Sectoral Economic

Linkages and the Tourism

Satellite Account: The
Canadian Experience
Presented by:
Scott Meis

World Trade Organization, Geneva, Feb. 232-24, 2001

 Outline

• Introduction- the Canadian TSA

• Rationale
• Key Concepts
• Key Economic Results
• Structural Findings and linkages
• Conclusions

Canadian Tourism Commission

Introduction :

CTC Created in 1995 & 2001

OBJECTIVES:
• Market Canada as a destination
“BRAND Canada”

• Provide accurate and timely

information to aid decision making

Canadian Tourism Commission

Rationale : Information Gaps

1992/93
Inadequacy Of Data & Analysis
•Lack aggregate summary
•Lack view of industry
•Lack credibility
•Lack indicators of performance
•Incomparable with economy
•Incomparable with other sectors
•Incomparable with competitors
Canadian Tourism Commission
Rationale - User Requirements

Application Requirements
(NTFTD, 1986)

• Advocacy, planning and public

awareness;
• Marketing;
• Investment, operations and
management;
• Manpower, education and training
Canadian Tourism Commission
Introduction 1979-2000

History
• French concept of tourism satellite accounts, 1979
• Canadian Task Force feasibility study, 1985
• Canadian TSA recommendation, 1989
• Ottawa Conference TSA guidelines, 1991
• WTO/UN recommendations,1993
• Canadian TSA release, 1994
• WTO\OECD conceptual frameworks, 1996-1999
• Other national projects, 1996-1999
• Nice, 1999
• UN-SC endorsement, March 1, 2000
Canadian Tourism Commission
Rationale: A New Statistical Instrument

Tourism Satellite Account

• Integrates/interrelates dispersed phenomena
• Separate linked extension of SNA
• Unit of analysis - monetary values
• Set of detailed statistics measuring structure
and scope of tourism outputs, expenditures
and employment.
• Tourism specific summary of observations
• Comparable with total economy
• Comparable to other industries
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Canadian TSA: extensions

Current Extensions

• National Tourism Indicators

• Government revenue module
• Tourism Economic Impact Model
• Benchmark updates

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Key Concepts:

Tourism Commodities
• Tourism Commodity
A product or service produced mostly for
tourism, eg., tours on steam trains.
• Non- tourism Commodity
A product or service not specific to or
characteristics of tourism, eg., clothing, suntan
lotion.

Canadian Tourism Commission

Key Concepts:

Tourism Industries

Tourism Industry
Any industry that serves visitors directly and
would cease to exist or whose level of activity would
be substantially reduced wiithout tourism, eg., hotels.

Canadian Tourism Commission

Key Concepts: Tourism Commodities

Tourism Sector Commodities

Excluded From W120
Commodity Class Tourism share ( % )

Travel agency services 98

Accommodation 92

Passenger transportation services 93

Food and beverage services 21

Recreation & Entertainment 24
Other related services
Key Concepts : Tourism Business

Tourism Operator

Tourism Operator/Business
Any tourism enterprise or
establishment within an empirically identified
characteristic or specific tourism industry, eg., hotels.

Canadian Tourism Commission

Key Concepts : Tourism GDP

Tourism Gross Domestic Product

( TGDP )
• Tourism specific GDP
• Total value added by tourism and non-
tourism industries generated by
provision of goods and services to
visitors
• Total value at purchaser’s price minus
costs and taxes

Canadian Tourism Commission

Key Concepts : Employment

Definition of Employment

• Persons employed, whether full-time or

part-time.

• Count only employment due to tourism

demand
• Includes both tourism and non-tourism
industries

Canadian Tourism Commission

Key Economic Results : Old Measures
Canada’s Overall
Tourism Market Mix, 1999
112.5 million tourist* trips

Domestic tourism
74.6 million overnight trips
Outbound tourism
Inbound Tourism 18.4 million overnight trips
U.S.:
15.3 million overnight trips
Overseas:
4.2 million overnight trips
*tourist = 1+nights

Canadian Tourism Commission

Key Economic Results : Old Measures

Canada’s Overall
Tourism Market Mix, 1999
112.5 million tourist* trips

Internal Tourism (Dom+IB)

