Ontario Budget 2026: Tourism’s Role in Ontario’s Economy

Mary Anne Ivison  00:01

This is forward motion discussions about the important topic shaping Ontario's tourism industry. Here's your host, Andrew sigwar,

Andrew Siegwart  00:10

pleased to have you here with me. Today. I'm going to try something a little different. Normally, we have guests who we interview to talk about various topics, trends, destinations, tourism policy, etc. Today, I thought what I would do was just share with you some of my thoughts about the upcoming Ontario budget 2026 what I'll be watching for and why I think that tourism should be a part of the story. Budget week always brings a certain amount of speculation, lots of ideas being brought forward, lots of industries vying for attention, trying to secure policy wins, trying to secure funding. This year feels, I'd say, a little more economically driven than usual. There's just so much that's happened in our economy in the last year. If you think about things like tariffs, trade, what's been happening between Canada and the US, and how it changes pretty much every day or every few hours, overall competitiveness in the market, workforce, the forces that are shaping investment and, of course, the cost of living challenges that not only impact consumers, but the inflationary pressure that impacts businesses. All of this has been a lot of conversation over the last year or so, and it's interesting, because all of these issues are all tourism issues as well, even if tourism might not be the first sector mentioned when speaking about those very much those issues are tourism issues. And our advocacy work this year to talk about the pre budget and to think about 2026 we really leveraged on Ontario's New tourism strategy to shape tiles pre budget advocacy work so that it was really representative of what the industry needs, and what operators across the province told us was really important and was going to be important for our continued recovery and growth. I just want to thank everyone who participated, from our membership in that work and in our pre budget work, so everything from participating in surveys when we put them out there joining us at Queen's Park Day, which we hosted this year in December, we executed some great letter writing campaigns to the Minister of Finance. We also had meetings with key ministries. We invited participants to join us along the way, we worked with some of our advocacy partners. All of that work throughout the year allows us to bring good recommendations to the table. I just want to thank everyone for all of your work in that regard, it really makes a big difference.

