Decline in Canadian Travel to the U.S. Threatens $50 Billion Deficit
Trips from Canada to the U.S. are on the decline, potentially widening the United States’ $50 billion travel and tourism deficit. As the top source of international visitors to the U.S., Canada plays a critical role in the nation’s travel industry. However, a variety of factors, including political tensions and unfavorable exchange rates, have caused Canadians to cut back on travel to the U.S., with other countries potentially following suit.
Experts attribute this pullback to several issues, such as the U.S. political climate under President Donald Trump’s trade policies and his statements on annexing Canada. Additionally, high-profile detentions of visa-holding travelers, long wait times for visas, and other policies have contributed to tensions with close allies. As a result, Canadians are increasingly opting for other travel destinations.
In response to the declining number of Canadians visiting the U.S., a White House spokesperson said that “Canadians will no longer have to endure the inconveniences of international travel when Canada becomes our 51st state.” This controversial statement followed earlier comments from President Trump on trade issues and international relations. Former Canadian Prime Minister Justin Trudeau also encouraged Canadians to explore more of their own country, suggesting they consider staying within Canada rather than traveling abroad.
The decline in cross-border travel is raising concerns within the U.S. travel industry, which generates over $1 trillion annually in direct spending. The U.S. Travel Association noted that challenges such as concerns about America’s “welcomeness,” a slowing economy, and recent safety issues are factors impacting the country’s tourism sector. These challenges are especially concerning as international tourism plays a significant role in U.S. exports.
The U.S. already faces a travel deficit, with more Americans spending money abroad than the country earns from foreign travelers. In 2024, the U.S. travel deficit exceeded $51 billion, with Canadians accounting for the largest group of visitors to the U.S. However, the number of visitors from Canada has been declining. In February 2025, return flights from Canadians fell 13%, and car travel dropped by 23%. Additionally, hotel demand along the U.S.-Canada border has seen reductions in some areas, including Bellingham, Washington, and Niagara Falls.
Canadian airlines are also adjusting their routes in response to the decline in U.S. demand. Flair Airlines canceled its Toronto to Nashville route, while WestJet reported a shift in Canadian customers opting for destinations in Mexico and the Caribbean instead of the U.S.
As the U.S. travel industry grapples with the consequences of these shifts, the potential for even deeper travel deficits looms. International visitors tend to stay longer and spend more money than local tourists, making them an essential part of the U.S. tourism economy. The U.S. Travel Association has emphasized the need for action to improve America’s competitiveness in the global tourism market.
Further complicating matters, several countries have issued travel warnings about visiting the U.S. The United Kingdom, Germany, France, and other nations have raised concerns due to issues such as detentions of visa holders and executive orders targeting travelers with gender identity discrepancies. These travel warnings could deter international visitors, especially first-time travelers, potentially leading to billions in lost revenue for the U.S. tourism industry.
As travel dynamics continue to shift, both the U.S. and Canada face economic challenges tied to the evolving landscape of international tourism.
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