A rather interesting, if somewhat unexpected, turn of events seems to be shaping up for Canada’s tourism sector in 2025. A new report from the Conference Board of Canada suggests a U.S.-led trade war, believe it or not, could actually provide a significant boost. The report points to a potential $8.8 billion injection into the domestic tourism scene, largely because Canadians might rethink their vacation plans, shifting away from the U.S. amid tariff squabbles and the not-so-strong Canadian dollar.
While a decrease in U.S. visitors certainly presents hurdles, a rise in domestic travel in Canada, alongside increased interest from international tourists, could indeed make 2025 a crucial year for Canada’s tourism comeback.
Trade Tensions Drive Domestic Travel
The U.S. tariff dispute, started by President Donald Trump back in March 2025, has noticeably changed Canadian travel patterns. Statistics Canada data shows a pretty significant drop – 35.2% in April compared to the year before – in the number of Canadians returning from the U.S. by car. And, this was the fourth month in a row that numbers had declined. The Conference Board’s April Travel Intentions Think Tank survey highlights this shift, showing that only about 27% of Canadians are considering a U.S. trip in the coming years, a marked decrease from over 50% in November 2024. “This change… it’s quite unique. It’s being driven by, political and economic conflicts,” according to Kiefer Van Mulligen, a senior economist at the Conference Board and also the report’s author.
Instead of heading south of the border, Canadians seem to be embracing the charm of domestic destinations. The survey reveals a growing leaning towards travel within Canada. Respondents are planning to check out local attractions, rather than deal with the higher costs and uncertainties tied to U.S. travel. That weaker Canadian dollar, which has been made worse by the trade dispute, is making U.S. trips less affordable, which, in turn, is encouraging Canadians to put that money towards overnight stays at home. Van Mulligen estimates that this shift could add billions to the economy. Some people might even spend more on longer, or more distant, domestic adventures, such as camping in Algonquin Park instead of, say, the Grand Canyon.
Economic and Behavioral Shifts
This trade war has also sparked a wave of “Canadian purchases,” as consumers increasingly prioritize spending locally. However, fears about a potential economic slowdown tied to the dispute could also lead to more conservative travel choices, perhaps resulting in affordable camping trips or shorter getaways. Van Mulligen points out that, even with more conservative assumptions, the overall impact on domestic travel in Canada is still expected to be positive, as Canadians look for value-driven experiences closer to home.
Despite the expected domestic boost, challenges do still remain. Statistics Canada’s data indicates a decline in the number of U.S. visitors, who are Canada’s largest source of inbound tourists. This decline could threaten the viability of many tourism operators. The Tourism Industry Association of Canada, in an open letter to Prime Minister Mark Carney on May 16, cautioned that a prolonged decrease in U.S. visitors could put the livelihoods of over 2 million Canadians working in the sector at risk. The association called for enhanced international marketing efforts and also simplified entry processes to attract global travelers.
Opportunities from Global Sentiment
Canada’s response to U.S. trade actions has, luckily, avoided alienating American tourists. Rhetoric has been aimed at U.S. policymakers rather than the citizens themselves. “Let’s just hope Americans still feel welcome,” Van Mulligen mentioned. Moreover, Canada could possibly benefit from international tourists who may feel let down by Trump’s trade policies and other controversial actions, such as his attempts to annex Greenland. This overall global feeling might drive visitors from Europe and Asia to choose Canada as a welcoming destination, giving the tourism sector an additional boost.
A Pivotal Year for Growth
As Canada finds its way through the U.S. trade war, 2025 is definitely shaping up to be a potentially transformative year for its tourism sector. The anticipated $8.8 billion in economic activity, alongside possible growth in international arrivals, could give the sector a noticeable advantage. By making the most of domestic enthusiasm and positive global feelings, Canada’s tourism sector could turn these trade tensions into something rather beneficial further solidifying its position and offering possibilities for expansion as a leading destination for travelers.