Andrew Siegwart  02:57

I thought it would be useful for me to share with everyone today a few things. So what am I observing from the bevy of announcements that are being made during this pre budget period and some of the conversations that we're hearing our politicians socialize in the in the media? I'm going to talk a little bit about what we've asked for and why, and I'll share with you at the end, kind of exactly what I'm looking for when the budget comes out, which we're expected to have happen later on this week. In fact, I believe when this podcast goes live, it'll also the budget will be being announced at the same time. So expect me to do maybe a bit of a follow up on what we see, but I wanted to share some of the thinking that went into this work during budget week. You can usually tell where a budget is going by all of the announcements that that lead up to it, and all of the discussions that have been happening leading up to it. And we've seen a lot of focus lately, lot of discussions on workforce, economic resilience, supporting communities, community resilience, concerns about cost to consumers, and we've heard a lot of discussion about Investment Attraction and also the barriers to investment growth. One of the things we noted a few weeks ago now was that the province of Ontario did make an announcement about supporting post secondary schools. They announced about a $6.4 billion investment that looked at developing a longer term funding model for schools, enabling the post secondary schools to raise tuition while still keeping costs low, but did give colleges and universities the ability to sort of raise tuition at a small percentage annually. I know that's been very controversial, and it's gotten a lot of a lot of discussion and opposition, but certainly a recognition that that ecosystem needs investment in order to continue to meet the needs. And also, there were some changes announced in relation to OSAP and how students can can access learning. It's interesting, this is probably one of the biggest challenges that. It that I have been tracking in my time at Taio. Shortly after I joined in my role, the first announcements were made about the international student cuts. This was back in 2024 and we have been seeing how that one policy change has been making major impacts on our sector, and here we are today. Two years later, nearly 60 programs either canceled or paused. High degree of alarm and concern about, how are we going to educate future talent? And all those students who used to study in colleges and universities and work while they're studying are no longer here and working with us. So a lot of consequences that we're expecting. So some of this funding that we've already seen announced clearly is recognizing that and is looking to bring solutions to the table. One of the things that Tayo is doing this week, in fact, and we're partnering with the Ontario restaurant, hotel and motel Association, our great colleagues there, we're hosting a meeting. We've invited all Ontario Colleges, deans, as well as program leads from across the province to join us for a session where we roll up our sleeves and kind of assess the situation, look ahead to what's needed and band together and see how we can come up with a game plan to sustain our culinary tourism and hospitality programs. But it's not just the schools, it's also different ministries. So we've invited a number of ministries, including education, colleges and universities, as well as the Ministry of Tourism, culture and gaming, to participate and start to look at how we can work together and strategize and adapt. Where we're going to be hosting a meeting on that front this week, and then we'll be bringing more information forward to all of our partners at the federal level and across the province. There's more work to be done here, and we're going to need to really do this in partnership. So hopefully we'll hear more about some initiatives that might help stimulate some of that work. We've also heard some discussion as it relates to skills development and Ontario protecting workers, and a lot of training and funding announcements being made to help workers who are impacted by tariffs. And that is important work, not just in tariffs, but also just global disruption and supply chain and everything that's happening as a result of the United States and its trade policies. There's been a lot of announcements and a lot of discussion on that front one of the things that we're kind of paying attention to, and we'd like to see, tourism isn't impacted in the same way, but we are performing quite well, and we are contributing to the overall economy, and depending on the market you're in, anywhere from five to 10% of employment is in tourism. So we think that some of those skills development dollars really should be allocated to the tourism sector so that we can keep the engine humming and drive more tax revenue to pay for some of those remediation programs and support programs for other sectors. But that whole discussion has been percolating, and that's really interesting. Something else that that came forward really a bit by surprise to many, was an announcement around bring your own alcohol to festival environments, pending municipal bylaws, pending permitting, and a number of other things that we still have to