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Bizarre decision to restructure Tourism B.C. at a critical time

The good news for the tourism industry - and there hasn't been much lately - is that in Tuesday's Speech From the Throne the provincial government re-introduced the idea of opening the Pacific Gateway to boosting B.C.'s economy.

The good news for the tourism industry - and there hasn't been much lately - is that in Tuesday's Speech From the Throne the provincial government re-introduced the idea of opening the Pacific Gateway to boosting B.C.'s economy. Specifically, the government will pursue a new comprehensive Asia-Pacific Gateway Authority with the federal government and will host an Open Skies summit next month in Vancouver.

The Open Skies summit has been on the agenda for some time. It grew out of a report released last month by the International Institute of Transport and Logistics on Canada's bilateral air service agreements. The report found that "Open Skies agreements with Asian nations are essential to address the growing disadvantage Canadian and British Columbia airports face with the United States."

Canada has 82 bilateral air service agreements, but only eight are considered "Open Skies" agreements. Those eight are with Barbados, Dominican Republic, Iceland, Ireland, New Zealand, United Kingdom, United States and most recently South Korea.

"The other 74 have restrictions that do not allow airports in Western Canada to compete with airports in the U.S. and central Canada for international air travel and commerce. The U.S. has Open Skies agreements with 94 nations, including 11 Asian nations and liberalized agreements with China and Japan."

Open Skies agreements with Asian nations would undoubtedly be good for tourism in B.C., but it's the federal government that has the authority to negotiate and sign these agreements. By hosting an Open Skies summit B.C. is just trying to make the case for the feds to do more. Good luck.

Tuesday's grim Throne Speech also included the announcement that all Crown agencies would be subject to review, to see where spending could be cut and money could be saved. At least the remaining Crown corporations were given notice, which is more than Tourism B.C. and the tourism industry got.

Kevin Krueger was appointed Minister of Tourism, Culture and the Arts on June 10. On Aug. 17 he announced he was dismissing the board and president of Tourism B.C. and bringing the whole entity within his ministry. There was no indication any sort of review was underway.

The minister has yet to provide a plausible explanation for a move that has shocked most involved in the tourism business. Krueger told the Vancouver Sun moving Tourism B.C. within his ministry will reduce administrative costs and those savings will be used for marketing. But he wasn't sure how much money would be saved. "...we certainly expect it will be hundreds of thousands of dollars and it may well be a good deal more," he told the Sun .

Restructuring the lead organization for an entire industry just months before the 2010 Olympics - "the largest-ever single promotion of our future and what our province offers," in Premier Gordon Campbell's words - to save hundreds of thousands of dollars? It strains credibility.

And as people in the tourism business have pointed out, Tourism B.C. was established as a Crown corporation in 1997 specifically to create greater efficiencies.

The Council of Tourism Associations of B.C. has accepted that Krueger's decision is final but " gravely concerned about the decision to dissolve Tourism B.C. and to bring the agency under the direct management of the provincial government."

COTA is specifically concerned about what the move will mean for funding. It called for "Formula-funding, which enables long-term, strategic planning over a multiple-year time horizon."

Tourism B.C. is currently funded through a percentage of provincial hotel room tax revenue. Krueger told the Sun that funding will stay in place.

That's OK, but one can't help but have the feeling a golden opportunity for B.C.'s second largest industry is being frittered away. As COTA said in its response to the dissolution of Tourism B.C., the industry is already facing enormous challenges, including the global financial crisis, impacts of H1N1 on key overseas markets, particularly Asia, new visa requirements for its fastest growing market (Mexico), new border documentation requirements and the harmonized sales tax that will make B.C. a more expensive travel destination. The value of the Canadian loonie compared to the U.S. dollar isn't helping either.

If tourism in B.C. doesn't increase substantially in the years following the Olympics many "told you so" people will interpret it as proof that the Games were a giant waste of money. There's still every reason to believe that tourism and awareness of B.C. will increase, but if it's less than expected you might go back to August of 2009 to see where momentum was lost.