The
Canadian economy
is expected to come out ahead in 2026 on the
travel and tourism front
since people aren’t letting up on their
boycott of travelling to the United States
, according to
Royal Bank of Canada
economists.
“The
decline in travel
to the U.S. has been both sharp and persistent,” deputy chief economist Nathan Janzen and economist Abbey Xu said in a report on April 9 comparing 2024 and 2025 travel numbers. “But the larger offset has been increased spending on
travel and tourism within Canada
, helping to support the domestic sector.”
Trips by Canadians returning from the U.S. in March dropped 7.6 per cent year over over — 4.5 per cent by automobile and 13.8 per cent by air — according to Statistics Canada data released on Monday, but it said those numbers were affected by a base-year effect and such trips were down 34.9 per cent from March 2024.
Car and air trips
south of the border
have consistently fallen by double digits since Donald Trump was sworn in as president in January 2025, including by 22 per cent in January 2026 from the year before. Car trips fell 26.3 per cent compared with January 2025, while air travel fell 12.8 per cent.
“The weakness has been broad-based across different types of travel,” Janzen and Xu said in the report. “The outsized drop in vehicle crossings suggests shorter, discretionary cross-border trips have been particularly affected.”
They estimate same-day trips by Canadians to the U.S. account for nearly half of total travel.
But that doesn’t mean Canadians aren’t travelling, they said. For example, more people headed overseas between 2024 and 2025. There was also an increase of 4.9 per cent in Canadians returning from overseas getaways in March, and more Canadians returned from overseas than from the U.S. for the third straight month.
“But the larger offset has been increased spending on travel and tourism within Canada, helping to support the domestic sector,” the economists said.
In 2025, domestic tourism spending rose 2.7 per cent, offsetting a decline of 0.7 per cent by international visitors and echoing the “
Buy Canadian
” credo that people are practising in other spending areas.
Total tourism spending in Canada was up 1.7 per cent in 2025 versus 2024. In the fourth quarter, tourism gross domestic product (GDP) grew at an annualized rate of 4.8 per cent compared with an overall contraction of 0.6 per cent. It was the third straight quarter that tourism’s growth outpaced the overall economy.
RBC said dollars are being “recycled” at home, with a 5.6 per cent increase in dining accommodation and vehicle rental spending in 2025, while international spending contracted. There were also likely spillover effects in entertainment and recreation.
“Looking ahead, the reallocation in travel patterns is likely to persist in the near term, but not indefinitely,” Janzen and Xu said.
Domestic tourism spending is still coming in ahead of pre-pandemic averages by about 11 per cent.
RBC is calling for “modest” GDP growth this year and a “mixed outlook” for travel, helped by lower interest rates but hindered by slowing population growth, uncertainty around the trade fight with the U.S. and higher fuel costs.
“Growth has moderated from earlier post-pandemic surges, but still reflects steady resilience,” they said.
• Email: gmvsuhanic@postmedia.com
Canadians' travel-at-home ethos should help boost the economy but not indefinitely, RBC says
2026-04-13 18:39:50