understand a little more clearly. It was an interesting announcement. It was framed as helping festivals, reducing costs, supporting tourism and local economies. And I believe that there's a sense that some of these moves might deliver those outcomes. I have a sense that a bit more of the objective there was on showing consumers opportunities for lower cost engagement and experiences and also accessibility to consuming alcohol in different ways. It really does follow a modernization program that the province has been deploying for quite some time now, and so I thought that was really interesting to be announced so close to Budget Day. Couple of things that immediately jump out when I think about and assess that announcement we heard from dozens and dozens of members in many different sectors, whether you're a restaurant or a bar owner, or whether you're a festival an event, or whether you're a municipality, or whether you are someone that operates a public park or a destination that is perceived to be a bit of a public space, even though it isn't a lot of work, I think, and information is still needed to understand what this might mean, and if there are unintended consequences, how do we address them? So if you think of a festival that typically brings people to a community, that brings customers to restaurants and bars. You know, they're obviously very concerned they don't want to lose their customers. Oftentimes, these festivals attract people to business areas downtowns, other businesses are frequented. They tend to provide funding to those festivals that organize these festivals. And so if businesses. See a loss in in business, then the festivals themselves could see a loss in funding. There's also some important conversations to be had about how to manage alcohol service and the safety and security protocols and training, etc, that are needed in a new model. And so these are some of the things that I believe industry is looking for guidance on and also to provide input on as this new policy rolls out, so we'll see as the budget comes, if there's any more information provided on that front, we are certainly polling our members and getting a lot of information and sharing it to the various ministries to educate them so they know what industry is thinking right now, but that's one that I thought was interesting, that was announced recently. We have seen following the festival discussion and topic there, there has been some language and discussions about continuing investment in festivals and events through experience Ontario. Really pleased to see that language and discussion out there, as we know how important festivals and events are, and we also know that festivals and events have been struggling over the last few years, so any messaging that that reinforces that program is good. Of course, we would love to see investments there expanded. We'd love to see that pot of investment grow. We'd love to see a space where festivals and events can retool themselves, can look at growth opportunities. We want to see new festivals coming and building as well. So there's a lot of opportunity to invest there. I found it really interesting a few weeks ago when premier Ford made comments at an event about reviving the taste of the Danforth really demonstrating his sense of how important those festivals are, not only to community identity, but to economic outcomes and tourism. So little things like that really tell us about what the what the government is thinking about, and the opportunities they see, and, of course, the opportunities that we have in bringing more ideas to the table. Minister Cho our Minister of Tourism, culture and gaming, has also announced a number of things and had some very interesting conversations in public spaces and in media channels that I think are worthy of highlighting. Pre budget, of course, there was quite an announcement about a new Niagara strategy that looks at investment infrastructure really taking an ecosystem approach. It's a really big play. It's also quite aligned with the forward motion tourism strategy that Ontario's tourism operators worked to put together, really looking at investment, really looking at things like transportation, looking at things like attractions, and making sure that we have opportunities to expand International Outreach and International visitation. So to me, that is a really good example of how we are seeing an acknowledgement of the value of tourism and how it can drive economic growth and destination development. It is clear that the province sees that and is in fact leveraging its own assets, such as gaming such as parks and recreational spaces and cultural events to to really help grow that. One of the other things that I heard minister Cho mention recently was about increased international visitation, talking about some of the work he has done in international markets, and joining teams like destination Ontario as they have promoted Ontario abroad, and hearing that messaging come from the minister talking about the opportunity and the value there, I think, is encouraging, and these are signals that we want to continue to hear, because he's absolutely right. Ontario has an opportunity to grow, and we are such a great destination. We have so much variety, and we can be welcoming more folks globally into into our province.

