Executive Director's Message Doug Reynolds
Doug Reynolds
Executive Director
NOTO

COMPETITIVE ADVANTAGE

States and provinces compete to attract new business development, and to encourage growth in the industries they already have. They use all of the pubic policy tools at their disposal, from tax structures to education systems, to make their location attractive to business growth. If you are a tourism business, how does Ontario stack up?

We have a lot of things going for us, especially location. We are close to major markets, and for sheer quantity of real estate, we are hard to beat. Lakes, rivers, varied terrain and lots of remote areas give us a competitive advantage that’s hard to beat. Ontario’s outdoors really does set us up to have a tourism industry that is the gold standard in worldwide terms.

Are we there yet? Not by a long shot. Why not? Because governments still have a lot of work to do to allow us to exploit our natural competitive advantage. We have a natural edge over our competitors, but government policies in a wide range of areas have seriously eroded that advantage.

People often look at how much Ontario spends on tourism marketing, compared to other jurisdictions. Although we clearly fall short of many of our competitors in this area, this issue is relatively minor compared to some others.

"To attract tourists, you need product. To create product, you need investment. To attract investment, you need the right regulatory and competitive environment."

If we want a new auto plant or shopping mall, governments address these issues head on. Unfortunately, they have not done the same for tourism, and instead have allowed a wide variety of barriers to investment to accumulate.

Imagine that you are a ski hill operator in Ontario. Like everyone in adventure tourism, liability insurance premiums are taking an ever-bigger bite out of your bottom line. What if your ski hill was located in Colorado, or any of a growing number of states that have passed “inherent risk” legislation? These jurisdictions have laws that state that certain activities carry with them an element of risk, and that an injured guest can only sue in case of outright negligence or malice. The Colorado ski hill is likely to have dramatically lower insurance premiums, and a huge competitive advantage over a business in Ontario.

A lot of our guests like to come to Ontario to fish. We know we have a lot of lakes and lots of fish, but how to we stack up against our competitors? In terms of how we manage for sustainability and quality, we are falling farther and farther behind some of our important competitors. The winter lake trout fishery brings almost no value to the tourism industry, but is a huge drain on the resource. How does Quebec address this problem? They have found a very simple solution – they simply don’t have a winter lake trout season (with the exception of a lake or two which are in the process of being closed). Which province is likely to end up with the better lake trout fishery? If you were a serious lake trout angler, where would you go?

I could easily go on with many more pages of examples. Ontario’s failure to control the virtually unregulated use of new access roads, and our lack of secure tenure to Crown Land and other resources represent two of the most obvious disincentive to investment. That is why NOTO has presented the Ontario government with proposals around Resource Allocation Licensing and Crown Land Trails Policy to address these concerns. Unfortunately, we have seen very little movement, so far, in addressing these issues. Think about it for a moment. Would you be more likely to upgrade that remote outpost cabin if you knew it would still be remote twenty years from now? If you had a fifty year lease instead of a one year Land Use Permit, how would that influence your willingness to invest? How would it influence your bank’s willingness to loan you money?

We need government’s help, not their money. Subsidized loans and grants are nice, and we’ll take them whenever we can. However, what we really need is policy support from government to turn competitive disadvantage to competitive advantage. We have resource quality in this province that is second to none. Imagine the prosperity we could bring to northern Ontario if government worked with tourism the way they work with the auto industry. 


This article was taken from pages 5 & 6 of NOTO's "The Outfitter" publication, Spring 2005 Issue

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