Advocacy

February 20, 2025

Dear Members of the Standing Committee on Education and Economic Growth,

Thank you for the opportunity to provide the perspective of Prince Edward Island’s tourism industry on the proposed tariffs and their potential economic impact. As you consider the broader effects of these policies, it is important to recognize tourism as an export industry—one that brings new dollars into our economy by attracting visitors from across Canada, the United States, and beyond. The spending generated by these visitors fuels local businesses, supports thousands of jobs, and contributes significantly to the province’s tax revenues, helping to fund essential public services like healthcare, education, and infrastructure.

Tourism is a cornerstone of Prince Edward Island’s economy, generating over $600 million in annual economic activity and directly employing thousands of Islanders. Beyond job creation, tourism is a major revenue generator for all levels of government. The taxes collected from visitor spending on accommodations, food, transportation, and entertainment are reinvested into the very services that sustain our communities.

Rising operational and foundational costs including transportation, equipment and infrastructure are placing increasing financial pressure on tourism operators. As expenses grow, businesses face difficult decisions that could impact pricing, service levels, and overall visitor experience. In an increasingly competitive global market for vacation destinations, it is essential that Prince Edward Island remains an attractive choice for travelers. If costs continue to rise unchecked, we risk losing visitors to other destinations, ultimately affecting economic growth, employment, and government revenues. While we cannot control international trade policies, we can take proactive steps to mitigate their impact and protect our industry’s long-term sustainability. TIAPEI strongly urges the provincial government to:

1. Sustain and increase investments in tourism marketing and infrastructure to ensure Prince Edward Island remains competitive in attracting visitors, particularly from key domestic and U.S. markets.
2. Support businesses in strengthening local supply chains by encouraging the use of Canadian-made products to reduce reliance on tariff-affected imports.
3. Explore financial relief measures such as tax incentives, subsidies, or operational cost supports to help tourism operators manage rising expenses.
4. Advocate at the federal level for tourism-related exemptions on key imports that directly impact the cost of doing business in our sector.

At the same time, we must recognize that tourism cannot thrive without a supportive tax and regulatory environment. While external tariffs are concerning, the rising burden of domestic taxation including carbon pricing, property taxes, income tax, and regulatory costs poses a significant challenge to business growth and reinvestment. Tourism businesses contribute significantly to government revenues now is the time for those revenues to be reinvested in policies that help the industry grow rather than hinder its success.

Despite these challenges, PEI’s tourism industry remains strong, innovative, and resilient. A thriving tourism sector benefits all Islanders through job creation, economic growth, and the tax revenues that sustain essential public services. Now more than ever, we must work together to protect and strengthen this industry.

We urge the Standing Committee on Education and Economic Growth to recognize the importance of continued investment in tourism and to take meaningful action to support the businesses that drive this essential sector. TIAPEI welcomes the opportunity to collaborate on solutions that will strengthen tourism’s economic impact and ensure Prince Edward Island remains a top-tier, must visit destination.

Sincerely,

Corryn Clemence

CEO