CATO, ATOQ call on feds to extend CEWS to prevent permanent layoffs

The Canadian Association of Tour Operators (CATO) and Association des Tours Opérateurs du Québec (ATOQ) are seeking urgent action and financial support for their struggling members. 

In press release issued Thursday (June 10, the associations called on the federal government to extend the Canada Emergency Wage Subsidy (CEWS) at the current level until at least December 31, 2021. 

CATO and ATOQ represent travel companies across Canada operating tour programs and packages from Canada to international destinations, trans-border as well as inbound to Canada and intra-Canada. 

“CATO and ATOQ tour operator members truly appreciate the federal government’s Canada Emergency Wage Subsidy (CEWS) which enabled us to retain employees during the COVID-19 pandemic. However, we were nonetheless forced to lay-off almost 30 per cent of our collective workforce, so we are fighting for our survival,” said Brett Walker, CATO Chair. “With average advanced bookings made six months prior to departure and borders still closed, there will be little, if any, return to international travel before 2022." 

"With CEWS running out, the only means to bridge the gap and save thousands of jobs is for the government to extend CEWS at the current level for our members and those hardest hit until the end of 2021."

82% below 2019 levels

Due to the immense impact of the pandemic, CATO and ATOQ members were forced to temporarily and permanently lay-off employees when travel came to a grinding halt beginning in March 2020. 

Women make up more than 73 per cent of their workforce and they are one of the most diverse and inclusive industries in Canada.

READ MORE: Collapse of tourism: 373,000 lost jobs, $59.2B drop in Canada’s GDP, says WTTC

As a result of travel sitting at a standstill, revenue will continue to be 82 per cent below 2019 levels, the associations said. 

This will be the case for many months to come as CATO’s and ATOQ’s new Economic Impact Assessment Report indicates the average advanced booking is made six months ahead of departure. 

In Ontario and Quebec, all revenue generated from bookings is held in trust until trips depart. 

This means companies cannot use these funds to pay wages or travel agent commissions, which typically return millions of dollars to the government through payroll taxes (income tax, CPP, EI and EHT). 

"Without an extension of CEWS to CATO and ATOQ members, their segment of the industry will have no choice but to lay-off more individuals or permanently let go of employees," the associations said. 

Canadian tour operators need at least six months to prepare and bridge the gap between the opening of international borders and earning any revenue, the groups said. 

Along with securing guests’ accommodations, flights, tour guides, sightseeing excursions, etc., they also need to co-ordinate health and well-being protocols in this new world of travel.

What's the criteria?

CATO and ATOQ also emphasize that Ottawa "must make known any updated criteria or clear guidelines" for easing travel restrictions and reopening borders. 

"Millions of Canadians work in tourism-related industries, yet tour operator members have not been provided the fundamentals their industry sector needs to survive," the associations said. 

The World Travel & Tourism Council’s (WTTC) latest annual research says the number of those employed in the Canadian travel and tourism sector fell from nearly 1.8 million in 2019, to just over 1.4 million in 2020 - a drop of 20.9%. 

The loss of 373,000 travel and tourism jobs nationwide has had an immense socio-economic impact, the WTTC reports, noting that Canada’s GDP dropped by $59.2 billion in 2020 as a result. 

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