TORONTO — As political and economic uncertainty continues to shape the Canada-U.S. relationship, the Tourism Industry Association of Ontario (TIAO) remains steadfast in advocating for Ontario’s tourism sector. With the U.S. market accounting for 22 per cent of tourism spending in the province, cross-border travel and trade remain essential to the industry’s health.
Shifts in immigration policies, tariffs and trade agreements will significantly impact travel patterns, consumer behaviour and operator costs. TIAO had more than 200 businesses from across Ontario participate in its U.S. Market & Tariff Survey, providing valuable insights into the evolving landscape of U.S. visitation and trade.
Key findings and concerns include:
U.S. Inbound Market: While some regions have experienced a resurgence of U.S. visitors over the past year, others continue to struggle.
- Many businesses report that U.S. visitation remains below 2019 levels, with some experiencing a 50-per-cent decline.
- Forty-one per cent of respondents have seen fluctuations in U.S. visitor numbers over the past season, particularly in accommodation and outfitter sectors.
- Niagara region reports a strong rebound, with U.S. visitors contributing 41 per cent of total spending in 2024.
- Northwestern Ontario region, where U.S. travellers historically account for 80 per cent of tourism receipts, remains below pre-pandemic levels.
Exchange Rates – A Double-Edged Opportunity: The strong U.S. dollar presents an opportunity to attract more American visitors, but inconsistent marketing efforts are limiting Ontario’s ability to capitalize on this advantage.
- Some regions have seen a rise in U.S. visitors due to favourable exchange rates, while others remain below expected levels.
U.S. Goods and Services Sourcing: Rising costs threaten business stability. Many Ontario tourism businesses rely on U.S. suppliers for critical goods and services, making them vulnerable to cost inflation and tariff risks.
- Thirty per cent of businesses spend between $10,000 and more than $1 million annually on U.S. goods and services.
- Fifty per cent of businesses report spending between $10,000 and $100,000 annually on U.S. imports.
- The threat of new tariffs could further strain operational budgets, increasing prices for visitors and limiting business sustainability.
Uncertainty – A Barrier to Growth and Optimism: Political and economic volatility, border concerns and rising operational costs contribute to industry uncertainty.
- Misinformation about border crossing requirements continues to deter U.S. visitors.
- Businesses express concerns about tariffs, trade disputes and fluctuating Canada-U.S. relations.
- Lack of targeted marketing in key U.S. border states is limiting Ontario’s competitive advantage.
TIAO’s provincial pre-budget submission includes a number of recommendations that will not only help respond to current challenges but will strengthen the industry for the long term. These include:
- Investing $15 million in provincial tourism marketing to attract domestic, U.S. and international visitors.
- Creating a $20 million fund to secure national and international sport and business events.
- Expanding the Experience Ontario Fund by $10 million to enhance festivals and events that will draw more visitors.
- Close Municipal Accommodation Tax loopholes to strengthen destination marketing and municipal revenue.
- Addressing federal immigration shifts by developing new pathways to attract tourism students and workers.
- Improving transportation connectivity by expanding air, rail, motor coach and public transit options.
On the other hand, Canada is the top source of international visitors to the U.S., with 20.4 million visits in 2024, generating $20.5 billion in spending and supporting 140,000 American jobs, according to the U.S. Travel Association. A 10-per-cent reduction in Canadian travel could mean two million fewer visits, $2.1 billion in lost spending and 14,000 job losses.
The top five most visited states by Canadians — Florida, California, Nevada, New York and Texas — could see declines in retail and hospitality revenue, as shopping is the top leisure activity for Canadian visitors.
