Question

It is common for provincial governments to justify subsidies to the tourist sector (or any other sector, for that matter) based on the argument that jobs will be created, and the associated additional benefits (tax revenue, etc.)

a) Does the validity of this argument change if the increased employment in the province is partially due to the arrival of out of province workers?

b) For PEI specifically, is this argument more valid during the peak tourism season, or in the offseason?

Answer 1

The argument for subsidies based on job creation can change if employment is due to out-of-province workers, as they might send earnings out of the province, increasing pressure on resources without fully benefiting the local economy. In PEI, this argument is more valid during the peak tourism season as there is higher demand for temporary jobs, but less so in the offseason.

Step-by-step explanation:

Provincial governments often justify subsidies to sectors like tourism based on job creation and additional benefits such as tax revenue. However, the validity of this argument can change if the increased employment in the province is due to out-of-province workers, for several reasons:

• Local economic benefit might be reduced as these workers may send a portion of their earnings out of the province.
• The pressure on local resources and infrastructure could increase without corresponding increases in local employment.

For Prince Edward Island (PEI), this argument is particularly valid during the peak tourism season. During this time, the tourist sector is a dominant economic activity and can provide temporary employment opportunities to meet the demand of increased tourist activity. Offseason, the demand for labor is lower and the argument for subsidies may be weaker since the same level of employment is not sustainable year-round.