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Canada Announces GST Rebates For Tourism Industry

by Mike Godfrey,, Washington

04 July 2007

The Canadian government's support for the tourism industry has been highlighted with its new goods and services tax/harmonized sales tax (GST/HST) rebate program, according to Finance Minister Jim Flaherty.

“We are rolling out the welcome mat to foreign visitors,” explained Flaherty, adding: “The tourism industry contributes to the strength of Canada’s economy, and our government is delivering tax relief that will help bring tourists to our great country.”

The Foreign Convention and Tour Incentive Program, announced in Budget 2007, is a new rebate program to promote Canada as a destination of choice. The program provides a GST/HST rebate to: foreign tourists who purchase an eligible tour package that includes accommodation; foreign tour operators who purchase accommodation in Canada that is resold to foreign tourists in an eligible tour package; sponsors and organizers who acquire convention supplies and facilities to conduct a foreign convention in Canada; and foreign exhibitors who acquire convention supplies and space at any convention held in Canada.

“Our government is taking a new approach that will not only be more effective at promoting tourism, but provide Canadian taxpayers with good value for money,” stated Carol Skelton, Minister of National Revenue. “This program focuses on the most competitive parts of the tourism market, such as tour operators and convention organizers.”

The new initiative has been welcomed by the country's tourism industry.

“The $17.9 billion hotel industry and its 378,000 employees applaud the new Canadian government’s initiative to attract more visitors to our great country,” announced Tony Pollard, President of the Hotel Association of Canada. “This will further enhance the promotion of Canada to our friends around the world.”

“Canada is one of the world’s top travel destinations, offering world-class facilities, services and experiences,” commented Michele McKenzie, President and CEO of the Canadian Tourism Commission. “We are going to use the new incentive program to encourage international businesses to host their next tour, meeting or convention in Canada.”

The rebate program took effect on April 1, 2007. The enabling legislation, the Budget Implementation Act, 2007 received Royal Assent on June 22, 2007. In addition, Budget 2007 introduced a new claims and reporting process to make the program more accountable and cost-effective than the previous Visitor Rebate Program.

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