“Discover Your Canada” tax credit would benefit Canada’s travel sector

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The latest Canadian Press-Harris/Decima survey shows strong support for a private member’s bill that would provide tax incentives for Canadians travelling within Canada. Research also suggests that, should it be implemented, the “Discover Your Canada Act” has the potential to sway Canadian travellers’ consideration toward destinations inside Canada instead of those further abroad.

When asked, seven in ten Canadians said they somewhat or strongly support the initiative, introduced by Liberal MP Massimo Pacetti (Saint-Léonard-SaintMichel, Quebec). The private member’s bill would apply to trips over three or more provincial boundaries, giving families a 100% tax deduction on bus fare, a 75% deduction on train tickets, and 40% for domestic flights up to a value of $2,000.

Support for the bill is highest in Atlantic Canada, where nearly eight in ten were in favour of it, followed by Alberta and British Columbia, where three-quarters of respondents support the idea. With the tax credit only applicable to multiprovincialtrips, it stands to reason that Canadians in Atlantic and Western Canada are more supportive than those in Central Canada.

Results also suggest that this tax credit would influence Canadians’ travel plans, prompting them to give stronger consideration to trips within Canada. Four in ten (39%) Canadians said that the tax credit would make them more likely totravel within Canada in the coming year, while just 5% said they would be less likely – a net impact of +34.

Findings from Harris/Decima's syndicated TravelPulse series – Fall 2012 edition – show that Canadian travellers have stronger unaided consideration levels for destinations in the United States (49%) than for destinations within Canada (30%). Moreover, with the Winter travel season fast approaching, at 28%, unaided consideration levels for Mexico and the Caribbean rival those for Canada. The “Discover Your Canada” tax credit has the potential to heighten consideration levels for Canada which would likely result in more travellers choosing Canadian destinations for upcoming trips.

Specifically, results show that among those looking at travel to the United States for their next trip, the total impact was +43, with nearly half (45%) saying they would be more likely to travel within Canada, and just 2% saying they would be less likely. The draw for Canadians looking at Mexico and the Caribbean for their next trip was even stronger. Nearly six in ten (58%) said the tax credit would make them more likely to travel within Canada, while just 4% said it would make them less likely – a net impact of +54.

While pundits are quick to point out that the “Discover Your Canada Act” is unlikely to be adopted by Parliament, the initiative does have the potential to address certain challenges faced by Canada’s travel sector – particularly Canada’s growing international travel deficit with the world, which increased by $91 million to $4.2 billion during the second quarter of 2012 (Statistics Canada).

As Harris/Decima Vice-President Patricia Thacker points out, the potential impact of this travel tax credit goes well beyond the family budget: "Our survey results show that Canadians need just a small push to consider – or reconsider – travelling within Canada. With Canada's international travel deficit on the rise, the magnitude of increased domestic travel spending cannot be ignored."

Each week, Harris/Decima interviews just over 1,000 Canadians through teleVox, the company’s national telephone omnibus survey. The data for this release was collected between November 1st and 4th, 2012. The margin of error for this sample size is 3.1%, 19 times out of 20.