Canada’s domestic tourism industry could net billions due to U.S. trade war: report

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This article was published 03/06/2025 (490 days ago), so information in it may no longer be current.

OTTAWA – Canada’s tourism industry might be in for a boost as Canadians boycott the United States and spend their travel dollars closer to home this year.

In a report released May 29, the Conference Board of Canada estimates the net economic benefit for the domestic tourism sector could be as high as $8.8 billion.

The think tank said its April travel intentions survey suggests roughly 27 per cent of Canadian respondents are considering a trip to the U.S. in the next few years – down from more than 50 per cent in the same survey last November.

Statistics Canada data shows the number of Canadians returning to the country from the United States by car fell 35.2 per cent year-over-year in April – the fourth consecutive month of year-over-year declines.

“This shift is so unique. It’s driven by political and economic conflict,” said Kiefer Van Mulligen, senior economist at the Conference Board of Canada and the report’s author.

Van Mulligen said that 2025 was shaping up to be a return to normal for much of the tourism sector after years of recovery following the COVID-19 pandemic.

But then came the tariff dispute — kicked off by the United States in early March after weeks of threats from President Donald Trump — and with it, a wave of “buy Canadian” sentiment north of the border.

While the Conference Board’s travel intention survey shows an uptick in the number of Canadians saying they planned to travel abroad to destinations outside the United States, a larger share of those surveyed said they were shifting their holiday plans to domestic destinations.

The report predicts that a weaker Canadian dollar, dragged down by the tariff dispute, will also hold back U.S. travel plans.

Van Mulligen said that if Canadian travellers spend even a portion of the money they’d typically spend in the States on a lengthy overnight trip in Canada, the knock-on impact would add billions of dollars to the Canadian economy this year.

“We might actually see some people spending more than usual on a domestic trip, travelling farther, staying longer, things like that,” he said.

“Even under more conservative assumptions, it seems like a net positive for tourism this year.”

Fears of an economic slowdown tied to the tariff dispute could also encourage Canadians to rein in spending and opt for more affordable “staycations,” Van Mulligen said.

An Ontario family might, for example, opt to drop a few hundred dollars on a week-long camping trip in Algonquin Park rather than spend a few thousand dollars at the Grand Canyon for a similar stay.

But if Canada faces a steep downturn due to the trade dispute, Van Mulligen said, travellers might dial back their spending altogether, mitigating the size of the overall bump for Canadian tourism.

Statistics Canada data also shows that Canada is seeing a drop in visits from American tourists — typically the country’s largest source of in-bound travellers.

Van Mulligen said the Canadian response so far to U.S. trade aggression has been careful not to “alienate” American travellers.

“The rhetoric in the trade war has been aimed primarily at the administration and the policies,” he said. “Hopefully, Americans still feel welcome.”

The Tourism Industry Association of Canada warned in an open letter to Prime Minister Mark Carney dated May 16 that a “prolonged reduction of U.S. visitors could have detrimental effects.”

“The rapid drop in American visitors in a number of markets is already threatening the viability of operators across the country and putting at risk the livelihoods of the more than (two) million Canadians employed in the sector,” the letter read.

The group called for a boost in international marketing of Canada as a travel destination and measures to streamline entry for international visitors.

But Van Mulligen noted that Canada is not alone in feeling slighted by U.S. trade aggression.

He said Canada could also pick up some “slack” from overseas tourists alarmed by Trump’s efforts to upend global trade and annex nations like Greenland.

This report by The Canadian Press was first published June 3, 2025.