The familiar stream of Canadian licence plates heading south thinned dramatically in 2025, and the financial impact was impossible to miss. Canadian residents spent C$18.8 billion on visits to the United States, down 15.1 per cent from a year earlier—a decline of roughly C$3.3 billion. At the same time, domestic tourism spending climbed to C$81.3 billion, while overseas trips and expenditures also increased.
The shift was more than a temporary change in vacation plans. Political tensions, “Buy Canadian” sentiment, a weak dollar and concerns about value all influenced where households chose to spend limited travel budgets. For American hotels, restaurants, retailers and attractions—especially near the border—the result was fewer customers. For Canadian destinations, it created a rare opportunity to keep more tourism dollars circulating at home.
A $3.3-Billion Retreat From a Familiar Market
The headline number comes from a sharp reversal in a travel relationship that had long felt almost automatic. Statistics Canada recorded C$18.8 billion in Canadian spending during U.S. visits in 2025, 15.1 per cent less than in 2024. That percentage implies the previous year’s total was approximately C$22.1 billion, leaving a gap of roughly C$3.3 billion. Leisure travel accounted for most of the pullback: spending on U.S. holidays and recreational visits fell by C$2.2 billion to C$12.1 billion.
The decline was not limited to one type of traveller. Leisure visits to the United States dropped by 3.2 million, or 21.5 per cent, while trips to see friends and relatives also decreased. That matters because Canadian tourism spending reaches far beyond hotel rooms. It includes meals, shopping, attractions, local transportation and other purchases that support workers in destination communities. A cancelled weekend in Buffalo or a skipped winter trip to Florida may appear small on its own, but millions of similar decisions produced a multibillion-dollar change in spending.
Fewer Trips, but the Remaining Travellers Spent More
Canadian residents made 23.1 million trips that included a U.S. visit in 2025, down 23.5 per cent from 2024 and 26.7 per cent below 2019. Spending fell by a smaller 15.1 per cent. That difference suggests the Canadians who still travelled south tended to spend more per recorded visit, stay longer, choose costlier travel or absorb higher prices and exchange-rate costs. The United States did not lose every high-value traveller, but it lost a substantial amount of overall traffic.
The pattern remained visible late in the year. During the fourth quarter, Canadians made 5.4 million U.S. visits, a 24 per cent annual decline, and spent C$4 billion, down 16.4 per cent. Overnight visitors spent an average of C$1,138 per trip and stayed approximately 5.1 nights. Families who kept longstanding holiday plans or had relatives to visit still crossed the border. Discretionary day trips, shopping runs and quick weekend getaways, however, were much easier to cancel or replace with alternatives closer to home.
Border Communities Felt the Loss First
The national total became especially tangible in American communities built around Canadian traffic. A December 2025 report from the minority staff of the U.S. Congress Joint Economic Committee said passenger-vehicle crossings from Canada into New York fell more than 17 per cent during the first ten months of the year. In a North Country Chamber of Commerce poll cited by the report, 83 per cent of businesses reported fewer Canadian customers and 35 per cent said they had reduced staffing.
Similar patterns appeared across the border. Passenger-vehicle crossings from Canada were reported down approximately 25 per cent in Maine, more than 24 per cent in Washington and more than 28 per cent in Vermont. The congressional report also said Canadian credit-card spending in Vermont fell 49 per cent between January and September compared with the same period in 2024. These places are accustomed to Canadian families filling hotels, buying fuel, shopping and eating locally. When that traffic disappears, the effects quickly reach servers, retail employees, independent businesses and communities dependent on visitor-generated revenue.
Canada Captured More of Its Own Travel Budget
As U.S. travel weakened, more money stayed within Canada. Canadian residents made 342 million domestic visits in 2025, up 1.5 per cent from 2024 and 2.5 per cent above 2019. Domestic tourism expenditures reached C$81.3 billion, an 8.7 per cent annual increase and 41.8 per cent more than in 2019. Some of that spending growth reflected higher prices, but the increase in domestic visits shows that the change was not purely the result of inflation.
The second quarter offered a clearer view of the economic lift. Domestic tourism spending increased 2.9 per cent, helping real tourism GDP grow 1.3 per cent even as economy-wide real GDP by industry declined 0.2 per cent. Tourism employment rose to 712,100 jobs, with gains in food services, recreation and entertainment. Money that might once have gone to an American hotel, restaurant or attraction was more likely to support a Canadian business instead. For seasonal destinations, that redirection could mean stronger bookings, fuller dining rooms and more working hours for local employees.
