s other appointee to the Advisory Committee. The Halton Tourism Advisory Committee s term expires November 30, The goal of the Halton Tourism Advisory Committee is to advise and assist the Region with respect to tourism issues and provide input on the implementation of tourism initiatives by the Region in conjunction with its Local Municipal tourism partners. The Advisory Committee provides a forum for Halton tourism stakeholders to discuss tourism issues and opportunities at a regional level, and as will be discussed later in this report, the Advisory Committee has been the vehicle to ensure that these stakeholders are kept apprised of and provide feedback on the Ministry of Tourism s implementation of new Regional Tourism Organizations. 1
2 One of the principal actions in the Advisory Committee s work plan, and a key recommendation that arose from the original Premier Ranked Tourist Destinations Project was to undertake a consulting study the Halton Tourism Implementation Project to help the Region and Halton Local Municipalities better understand the economic impact and importance of tourism to their specific jurisdictions. The Halton Tourism Implementation Project has been completed and the PowerPoint presentation deck highlighting the research findings are found in Attachment #1 to this report. PKF Consulting, a well known tourism consulting firm was retained to conduct the research for the Halton Tourism Implementation Project. The Halton Tourism Implementation Project included the following components: A) Municipal Statistics - This section of the report focused on: Visitor Statistics visitation and spending with multi-year comparisons from 2003, 2004, 2005, 2006, and any new information; Economic Impact - focused direct / indirect spending, employment, tax implications and other economic indicators; and Social Impact Quality of Life, Community facilities, events, employment mix and other impacts. B) Municipal Adaptation of Halton PRTD Framework The results of Halton s PRTD project and findings related to Product, Performance and Futurity were reviewed. Halton s PRTD business and survey data were revised, updated and reformatted to ease use and analysis by Halton and its Local Municipal tourism partners. C) Funding Models / Competitive Assessment This component of the project provided a comparative assessment regarding tourism support and best practices in relevant and comparable destinations (municipalities) in the Greater Golden Horseshoe area. D) Municipal Tourism Advocacy Each of the Halton Local Municipalities received a customized PowerPoint slide deck particular to the jurisdiction with key information on Global, National and Provincial trends, and the economic and social impacts of tourism. E) Advocacy and Communications The final section of the project addressed communications and key messages for target audiences including tourism industry stakeholders to enhance awareness, support and recognition for tourism in Halton. 2
3 Highlights of the Halton Tourism Implementation Project International, National and Provincial Trends International travel declined somewhat in 2009 with the economic crisis and H1N1, but was still relatively strong Tourism industry is significant in Canada - a $75 billion industry Accounts for 1.86 million jobs in Canada (11% of national employment) Ontario leads all provinces in tourism visits and expenditures Visitation to Ontario still below 2003 levels Halton s Comparative Tourism Positioning Halton has a reasonable base of tourism products that make it comparable to other GTA regions e.g. Durham, York. Overall funding support for tourism in Halton is comparable with peer municipalities including York, Waterloo and Mississauga. Tourism Burlington s Destination Marketing Fee (borne by its accommodation sector) has historically been a key contributor to overall tourism funding levels in Halton 2008 Halton Region Visitor Statistics 3.1 million tourists came to Halton Region in 2008 Visitor spending is growing, up 11% from 2007 reaching $287.2 million spent in 2008 Of the total visitors, 2-in-every 3 were same-day excursionists and 1-in-every 3 spent at least one night in Halton. Visitation is relatively evenly spread among Oakville (30%), Burlington (40%) and the Halton Hills/Milton area (30%). In 2009, the Halton accommodation market achieved 51.8% occupancy, at an average daily room rate (ADR) of $100.22, which are both lower than Ontario averages of 57.1% occupancy and ADR of $ Economic Impacts of Tourism in Halton The $287.2 Million spent by visitors in Halton in 2008 generated about $123.7 million in direct economic activity (GDP) in Halton About 2,400 direct jobs in Halton were generated as a result of visitor spending here (i.e. about 1% of Halton s labour force), with further jobs created outside the region. Visitor spending in Halton generates $131.1 million in taxes (direct, indirect, and induced) province-wide, including $4.2 million at the municipal level. Social Impacts of Tourism in Halton Tourism provides investment in sustainable community development through tourismrelated infrastructure Tourism produces more attractive surroundings for residents as a place to live, work and play and helps to instil a sense of pride in the Halton community. 3