Andrew Siegwart  13:52

One of the other things about the Niagara strategy that really stands out to me is also talking about and demonstrating how when there are conditions in place, whether it's strategic planning, whether it's commitments on funding, it can help boost investment, and it can help boost both public and private tourism investment. We know that tourism investment in Ontario from the private side actually lags the national average, and so combining and thinking about how public investment and private investment can happen in tandem and can can coexist, actually is a really good opportunity. And so I think there's some things that we can talk about there and expand upon. I also found it quite fascinating and intriguing. Premier Ford made some pretty interesting policy announcements, some controversy there, and some some excitement there. I have to say, with respect to Billy Bishop airport. I mean, these are some big moves that are being brought to market. Talk not about just improving infrastructure and improving capacity, which then helps us to grow and expand internationally. Connect Ontario. Koreans across the province, you know, connect more Canadians into Ontario. But it's also he's signaling to us that there's a real need to remove barriers to development, and sometimes we have to take some big moves in order to do that. So there's many more conversations that I could highlight. These are just a few that I thought were interesting to kind of stitch together, but when you look at them, it actually lines up quite closely with what the industry has been saying for quite some time in terms of what do we need to be investing in, and where do we need to be focusing on to build not only Ontario's economy, but to leverage tourism to do so,

Andrew Siegwart  15:41

really, if I could summarize our conversations last year, I would summarize it as tourism really does, on a good year, on an everyday year, strengthen Ontario's economy. But in the last year, it's never been more important, and I think we've proven ourselves in terms of our ability to be resilient and to deliver when other sectors struggle. Tourism is a service export. It creates jobs in every single community across the province, large, small, rural, urban. It can scale faster than many sectors, not just because we have nimble business operators, but because we have a support system of destination marketing organizations, sector organizations, regional tourism organizations, suppliers. In this space, there's an ecosystem there that can and often works very well together to bring speed. Again, as I mentioned before, everyone is at the table, small businesses, rural communities, large leveraging great opportunities like indigenous tourism. There are so many players who play in this space, an increasingly growing number of solopreneurs and entrepreneurs who might not even have employees yet, but have a great idea and are playing in the visitor economy and tourism spaces. It's a lot of energy here. And then, of course, you can see where there's been a high degree of investment in the infrastructure we need for all this to be leveraged, and we'd like to see more. One of the things that I think is really important, and I've really been reminded of this this past year, is that tourism builds community and social cohesion. Our values as Ontarians have really meant something. They've meant something when Canada has been challenged on the on the global stage, and it's meant something because more Canadians have decided to travel in the last year and to show support to our communities, and we are seeing how international markets and even us visitors, who are very aligned and sympathize with what we've been through in this this interesting year, have all recognized that our values are special and that our community matters, and so tourism really is a catalyst for that. So when I think back to what government is talking about right now, when I think about what industry is talking about right now, it's all wrapped up into that tourism is an industry that's here every day, but we're kind of built for the time in the moment, and there's more growth to come. I think, I think government understands this today, maybe in a way that it didn't a number of years ago, but they really do now. But it doesn't mean that all of this shows up in budgets, in the way that it could, or the way we're often expecting it to. We often look to see that word tourism in places, and I don't think it's going to be that simple this time. So again, I'm going to share with you a little bit more about the recommendations that we've brought forward, and maybe how to help you decode the budget when we all get to hear it and see it in a few days time.

Andrew Siegwart  18:40

There were a couple of areas where we decided that we really wanted to focus on the pre budget campaign and discussions. Let me start with sort of marketing and demand generation. We know that Ontario is competing with many other provinces who are who have more marketing dollars at their disposal to promote visits to their provinces and territories, we've seen their growth rates increase, while ours have not increased to the same degree the marketing budgets here matter. More dollars to spend equals more outreach and connection to consumers who want to visit. Business events are huge economically. We know this. I think the meetings meet business Canada coalition talks about roughly 40% of all tourism revenues or tourism spending can be attributed to business events. That's pretty big. There's an international conventions and attractions fund that was set up by Destination Canada and the federal government has funded over a number of years. It's driven great I think it's 22 to one return on investment, but we have no commitments right now that that program is going to continue at the federal level. And in fact, we're quite concerned, because we know there's been a lot of pullbacks in spending within federal agencies. So one of the things that we've been thinking about is, all right, how can we take some of those. Ideas and implement them here in Ontario. And of course, indigenous tourism, still one of the fastest growing opportunities, still hugely of interest international visitors, and there's some opportunities there. In our pre budget discussions, we have quite aggressively pressed for the need to provide more funding so that destination Ontario's marketing budget can be in line with key competitors across Canada. Think of British Columbia, Alberta, Quebec. We're behind about 10 to $16 million compared to their budgets, and that goes a long way in building visitation. Again, as I mentioned, what we've learned from the impact of the icaf investment for attracting international events, why not deliver a program right here in Ontario? We can see that 22 to one ROI, and let's, let's deliver it across all the markets here in Ontario. So that was something that we talked about. One of the things that I've learned over the years is that, first of all, you have to pick and choose what you're recommending, and you want to make sure that those investments that you're recommending can make the biggest impact. But what we do know is that when governments do invest in demand generating initiatives, the industry responds really quickly, leverages the network that we know exists, and can turn it in a fast way into employment, business growth and local investments, that's been a really important part of our of our message will be interesting to see what comes of that, and whether we see some alignment there.

