An increase in domestic tourism might be a side effect of ongoing tension between Canada and the United States. With Canadians choosing not to venture south of the border, local tourist attractions could witness an unprecedented surge in visitors. The Conference Board of Canada’s report, dating May 29, concludes that this boost could lead to an $8.8 billion expansion of the domestic tourism industry.
Based on their travel intention survey in April, the Board further predicts that only about 27% of Canadians plan a U.S. trip in the coming years. This indicates a significant decline from the more than 50% who expressed similar intentions in the same survey conducted last November.
Data from Statistics Canada back this trend, showing a 35.2% year-on-year decrease in the number of Canadians returning from the United States by road in April. This decline has persisted for four months in a row. Such a change highlights an unprecedented shift in travel decisions, steered by ongoing political and economic tumult.
The tourism industry had high hopes for the year 2025, hoping for revival after the pandemic-recovery phase post-COVID-19. However, the ensuing tariff disagreement initiated by the U.S. back in early March, following an extended period of threats from President Trump, has led to a surge in patriotic sentiment amongst Canadians, steering many towards domestic vacation plans.
The travel intention survey mirrored this change in sentiment, registering a rise in Canadians looking beyond U.S borders for their vacation plans. However, an even larger fraction expressed a shift in their travel plans from international destinations to local ones, aligning with the newfound ‘Buy Canadian’ wave.
The Board forecasts that the weakening Canadian dollar, a repercussion of the tariff disagreement, might further hinder Canadians’ plans to travel to the U.S. The lagging dollar could redirect the money Canadians usually spend on extended U.S. trips, potentially injecting billions into the local economy.
Some Canadians might wind up spending more than usual on local vacations, traveling longer distances, extending their stays, and the like. Even under austere assumptions, this shift in travel habits is predicted to reap favorable outcomes for the tourism industry for the current year.
Concerns regarding an economic downturn, linked to the tariff disagreement, may further induce Canadians to limit extravagant spending and opt for modest local holidays. More families might forego expensive visits to places like the Grand Canyon, choosing instead nearby camping retreats that save on cost but not on experience.
However, if the trade dispute results in a severe economic downturn for Canada, the general public might cut down altogether on their travel expenses, tempering the newfound enthusiasm for domestic tourism. In that case, the overall spike in the industry might not be as high as expected.
Statistics Canada also records a dip in the number of tourists entering Canada from the US, traditionally the largest source of inbound travelers. Despite these figures, Canada continues to ensure American tourists don’t feel alienated amidst the trade tensions, focusing criticism mainly at administrative and policy levels.
An open letter by the Tourism Industry Association of Canada forewarns that a prolonged decline in the number of American visitors could cause lasting damage. A swift drop in American tourism could jeopardize the livelihoods of the two million Canadians working in the sector and threaten the survival of operators across the nation.
The Association has called for an upgrade in the international marketing of Canada as a vacation destination and the implementation of measures to expedite the entry process for international tourists. They believe these efforts could help mitigate the existing challenges the tourism sector faces.
Canada being targeted by U.S. trade aggression is not an isolated incident. There is potential for an increase in the number of tourists from overseas, who might also opt to divert their travel plans from the U.S. due to concerns over President Trump’s efforts to disrupt global trade and plans to annex countries like Greenland.
In this uncertain global context, Canada might just benefit from the unintended consequences of international trade aggression. The turmoil could lead to a rejuvenation of Canadian tourism, making the most out of a challenging situation and potentially safeguarding numerous livelihoods in the process.