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Missing an Opportunity for a Reset

January 21, 2021

The media coverage of late that the Halifax Regional Municipality (HRM) is considering tax increases as part of their budget preparation highlights what appears to be ‘business as usual’ coming out of a global pandemic.

Increasing the tax burden while businesses try and hang on and weather the storm is not the solution. In all the coverage on this issue, there was no talk of looking at reducing operating costs permanently – it was all about… how do we get the money to maintain the current status quo. While similar discussions are happening around the province; it would be great to see our elected leadership take this opportunity to critically evaluate their operating models; innovate their services and demonstrate a thoughtful understanding of what has been happening to the private sector, in particular the tourism industry.

Tourism Revenue in Nova Scotia fell from $2.6 Billion to $900 Million during 2020 – that is a lot of pain. Recovery models suggest a three to four-year turnaround to reach 2019 levels; however, there are a number of external factors we cannot control. Border re-openings, global vaccination programs, resumption of airline infrastructure, will ultimately determine timelines. Research from the World Travel and Tourism Council suggests restoring consumer behavior and confidence may be the most significant challenge, along with changes to business travel, meetings and conventions. In a typical year Tourism in Nova Scotia generates over 350 million in taxes; perhaps discussing how government policy can better support the rebuild of tourism would be a more effective conversation than increasing their operating costs.

Tourism operators know they cannot come out of this pandemic doing business as usual, in the first three months of the pandemic NS lost 20,000 jobs in the tourism industry. Businesses will adapt to keep costs in line with declining revenues for the foreseeable future. With only the domestic market at play for this year, there will be tremendous competition and innovation trying to capture available business. We can promote the success we have had as a safe destination and leverage our natural resources, wide open spaces, character of our people, and our pride in a more integrated and compelling Nova Scotia story but if we do not address issues such as seasonality, product quality, technical adaptions, access and labour we will be left behind once the global pandemic fully abates.

The question should not be about maintaining the status quo – it should be how do we service our communities better with less. Increasing taxes for residents, businesses and our customers coming out of a once in a lifetime global pandemic should not be the default response to budget shortfalls. If now is not the time to do things differently – when might be?