Andrew Siegwart  21:30

While I'm talking about growth ambitions, I think it's also important to talk about our second issue, which is seeing some concrete action to protect our future workforce. So every operator that I have been talking to over the last few years, if getting more more spending and more visitors is number one, equally important, or number two is how understaffed most of our tourism businesses are, and how challenging it is for them to find talent. This has been an ongoing conversation, but in 2025 and leading into 2026 the stakes got higher. About 60 college programs across Ontario have closed or paused. Intakes going forward are going to be dramatically less individuals studying in Ontario in our culinary tourism and hospitality programs, and therefore preparing for future careers or working while they study, the numbers are going to be dramatically less. And of course, the immigration rules have also changed dramatically from the federal government and leading down to the province, and there's no sense that there's any mood or interest in in making changes to those immigration policies right now. What we do know is that rural and northern communities have been the hardest hit, and we've seen some of the biggest closures there, and those markets are often more challenged to recruit labor because it's hard to live in those places, the housing doesn't exist, or the cost of housing has gone through the roof, many other issues in rural communities. So one of the things that we've been asking for in the in the budget discussions this year is for more investment to protect our post secondary schools, particularly culinary tourism and hospitality programming. So we did see some preliminary announcements on some funding. We're hoping to see more and best case is that we see a little more collaboration and focus on protecting the tourism, Culinary and Hospitality programming. We'd like to see some policy that helps us build those back. It's going to be a long road. I have to say. Skills Development Fund is a critically important initiative. It provides skills development training for every sector. You know, we're close to 10% of the workforce, we'd like to see 10% of those dollars being used to train tourism workers. Why does it matter more than ever this year? Well, because all those college programs are not going to be operating as they have been in the last few years. So which means that industry is going to have to fill the gap. And so if employers are going to need to do more training, then we're going to need to find ways to support them through training programs and initiatives. And initiatives. And there's a number of great tourism players in that space, but we really are hoping that this year, going forward, that that fund is well supported and that tourism is included, expressly linked there immigration pathways, as I mentioned earlier. This is a political challenge right now, I would say at the federal level, folks don't really want to talk about the need for immigration reform. Provinces are very limited to what happens at the policy level from the federal government. But I one of the things that I'm looking for right now is I'm looking for some leadership and some signals that long term planning is on the horizon with immigration reform, the math just doesn't add up. We need to continue to look at building our workforce and our labor markets with domestic as well as international talent, and we can't wait five years for a plan to emerge. We need to see some thinking on this now. So. Why Taio has been advocating so hard for this. I've had lots of conversations with some of our federal counterparts, and they're pretty confident that the federal government is not really looking at this anytime soon. Let's put it this way, while we're waiting for things to change and for markets to respond, now's the perfect time to develop that plan for the future. So I'm really hoping to see something come from the province on that front, another piece that has been an important discussion for us, and I actually think there's a really big opportunity, and there's a lot of alignment, and that's around investment, attraction, building more demand and and creating more opportunity within communities across the province. So we know that the province is investing in things like infrastructure, culture, regional attractions, transportation initiatives. There's a number of things personified by one example, the Niagara strategy. It's very good. It's very aligned with the strategy. A few things though, that I'd like to highlight, and some of the things that we're thinking about that we'd like to see here is we'd like to see some dollars in investment around stimulating private investment. How do we unlock that risk? How do we unlock capital? And how do we expand business opportunities so that tourism operators can invest a bit more and leverage some of the public funding that is boosting tourism. We have, we have looked at and brought forward a couple of examples. One of them is a capital tax credit that we're recommending. The other one is a product development fund. This time around, we actually created a full scope set of recommendations, including not only policy recommendations, but actual program examples based criteria really flesh them out so that there could be a little more of an analysis done. Our figures show that if we were to take about $30 million and invest that in both tax credits and market development fund or product development funding that 30 million could turn into 450, plus million in economic impact, and that would be spread across as many communities and regions and markets where there is capacity and an interest. So while the province invests in some really key, what I would call demand, driving and impactful long term destinations. This additional investment could help round that out, could help expand the impact and also create and identify future markets for even more investment. So these are some of the things that we're bringing together to recommend to plant seeds and to look at growth, not just for the here and now and in this calendar, but to start working together to build an ecosystem to stimulate more investment over time. This is how I believe that we will be the most competitive in Canada and continue to make a global impact. One of the other things that we've been talking about as well is the municipal accommodation, tax regulation improvements. You know, many of you who listen here have heard tayo talk about how the regulation has been in place for about eight years. We've learned a lot. It's time to update and sort of make some things clearer, and all that is true, but if I could distill it down to one thing, I would just say that there's a lot of revenue being raised through this platform destination marketing organizations, and the tourism side is really leveraging that investment for growth in investment, investment, attraction, so many different things. On the municipal side, there's a real opportunity to see more of those dollars help achieve some of the objectives we're talking about here today, and so we want to continue to have those discussions, and we're going to continue to educate the province on on these opportunities and maybe what we're leaving On the table.

