Canadians say that new U.S. income tax provisions have already cost them $16 million in canceled conventions and could mean a loss of half of the $125 million that Americans were expected to spend at conventions in the country during 1977.
They want an exemption for Canada but are not counting on favorable reaction from U.S. lawmakers - especially after Canadian nationalists sponsored income tax changes that killed the Canadian edition of New York-based Time magazine last year.
The tax reforms, effective Jan. 1, allow Americans to claim tax reductions for two conventions abroad every year if they spend 50 per cent of their time at the conventions and attend two-thirds of business sessions. In addition, living expenses are deductible only to the relatively modest limits set for traveling U.S. government employees - $45 or $48 a day in most Canadian cities.
Tourist and convention authorities here say U.S. organizations have canceled or deferred plans for 19 conventions in Montreal, 12 in Toronto and eight in Vancouver.
"We are yelling like hell and hoping the government can bring some pressure on the Americans for an exemption," Frank Boodworth of the Montreal Convention Bureau said.
The Ottawa government responded with a note to the State Department seeking an exemption and saying the tax changes posed "a very real impediment" to the tourist and convention trade. Officials here say they received a polite but noncommittal reply - the request will be considered when the time comes to review the tax changes.
At the same time, the travel industry has joined with U.S. and Mexican travel organizations in a lobbying campaign in Washington for a North American exemption. Travel groups have formed a lobby organization called the council for Preservation of Worldwide Executives, the professional association for the officials of professional associations.
Despite pressure from the travel industry, the Ottawa government does not view the situation as a serious new problem between the two countries. The Canadian side is being carried mainly by Len Marchand, a junior Cabinet minister, and the subject is not expected to come up when Prime Minister Trudeau meets President Carter in Washington later this month.
The travel industry is launching a campaign to convince Americans to hold their meetings in Canada despite the tax restrictions. Convention bureaus in most cities are offering to provide staff to count heads at every session of U.S. meetings, sending delegates home with documented proof that they attended two-thirds of their groups' business sessions.
In Ottawa, the country's third busiest convention city, some hotels will help convention-goers stretch the $46 daily allowance by including a cheap continental breakfast in the room rate. Ottawa convention bureau manager Glen Moore says Ontario travel promoters will have hospitality rooms at conventions of U.S. organizations to ply delegates with samples of local food and drink. The aim is to reduce the delegates expenses while urging him to return for a holiday.