94.1 million overnight trips
International Tourism(IB+OB)
37.9 million overnight trips

National Tourism (Dom+OB)

93.0 million overnight trips
*tourist = 1+nights

Canadian Tourism Commission

Key Economic Results : Old Measures 1999
Reciepts and Payments on
Canada’s Travel Account
($billions)

Receipts Payments
Spending by For Res’s $16.8 Spending by Cdns $15.1

Balance
$-1.7

Canadian Tourism Commission

Key Economic Results : Old Measures 1999
Reciepts and Payments on
International Passenger
Fares ($billions)

Payments
Receipts Spending by Cdns
Spending by For Res’s Res’s on For Carriers $3.7
on Can. Carriers $2.7

Balance
$-1.0

Canadian Tourism Commission

Key Results: New Measures

Industry Performance
1999
• Tourism spending $50.1
• Foreign spending $15.3
• Canadian spending $34.8
• Tourism GDP $20.3
• % of total GDP 2.5%
• % of services exports 30%

Canadian Tourism Commission

Key Results: Tourism: 11th largest industry in 1999

Business Sector Share of GDP by Industry

Manufacturing 23.4
Finance, insurance & real estate 19.8
Community, business & personal services 15.4
Wholesale trade 7
Retail Trade 6.7
Construction 6.3
Mining, quarrying & oil well 4.6
Other utility industries 4.1
Communication 3.8
Transportation & storage 3.6
TOURISM 2.9
Agricultural & related services industries 1.6
Logging& forestry 0.7
Fishing & Trapping 0.2
0 5 10 15 20 25 30

Canadian Tourism Commission

Structural Linkages: Total Demand

Composition of Tourism Demand

in Canada
Other non-tourism
commodities
20%

Transportation
Other tourism 40%
commodities
10%

Food &
beverage
16%
Accommodation
Canadian Tourism Commission 14%
Structural Linkages:Tourism GDP

Tourism GDP Share by Industry

Other Industries Air
19% transportation
24%

Other tourism
services Other
10% transportation
8%

Food & Accommodation

beverage 16%
23%

Total Tourism GDP: $ 20.3 Billion (1999)

Canadian Tourism Commission
Structural Linkages: Business Characteristics

Distribution of Tourism Businesses

by Industry *and Size
% %
of Total SME’s**
Food and beverage service (92): 57 99.0
Recreation and entertainment (85,96): 19 99.0
Accommodation (91): 12 97.6
Transportation (45): 6 98.9
Travel services (96): 5 99.5
Other 1 ---
Total Enterprises (1999) 159,000
* 1980 Standard Industrial Classification
** Less than 100 employees
Canadian Tourism Commission
Structural Linkages: Employment
Tourism Employment by Industry
524,000 Jobs
Other non-tourism Transportation
commodities 17%
21%

Other tourism
commodities
6%
Accommodation
27%

Food &
beverage
29%
Canadian Tourism Commission
Structural Linkages: Government Revenues

$23 PER $100 DOLLARS

TOURISM SPENDING
$1.60

$8.90 $12.40

Federal Provincial Municipal

TOTAL = $15.4 Billion (1999)
* Adjusted = $30 /$100 spending
Canadian Tourism Commission
Sectoral Linkages: Intra-sectoral purchases

Inputs to Canadian Tourism Sector

Selected Industries in 1994
Accomm. Food and Travel
( $ millions ) Beverages Services
($ millions ) ($millions)
Selected Commodity Purchases

Transportation 31 29 16
Accommodation 25 24 14
Food and beverage services 33 20 11
Travel services 73 27 2
Recreation & entertainment 107 80 3

Source: Tourism Economic Impact Model (TEIM)

Sectoral Linkages: Extra-sectoral purchases

1994 External Inputs to Canadian

Tourism Sector Selected Industries
Accomm. Food and Travel
( $ millions ) Beverages Services
($ millions ) ($millions)
Selected Commodity Purchases

Agriculture products 53 492 ?

Manufacturing products 2055 7753 ?
Construction services 68 68 ?
Communications/utilities 479 509 ?
Finance, Insur. R.E. 519 1668 ?
Business & computer serv. 331 239 ?

