Tax decisions and political uncertainty put brakes on tourism spending in Alberta, says industry group

A tourism industry group says Alberta is in for a drop in visitor spending because of the province's fiscal policies. Here, a cyclist enjoys the dramatic Drumheller-area countryside.

Political uncertainty — some of it surrounding separatism — and provincial fiscal policy are driving hundreds of millions of dollars out of Alberta’s visitor economy, an industry organization warns.

The Tourism Industry Association of Alberta (TIAA) predicts losses in annual visitor spending of $164 million, adding that private-sector investments worth $271 million are already stalled.

The spectre of a referendum on separatism is part of an uneasy investment climate that’s dissuading the private sector from taking a chance on provincial tourism, asserted a TIAA report.

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Tourist spending habits will trend downward because of tax increases, said the report.

At issue are two percentage points the UCP is adding to a tourism levy this year to make it six per cent in total, along with next year’s introduction of a six per cent vehicle rental tax.

The taxes-and-uncertainty scenario will mean, all told, that 813 jobs will be lost and annual GDP will drop by $119 million. Governments will lose $22 million a year in tax revenue, says the report.

On Thursday, Tourism and Sport Minister Andrew Boitchenko told reporters that visitor spending continues to trend upwards in Alberta, with growth so far in 2026 at three or four times the national average.

“I saw the numbers in the report,” Boitchenko said. “But the fact remains that we are still growing the tourism industry in our province and we’re still strong.”

Last year, visitor spending hit $15.2 billion in Alberta, an increase of more than six per cent and two points higher than the national average of about four per cent.

The province aims to hit $25 billion in visitor spending by 2035 and is “well on our way” to hitting the target, said Boitchenko.

As reasons for optimism, he mentioned high-profile sports events on the horizon and a $75-million provincial spend this year to promote Alberta tourism.

The 2026 Grey Cup in Calgary will bring in an estimated $50 million, he said, and so will the 2027 international hockey World Juniors in Edmonton and Red Deer.

World Cup Hockey comes to Alberta in 2028 and is expected to generate $200 million in visitor spending.

Boitchenko said money raised by the car rental tax and tourist levy “goes back to general revenue to support Alberta families.”

Tourism puts demands on infrastructure, so “we have to make sure tourists pay their fair share” through fees and taxes.

But the tourist industry association asserts that knock-on effects aren’t worth an estimated $102 million a year in government revenue generated.

“Our analysis is clear: the tax juice isn’t worth the squeeze,” a news release quotes Darren Reeder, TIAA’s president and CEO, as saying.

“At a time when Alberta’s visitor economy has strong momentum and national attention during Tourism Week, current policy decisions are reversing that progress and putting future growth at risk,” he said.

National Tourism Week ends today across Canada.

The report — called 2026 Economic Impacts of Alberta Tourism Fee Increases and Political Uncertainty — comes out of a TIAA survey of 157 tourism and hospitality businesses and an economic analysis by the public policy consulting firm Verum.

Visitors are changing their behaviour “in ways that directly reduce economic activity” rather than absorbing increases, the TIAA release says.

The report says that 42 per cent of tourism businesses have already postponed, scaled back or redirected investments.

And 60 per cent of them expect political activity like a referendum on separation would cause them to further delay or halt their investment decisions.

Boitchenko, the member for Drayton Valley-Devon, said he’ll continue talking with industry representatives to address their concerns.

Although asked by reporters, he didn’t directly address the contention that political uncertainty in Alberta is reducing tourism investment.

Alberta “remains the most affordable place to live across Canada,” he said.

The increases aren’t major dings to the tourist pocketbook, he maintained.

The tourism levy increase of two percentage points will tack just three dollars onto a $150 bill for a night’s accommodation, he noted.

George Lee, Local Journalism Initiative Reporter, The Macleod Gazette