Hotels, Restaurants and Attractions Shared the Gain
The domestic shift was not confined to one corner of the tourism economy. In the second quarter of 2025, Canadian spending on accommodation services rose 6.5 per cent, while spending on food and beverage services increased 3.9 per cent. Non-tourism purchases made during trips, including retail goods, also increased. This helps explain why a decision to vacation closer to home can benefit considerably more than the hotel, cottage or campground listed on the original booking.
A family replacing a U.S. road trip with a week in Quebec, Nova Scotia or British Columbia may still buy fuel, eat at restaurants, visit museums and pay for recreational activities. Those purchases flow through suppliers, workers and public finances. Statistics Canada estimated that every C$100 spent by Canadian tourists in Canada generated an average of C$25.14 in government revenue in 2024 through consumption taxes, income taxes and other channels. The figures do not mean every Canadian destination benefited equally, but they demonstrate how travel spending retained at home can circulate through a much broader economic network.
Overseas Destinations Also Won Canadian Business
Not every traveller who avoided the United States chose a staycation. Canadian residents made 14.3 million overseas visits in 2025, up 10.2 per cent from 2024 and 16.3 per cent from 2019. Spending on those visits climbed 17.5 per cent to C$31.3 billion. That contrast is important: Canadians did not simply stop travelling. Many redirected their plans toward destinations that felt more appealing, welcoming or worthwhile.
The fourth quarter showed where some of that demand went. Mexico received 673,000 Canadian visits, followed by France with 236,000 and the Dominican Republic with 231,000. Overseas travellers spent an average of C$2,278 per visit and stayed 13.4 nights during the quarter. These trips are generally more expensive than a short U.S. getaway, yet demand still increased. That weakens the argument that the U.S. decline was caused only by squeezed household budgets. Cost mattered, but destination preference, political sentiment and the desire for a different experience also appear to have influenced decisions.
Politics Became Part of the Vacation Decision
Statistics Canada linked the abrupt change in travel patterns to political tensions that intensified after the new U.S. administration took office in early 2025. Tariff threats, “America First” policies and repeated rhetoric involving Canada altered the emotional calculation behind a trip that had once seemed routine. For some households, avoiding the United States became a practical expression of support for Canadian businesses rather than merely a change in itinerary.
Bank of Canada research captured that shift while it was happening. In its second-quarter 2025 consumer expectations study, 55.1 per cent of respondents planned to spend less on U.S. vacations because of the trade conflict, while 34.8 per cent planned to spend more on vacations in Canada. About 60 per cent also intended to increase spending on domestic goods. Follow-up interviews showed that some Canadians still liked the United States and had personal connections there but did not feel comfortable directing discretionary money south. That distinction helps explain why the downturn became broader and more persistent than a normal seasonal fluctuation.
A Weak Canadian Dollar Added Another Barrier
Political frustration arrived alongside an unfavourable exchange rate. The Bank of Canada’s annual average showed that one U.S. dollar cost C$1.3978 in 2025, compared with C$1.3698 in 2024. That was approximately a two per cent increase in the Canadian-dollar cost of U.S. currency before credit-card fees or other conversion charges. A US$1,000 hotel, dining and entertainment bill therefore translated to roughly C$1,398 at the 2025 annual average rate.
The currency difference alone cannot explain a 23.5 per cent drop in U.S. visits, especially because Canadians increased travel to several overseas destinations. It did, however, make an already sensitive decision easier to reconsider. American hotel rates, restaurant prices, resort fees and attraction tickets all become more noticeable when converted into Canadian dollars. A domestic trip removes the foreign-exchange penalty, while a longer international trip may feel more distinctive for a similar total cost. The weaker dollar acted as an amplifier: political tensions reduced the desire to go, while the final price made staying away easier to justify.
The U.S. Is Trying to Win Canadians Back
The stakes are significant because Canada has traditionally been one of the United States’ most important international visitor markets. Using its own methodology and U.S.-dollar figures, the U.S. Travel Association estimated that 20.4 million Canadian visits in 2024 generated US$20.5 billion in spending and supported 140,000 American jobs. Its early warning suggested that even a 10 per cent decline could erase US$2.1 billion in spending. The eventual Canadian pullback was considerably larger by several measures.
There are early signs of a partial rebound, but not a return to normal. Preliminary Statistics Canada data showed Canadian return trips from the United States rising year over year in April, May and June 2026. However, June trips remained 28.7 per cent below June 2024, and the agency said the apparent increase partly reflected comparison with an unusually weak 2025 base. Brand USA is preparing a new Canadian marketing campaign, while Tourism Economics forecasts 16.7 million Canadian arrivals in 2026. Rebuilding demand may require more than advertising. Prices, confidence at the border and the broader political relationship will determine whether Canadians restore their old travel habits.
