Abundant snow and cold weather in November and into December have given Quebec’s ski industry a much-needed shot in the arm after a disappointing 2006-07 season that at times felt like a preview of global warming.
Last year, the weather was warm, the rain heavy and the hills brown through the crucial Christmas ski season when resorts traditionally rake in more than a quarter of their revenue. The poor start to the season was a big reason behind a 6.1% drop in the number of days skied in Quebec last year, a season that was slow across most North American ski regions. Last year, only 44% of Quebec’s 75 ski resorts were able to generate a profit, compared to 59% in 2005-06. On $214 million in revenue from winter activities, resorts were able to eke out just $1 million in profit.
Although the mountains of the Laurentians, Eastern Townships and eastern Quebec are puny compared to the Rockies, skiing has a long and proud history in Quebec, where it is the No. 1 winter activity with 1.6 million skiers and snowboard enthusiasts. Resorts, including Intrawest ULC’s Mont Tremblant north of Montreal and Mont Ste-Anne near Quebec City, are also attractive to Americans, especially those from the eastern seaboard. The industry employs 33,500 people directly and indirectly and injects $800 million into Quebec’s economy.
The strong start to this year’s season hasn’t stopped the industry from wringing its hands over subpar profitability and the lack of capital investments required to keep the industry competitive and in shape to face the global warming challenge. Investments in expensive machinery such as snow-making equipment and lifts are urgently needed, the Quebec industry association says.
“With assets of more than $600 million and required investments estimated at $200 million, resorts have to be more and more ingenious to overcome their numerous challenges,” said Claude Péloquin, president of the Association des stations de ski du Québec in a statement. Capital investments, excluding real estate activities, have been falling for three years. They totalled just $25 million for the 2005-06 season, the most recent period for which figures are available.
But with additional investment, the industry actually believes it can turn global warming into a competitive edge over resorts in more southerly locales in the northeastern United States. The industry is also looking to benefit from an influx of snow-starved European visitors. “With climate change and our geographic positioning, Quebec possesses an undeniable commercial advantage that we must quickly capitalize on,” Péloquin says.
That’s why the industry is looking for help from the government. Instead of subsidies, the industry insists that it’s pitching for loans and loan guarantees in order to help boost capital investment.
The industry association recently met with Quebec Economic Development Minister Raymond Bachand to lay out the problems facing ski resorts, such as the reluctance of lenders to amortize loans for equipment over long periods, as well as high municipal tax levies.
Bachand is looking closely at a loan-guarantee program that would encourage private financial institutions to extend longer-term financing to resorts. “On the face value of what they say, it seems reasonable,” he says. “It’s too late for this season anyway. So, we have a couple of months to work with the financial institutions.”
But with Environment Canada calling for one of the coldest winters in the past decade, at least Mother Nature is helping Quebec’s ski industry this year. IE
Conditions improve at ski resorts
Snow, government help and new investment brighten the industry’s outlook
- By: Don Macdonald
- January 4, 2008 October 29, 2019
- 10:01
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