4 The findings of the Halton Tourism Implementation Project indicate that tourism is a significant economic sector in Canada and Ontario, and it now rivals many of our traditional resource industries in terms of jobs and contributions to GDP. The project findings underscore the fact that Halton is a growing tourism market, and is seeing increases in visitor spending and an attendant increase in economic impact in the form of direct job creation and property taxes collected. The fact that tourism can also make a strong contribution to allied goals of community building and quality of life makes it an important industry in Halton now and in the longer term. Update on Ontario s New Regional Tourism Organizations (RTO)s In February 2009, the Ontario Ministry of Tourism released its Tourism Competitiveness Study. Some of the principal recommendations coming out of the study include establishing new tourism regions across Ontario to support augmented tourism development and marketing activities and the standardization of Destination Marketing Fees (DMF) across the province. Destination Marketing Fees are a fee on the room portion of a hotel bill used by a local tourism marketing organization (i.e. a Destination Marketing Organization) to promote their area as a destination by developing marketing campaigns and spurring further visitation. Many of Ontario s hotel rooms are already subject to a DMF, and a DMF is in place in sixteen Ontario destinations. The ability for DMO s to levy a DMF dates back to the Ontario government s decision in the late 1980s to set a Retail Sales Tax (RST) of 5% on transient accommodation (i.e. hotel rooms) which was 3% lower than the 8% level established for most taxable goods and services. This was done to maintain Ontario s attractiveness and competitiveness as a destination for non-ontario visitors. While the 3% differential on RST originally gave rise to the DMF, the March 26, 2009 provincial budget introduced sales tax reform with the decision to harmonize the RST with the Goods and Services Tax (GST) through the federally administered Harmonized Sales Tax (HST) effective July 1, As a result, the 3% differential on hotel room accommodation is eliminated. The budget proposed allocating $40 million of the incremental revenue associated with the 3% difference in tax rates to the new regional tourism organizations recommended in the Tourism Competitiveness Study, once the new regions are established. During the spring and summer of 2009 the Ministry of Tourism consulted with tourism stakeholders across Ontario to discuss the boundaries and focus of the new regional tourism organizations and potential roles and responsibilities. On December 18, 2009, the Ministry of Tourism announced the creation of thirteen new RTOs in Ontario. With that announcement, Halton Region and its constituent municipalities of Burlington, Halton Hills, Milton and Oakville are now part of the RTO #3 region. Also included in the RTO #3 region is the City of Hamilton, County of Brant, the City of Brantford and the Six Nations of the Grand River Territory and Mississaugas of the New Credit First Nations. 4
5 On January 27, 2010, the Ministry of Tourism and Culture issued a Request for Expressions of Interest for tourism organizations to submit proposals to create an RTO for each of the Regions by March 1, Halton Region and its four Local Municipal tourism stakeholders worked cooperatively with their RTO #3 partners in the submission of an Expression of Interest to establish the new RTO #3 organization. The completed EOI for RTO #3 was submitted to the Ministry by the deadline date of March 1, The submission for RTO #3 was informed by a strategic planning session with municipal and DMO stakeholders from across the RTO #3 region. It was, and is, vitally important to all RTO #3 stakeholders that the creation and funding of a new RTO will enhance tourism investment in the broader region, not duplicate the investments and efforts already underway by existing tourism organizations and tourism businesses. Based on Ministry consultations and feedback, it is widely viewed that the new RTOs, including RTO #3, will be able to perform functions that local DMOs, chambers of commerce and municipal economic development offices have been unable to undertake on their own due to resource and funding constraints. Also arising from the strategic planning session, are the following considerations for the new RTO #3 in terms of Vision, Mission and Principles: Vision: RTO #3 s area will be recognized as a distinct tourism destination; and the tourism sector as a leading economic driver for the area by The date 2020 was identified in order to provide adequate time for the new organization to develop and evolve, for its investments to bear important economic outcomes and in accordance with the target dates set out in the Ministry s Tourism Competitiveness Study. Mission: RTO #3 is an industry partnership committed to collaborative development initiatives that establish the region as a distinct tourism destination through: Product development of authentic and diverse tourism experiences that generate increased day and overnight visitations and revenues Opportunities to increase industry capacities, revenues, and viability Building recognition of tourism as a leading regional economic driver and employment generator; and Advocacy initiatives on behalf of the tourism industry s development and investment Principles: Representative of the whole region Strategic & Collaborative Building Industry Capacity Innovative and Sustainable Transparent and Accountable 5
