How the trade war is turning into a tourism win for Canada

Calgary Herald

a day ago

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Meanwhile, traffic was up for both domestic and non-U.S. international flights at Canada's largest airports in April, according to Statistics Canada's latest monthly data on air passenger travel.
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Domestic traffic was up by 7.4 per cent to two million in April compared to the previous year. This modestly surpassed the 2019 pre-pandemic level by 1.5 per cent, Statistics Canada said.
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In April, the number of passengers screened for international flights other than to the U.S. was 1.4 million — up 7.1 per cent over the same month in 2024, and sharply higher — up 19 per cent — than the pre-pandemic level posted in April 2019.
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Americans are also visiting their northern neighbours less as trade tensions between the countries persist, with trips to Canada by U.S. residents declining for the third month in a row in April.
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How could Canada benefit from the changes?
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Domestic searches on popular vacation sites have significantly increased in 2025, with internal data revealing Canadians' appetite for homegrown holidays.
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Economic uncertainty and the weaker Canadian dollar have proved a silver lining for the tourism sector, the BDC said in a March report. While foreign visitors are important contributors to tourism in Canada, Canadians actually make up the biggest share of demand for tourism businesses at about 76 per cent, it said.
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Abacus Data said its survey shows that 19 per cent of Canadians who have either changed or cancelled their visit to the U.S. have shifted to travelling to different locations within Canada instead.
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The decline in flight bookings to the U.S. has driven some airlines to modify capacity for certain routes. Flair Airlines Ltd., for example, restarted some inter-Canadian routes earlier than planned this year due to the rise in local demand.
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Flight data released by OAG Aviation Worldwide Ltd. showed a 'collapse' in passenger bookings on flight routes between Canada and the U.S., dropping by more than 70 per cent in every month through to the end of September 2025.
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Domestic travellers aren't the only ones favouring Canada. French hotel group Accor SA, which owns 57 brands including Fairmont and Novotel, said Canada is gaining traction as a tourist destination as travellers increasingly avoid the U.S. for holidays.
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Desjardins principal economist Sonny Scarfone said in a June report that increased domestic tourism could act as a stabilizing force by offsetting weaker performance in industries that are more exposed to U.S. trade. Canada has traditionally recorded a travel services trade deficit, but this trend recently reversed, he said.
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'When Canadians redirect their vacation budgets to the local economy, the positive ripple effect extends well beyond the tourism sector itself,' he wrote.
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Scarfone said that given the current geopolitical climate and relatively weak loonie, Canada has the opportunity to further improve its travel trade balance in the coming quarters by encouraging domestic tourism and attracting more international visitors.
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Focusing on Quebec, he said that if half of the province's residents who plan on cancelling their trips to the U.S. were to redirect their spending domestically, the resulting boost — factoring in indirect economic effects — could add an estimated $900 million to Canada's GDP.
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TD Economics expects tourism spending in Canada to grow in the range of two to four per cent in 2025.
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While American spending is set to drag on the overall tally this year, with cross-border spending projected to decline by five to 10 per cent, domestic spending at home will offset much of that, TD economist Anusha Arif said in a June 26 note.
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Arif said that while hard data is still sparse, early indicators of travel within Canada are encouraging. According to a survey by TD Bank Group, 64 per cent of Canadians plan to travel domestically.
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She said growth in spending by domestic and non-U.S. international visitors is likely to deliver an overall net increase of $2 to $4 billion in overall tourism spending for 2025. Propelled by these tailwinds, Canada's tourism sector could hold up far better than what otherwise would be the case in 2025, Arif added.<