Posthaste: Trump’s loss is Canada’s gain as Canadian tourists stay home

Donald Trump’s trade policy has not been kind to many Canadian industries, but inadvertently he has handed one a big boost.

Tourism in Canada changed dramatically in 2025, finds a new study by Desjardins Group, as political tensions between the United States and Canada persuaded many Canadians to spend their money at home.

“In 2025, tourism trends were defined less by where Canadians chose to go than by where they chose not to go,” said Desjardins senior economist Kari Norman.

Canadians’ travel to the United States dropped by 25 per cent last year — that amounts to 10 million fewer trips across the border.

“What made the 2025 story particularly encouraging for domestic operators was that much of the spending diverted from cross-border travel stayed in Canada,” she said.

Spending on domestic tourism rose 10 per cent in the first three quarters of 2025 as Canadians made almost 6 million more day trips and 2.6 million more overnight stays within their own country. They also stayed longer and spent more on domestic trips than the year before.

The surge in Canadians spending their leisure time within Canada has also helped the economy. Tourism jobs rose 3 per cent during the year, which is more than double the 1.4 per cent increase across the economy as a whole, said Norman.

Total tourism employment is up by more than 30,000 jobs from 2019, growing to nearly 3 per cent of total employment in Canada.

Not all of the tourism diverted from the States stayed in Canada. Canadians also took about 700,000 more trips overseas during this period with interest extending beyond the traditional jaunts to Mexico and the Caribbean to more distant choices in Europe and Asia.

And more foreigners are coming here. Trips to Canada by U.S. residents rose almost 3 per cent in the first two months of 2026, with overseas visitors increasing by about the same rate.

As we enter the peak tourism season, the pro-Canada sentiment driving the shift in travel patterns looks set to continue, said Desjardins.

Trips south of the border were down 18 per cent in the first two months of 2026 from last year and down 28 per cent from 2024.

A recent Leger poll cited by Desjardins found that 70 per cent of Canadians say they are less likely to travel to the U.S. The top four reasons all involve tensions with the United States and include Canadians not feeling safe nor welcome in the country.

The poll also found that 67 per cent intended to travel within Canada this spring, a share that is up sharply from recent years, said Norman.

There are risks on the horizon — namely higher fuel costs from the Iran war and upcoming negotiations over the Canada-U.S.-Mexico-Agreement.

Fuel costs may actually support the trend by encouraging Canadians to take more road trips within the country, especially now that Ottawa has suspended the fuel excise tax until Labour Day, said Norman.

Trade talks could go either way. A hostile outcome could harden Canadians’ resolve to stay home, while a more positive outcome that eases political frictions could partially restore cross-border travel.

“Either way, trade developments have the potential to influence sentiment by dominating the news cycle as the peak summer travel season approaches,” she said.

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So far the Iran war and oil disruption have trimmed about 30 basis points from global growth expectations, but if the conflict continues the economic hit will deepen, say economists with Toronto Dominion Bank.

TD says if tanker traffic stays disrupted into mid-year and oil remains above US$100 per barrel its forecast for global GDP will drop to the mid-2 per cent range.

“That’s a far cry from the 3.1 per cent of our March forecast and gets uncomfortably near to a broader downturn,” said TD.

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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.

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