Andrew Siegwart  29:01

So with all that in mind, what should we really watch for in the budget? As I said before, it's it's not really just one line item, and it's not necessarily a whole bunch of initiatives that say tourism. I would say we're looking for signals across the different ministries and across government, and looking at where we fit, or how we can fit into the broader picture. But there are a few things in summary that I am I'm really hoping to see, and I'll be paying close attention to destination, Ontario funding. Would really like to see that investment made this year, initiatives to attract international conventions, events, sporting events, etc. I'll be listening to see if there's any mention about that, that whole sphere. I mean, FIFA is coming in 2026 it is no doubt going to drive a significant impact. And I believe it's a template to look at how we continue to do that in the future. So be really interesting to see. There's any nuggets there that link to future beyond FIFA workforce skills funding with a tourism focus, we're hoping to see any kind of announcements or initiatives that can really help make an impact in 2026 particularly as we are seeing the bigger drop in those post secondary programs. We would love to hear more about and see more in the post secondary funding side. As I mentioned, we've pitched a couple of interesting investment tax credits and product development funds. I don't know that we'll see those be fully adopted, but I'm going to be paying attention to see if there are any signals or nuggets from what we've proposed, if it's made its way into any kind of the economic programming, you know, business events, festivals, tourism programs, overall, anything that will drive those and help leverage that I'm going to be interested in. I don't think we've heard anything in the last few years directly related to indigenous tourism. So hopeful to see something there, and again, always paying attention to what's happening in the in the regional and northern in the rural economies, as I mentioned earlier, they are facing some disproportionate impacts on a number of fronts, particularly the labor force. So it'll be interesting to see what might be positioned there. And then last but not least, I always do look for acknowledgement, not just of tourism's role in Ontario's economic growth, but on signals of what might come post budget. Usually there's a couple of seeds that indicate where where the government is going. And then what we could be thinking about for 2027 so those are some of the things that I will be thinking about the tayo team will be thinking about. And again, sometimes the most important things aren't the headlines. They are, in fact, the signals. And that's what we always have to pay attention to. It's what you expect us to pay attention to. So in closing, industry's done a lot of work this year, really, really thankful to everyone who has contributed and participated. The strategy that we have collectively built has really proving its worth by providing us direction and focus. We know that all levels of government, but particularly the province, is listening more than ever before again, all of the conversations that we are seeing and many more touch upon the needs and the challenges that we have been raising. And so that is all a really good indicator. Budget is one step. But of course, we have a lot of work to do. Our work doesn't end after Budget Day. It's just it's one date in a big calendar of events, and a lot of work for us. So we will continue to push and leverage and retool and have great conversations with different ministry players, MPPs, ministers, etc, we learn as much from what we hear as from what we what we bring forward as well. Tourism has been, has always been one of Ontario's quiet strengths. The way I see it from my seat, I see us playing a more central role than ever before, largely due to our impact on the economy and largely due to the awareness of how tourism has supported Ontario's economy. So we're going to keep leaning into that and leveraging it. We'll be watching very closely, and we will share our analysis after the budget later this week, and hopefully add a little more insights on what we've heard and share a little more on what we plan to do in the year ahead. As always, don't hesitate to reach out info at Tia ontario.ca with any of your suggestions or ideas or thoughts, and look forward to returning next time with a great interview. So thanks and have a great weekend.

Mary Anne Ivison  33:36

Thanks for listening to forward motion. This show is created by the tourism industry association of Ontario, and is recognized by government as the voice of tourism and produced by everyone at the sound off media company you.