- Canadians taking road trips to the US dropped by 23% last month, per Statistics Canada.
- Outgoing PM Justin Trudeau urged Canadians to take domestic vacations instead of visiting the US.
- A business owner told BI he fears Trump’s tariffs may cause him to lose Canadian clients.
Canadians are pulling back on travel to the US amid a scrap between the two nations over tariffs first imposed by President Donald Trump.
According to Statistics Canada data released Monday, the number of Canadians driving to the US fell 23% in February compared to the same month last year, marking the second consecutive monthly decline and the second decline observed since March 2021.
Leisure bookings are also taking a hit. Flight Centre Travel Group, a major travel agency in Canada, told Business Insider that they saw a 40% decrease in leisure bookings to the US in February year over year.
“While Canadians remain eager to travel, they are increasingly shifting their focus to destinations outside the US,” Amra Durakovic, spokesperson for Flight Centre Travel Group Canada, told Business Insider.
The downturn follows a call from outgoing Prime Minister Justin Trudeau — who is set to be replaced by Mark Carney on Friday — for Canadian citizens to reconsider visiting the US and instead support domestic tourism.
His comments came in response to Trump issuing executive orders on February 1 to levy 25% tariffs on imports from Canada and Mexico.
One online survey suggested that Trudeau’s message was resonating. A Leger survey of around 1,500 Canadians found that nearly half said they were less likely to visit the US this year compared to last year, while six in 10 planned to vacation in Canada instead.
“The drop in Canadian visits is closely linked to the US tariffs imposed on February 1,” Rachel J.C. Fu, director of the University of Florida’s Eric Friedheim Tourism Institute, told BI.
“The 25% tariffs likely increased economic tension between the two countries, influencing Canadian consumer sentiment and travel choices,” she said, adding that Trudeau’s comments further discouraged travel to the US.
Economic fallout for the US
A drop in Canadian visitors could come at a cost to the US economy.
Last month, the US Travel Association estimated that a 10% decrease in Canadian travel could result in $2.1 billion in lost spending and 14,000 job losses, with Florida, California, Nevada, New York, and Texas — Canadian tourists’ top US destinations — most affected.
While the US travel and tourism industry is projected to generate $223.64 billion in 2025, losses could exceed current estimates if tensions persist, Adam Sacks, president of Tourism Economics, told BI.
“Canada is the US top visitor market, so the stakes are high,” he added.
Tony Poletti, owner of the family-run Marketside Restaurant in Niagara Falls, NY — which sits on the border with Canada — told BI: “It’s just a matter of time before we feel the impact of it.”
“It’s going to have a bigger impact on businesses in Niagara County than people could imagine,” he added.
Poletti, whose family has run the restaurant since 1939, said his “very dedicated” Canadian customer base has already expressed reluctance to travel to the US.
One longtime Canadian client told him her husband refused to let her visit because he was “very upset” by Trump’s tariffs.
“What Washington is doing is they’re cutting off their nose to spite their face,” he said, adding: “It’s not going to be long before it’s going to hurt Americans.”
Market jitters and long-term risks
Economic uncertainty has already rattled financial markets this week.
Wall Street plunged on Monday after Trump refused to rule out a recession, saying the US is in “a period of transition” in a Sunday interview on Fox News.
Stocks slid again Tuesday after Trump wrote on Truth Social that he instructed his commerce secretary to place an additional 25% tariff on steel and aluminum coming from Canada into the US, bringing the tariff rate on those imports to 50%.
He later backtracked, with his trade advisor, Peter Navarro, telling CNBC on Tuesday afternoon that the 50% tariffs on Canadian steel and aluminum would no longer go into effect on Wednesday.
Markets continued to slide Thursday, with the S&P 500 entering a correction.
Fu said that if the tariffs remain in place and continue to strain economic relations, the Canadian travel slump “could last for months or even two more years. “
“Unless the trade dispute is resolved or new incentives encourage Canadian travelers to return, the US tourism industry may need to prepare for a prolonged downturn in Canadian visitors,” she added.