Source: Tourism Economic Impact Model (TEIM)

Performance Trends:

Total Tourism Spending in Canada

by key Commodities 1999 in Review
Total Tourism Change from Change
Demand In preceding from $ 92
Canada year ( %)
Commodity Categories ( $ millions ) (% )

Transportation 20,084 8.5 3.8

Accommodation 7,060 5.1 0.4
Food and beverage services 8,103 5.0 2.9
Other tourism commodities 5,073 5.7 2.9
Total tourism commodities 40,320 6.8 2.9
Total other commodities 9,792 5.3 4.5
Tourism expenditures 50,112 6.5 3.2
Source: National Tourism indicators, Catalogue no. 13-009-XPB.
Performance Trends:

Tourism Exports Spending in Canada

by Key Commodities 1999 in Review
Domestic Change Change
Tourism from from $ 92
Demand preceding (%)
Commodity Categories ($ millions) year

Transportation 3,919 7.9 6.2

Accommodation 3,424 8.4 3.6
Food and beverage services 3,541 7.6 5.4
Other tourism commodities 1,424 7.8 4.2
Total tourism commodities 12,308 8.1 5.1
Total other commodities 6,812 8.1 5.1
Tourism expenditures 15,288 7.7 5.12
Source: National Tourism indicators, Catalogue no. 13-009-XPB.
Performance Trends:

Tourism Hard Hit

by Domestic Business Cycle
0.08

0.06
Cyclical Deviation

0.04

0.02

-0.02

-0.04 Total Tourism Commodities

Tourism Expenditures
-0.06 GDP
-0.08
86 87 88 89 90 91 92 93 94 95 96
Canadian Tourism Commission
Performance Trends:

Tourism Exports
a Growth Leader
2
1.8 GDP
Canadian exports
1.6 Export tourism expenditures

1.4
1.2
1
0.8
86 87 88 89 90 91 92 93 94 95 96

Canadian Tourism Commission

Impacts : Reduced Deficit

Travel Deficit
Billion

-1.7

-3.2 -3.4 -3.5

-4.1

-5.9
-6.4
92 93 94 95 96 97 98*
* Estimate
Source: Statistics Canada
Canadian Tourism Commission
Impacts : Employment

Employment 524 000

Thousands
550 1999

525
+ 14%
500 New Direct Jobs
65 000
475

459 000
450
92 93 94 95 96 97 98*
1992
*Third quarter
Source: Statistics Canada
Canadian Tourism Commission
Impacts : TGDP Growth

Tourism GDP
1999
20.1 $B
Tourism GDP ( $B )

1995
16.2 $B 1999
2.5%

Tourism GDP Ratio

1995
2.3%
Canadian Tourism Commission
International Vision - Future challenges

Research and Development

• Medium & long term
– UN-SC endorsement of revised
definitions and classifications
– Developing extensions and applications
– Labour force module
– Tourism capital formation module
– Tourism balance of payments
– Links with environmental accounts
Canadian Tourism Commission
Who knows? … Who cares?

• `TSA is an invaluable tool in moving

tourism’s political agenda forward ’

• ‘ The TSA also helps industry members

define themselves as part of tourism ’

• ‘ TSA raised the profile of tourism ’

Debra Ward,President of TIAC
World Conference on the
Economic Impact of Tourism,
France, 1999
Canadian Tourism Commission
Who knows, who cares: Follow the leader

• Sweden 1996
• Norway 1997
Canada
• Poland 1997 1994
• Singapore 1997
• USA 1998
• Mexico 1998
• New Zealand 1998
• Australia 2000
• Spain In progress
• Thailand In progress
Canadian Tourism Commission
Conclusions

Conclusions
• Met user requirements
• Defined tourism products/services
• Defined tourism industries
•Credible measures
• Comparability with total economy
• Comparability with other industries
• Potential foundation of trade negotiations
• Potential tool for monitoing international
trade perfomance
Canadian Tourism Commission
 Thank you for your attention

WEB: canadatourism.com
CTX: http://www.ctc-ctx.com
E-Mail: meis.scott@ic.gc.ca

Canadian Tourism Commission