6 In terms of provincial funding of the RTO structure, it was noted above that the province will be allocating $40 million for each of the next two years to be divided among the thirteen RTOs. The Ministry has also announced that an additional $25 million per year of transitional funding for the next two years will be available to replace the existing DMF collected in certain jurisdictions. Burlington and Hamilton, the two Region #3 Destination Marketing Organizations which had previously collected DMF from the accommodation sector in their respective municipalities, will receive some of this transition funding until March 31, With respect to future funding of the RTOs, the fall 2009 budget bill included an amendment to the Retail Sales Tax Act that would allow for the collection of a Regional Tourism Levy (RTL) by Each of the new tourism regions would collect the RTL if the majority of roofed accommodation providers agreed to the levy. The RTL could be up to 3% on room rate and would be remitted to the province and then directed back to the new tourism regions. The mechanics and details of the RTL are still being worked out and have not yet been formally announced. Status of the Expression of Interest and Next Steps Representatives of RTO #3 met with Ministry of Tourism officials on April 8, 2010 and were advised that the EOI had been accepted. Ministry officials were pleased with the level of detail on the RTO s vision, mission and principles and the spirit of cooperation among the RTO #3 partners. The RTO #3 EOI submission included the creation of a task force including representatives from the broader region s tourism industry, DMO and municipalities. The task force would be responsible for the further development and implementation of the proposed work program to start-up RTO #3. This would be a two-pronged approach with the task force pursuing the key organizational development tasks and functions, and developing various elements of the organization s structure, strategy and activities and completing selected priority projects. The task force would give way to the establishment of a permanent Board of Directors that would finalize a Strategic Business Plan for RTO #3. The Ministry is interested in working with RTO #3 stakeholders to expedite the RTO #3 structure and incorporation in order to flow support to the new organization and to have it move forward on priority projects during the first year of funding. The Ministry has developed templates to use for terms of reference, transition plan and budget and these will be completed and submitted in June The RTO #3 task force has given consideration to a list of priority tourism projects for RTO #3, which include an Autumn-Winter marketing campaign, development of a region-wide photo and video library and War of commemoration product development and marketing. These priority projects were discussed with key RTO #3 stakeholders on April 21, 2010 and a further refinement of these priority projects will be undertaken in June with all RTO #3 tourism stakeholders. 6
7 Conclusion The Halton Tourism Implementation Project notes that tourism is a significant economic sector nationally and provincially, and tourism is rising in Halton in terms of visitation, visitor spending and overall economic impact and importance. As a destination, Halton has a similar level of tourism product, and a similar, though more uneven, level of funding support as peer municipalities such as York and Waterloo Regions and the City of Mississauga. The research also indicates that tourism helps contribute to community building and quality of life, as the same community infrastructure that is beneficial to residents is attractive to tourists. With the Ministry of Tourism mandating new regional tourism regions across the province, Halton Tourism Advisory Committee members and Halton Region Economic Development have been proactive in providing input into the establishment of a Regional Tourism Organization for the RTO #3 area comprising Halton, Hamilton, Brant County, Brantford and the Six Nations of the Grand River Territory and Mississaugas of the New Credit First Nations. The establishment of a new RTO is widely expected to bring rise to new tourism opportunities as there will be enhanced provincial funding allocated on a pan-regional basis for marketing campaigns, product development, training and research. The RTO will be shaped so that it performs functions and takes on initiatives that tourism stakeholders across the RTO #3 area have not been able to undertake on their own due to funding and resource constraints. At the same time, it is important that there is both ongoing municipal support for tourism in Halton and strong stakeholder support, including the region s accommodation sector, so that the entire Halton community can take part in and benefit from the new RTO structure. In the near term, Halton Region Economic Development will continue to implement the priorities that are contained in the Halton Tourism Advisory Committee work plan. As Council will know, the end of term review for the Halton s Advisory Committees, including the Halton Tourism Advisory Committee will be reported to Council in September At that time, more will be known in terms of the nature and role of the Halton Tourism Advisory Committee in the context of the new RTO #3 structure. FINANCIAL/PROGRAM IMPLICATIONS There are no financial or program implications associated with this report. RELATIONSHIP TO THE STRATEGIC PLAN Theme 4: Goal 3: Promote and Strengthen Economic Growth and Prosperity Create an environment to retain businesses and attract strategic businesses to Halton 7
8 2010 Actions: 3b) Implement the Region s Tourism Development Action Plan through the work of the Industry Development, Product Development and Advocacy subcommittees of the Halton Tourism Advisory Committee. Respectfully submitted, John Davidson Director, Economic Development Mark G. Meneray Commissioner, Legislative & Planning Services and Corporate Counsel Approved by Pat Moyle Chief Administrative Officer If you have any questions on the content of this report, please contact: J. Davidson Tel. #
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