Retail groups want feds to implement visitor tax refund to boost Canadian economy

By Patricia D'Cunha and Laura Carney

A group of Canadian retailers and retail groups are calling on the federal government to implement a Visitor Tax Refund (VTR) program, in an effort to help stimulate economic recovery in this country.

The stakeholders, including Birks Group Inc., Hudson’s Bay Company, Cadillac Fairview Corporation Limited, and the Retail Council of Canada, submitted a proposal to Tourism Minister Randy Boissonnault in July, as part of a consultation on the federal government’s Tourism Growth Strategy.

The proposed program would allow international shoppers to reclaim the Goods and Services Tax (GST) and provincial sales tax on their purchases — a move the retail groups believe would boost both the number of visitors to Canada and the amount of money they spend.

The retail groups said the COVID-19 pandemic affected the tourism, hospitality and retail sectors, and that the program would help economic recovery in those areas.

Jean-Christophe Bedos, president and CEO of Birks, said a VTR program would position Canada as a global shopping destination and would substantially benefit the Canadian economy.

“The international context and the closing of borders have exacerbated an already serious issue of declining tourist spending in Canada. Every opportunity must be taken to stimulate the Canadian economy. This program would greatly benefit the tourism sector, retailers, and the Canadian economy in general, as it faces unprecedented economic challenges,” Bedos said.

“We are convinced that implementation of a Visitor Tax Refund program must be part of a series of actions by the government to ensure a strong economic recovery and position Canada as a global shopping destination and would substantially benefit the Canadian economy more broadly.”

Although the COVID-19 pandemic has exacerbated the decline in the tourism industry, the retail groups said Canada has been facing a five per cent decline in per-capita tourist spending since 2017, which is when the federal government cancelled the previous visitor rebate program.

In comparison, the European Union, United Kingdom and Japan has seen an increase of 23 per cent in tourism spending since its rebate program was introduced in 2012.

Meanwhile the tourism industry is breathing a sigh of relief as Canada’s remaining COVID-19 travel measures, including border vaccine mandates and the use of the ArriveCAN app at the border, are being dropped as of Oct. 1. Tourism groups have been calling for the border measures to be lifted.

The lifting measures include border vaccine mandates, mandatory masking on planes and trains, and testing and quarantine for international travellers.

With files from Michael Ranger of CityNews

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