Despite a last-minute reprieve (for 30 days at least), travel trade organizations on both sides of the border are condemning the prospects of tariffs (which were to take effect Feb. 4) by the US on Canadian goods, agreeing that the tax could impact the number of Canadian travellers south of the border and result in industry job losses in both countries.

The prospect of a 25% tariff (10% on energy) has already seen a drop in the Canadian dollar, which makes purchases of any kind in US dollars more expensive. On Monday the dollar had marked its lowest level since 2003.

Before the late-afternoon decision Monday to pause implementation of the tariffs – a move Ontario premiere Doug Ford said he hoped would allow cooler heads to prevail – CATO, ACTA and the US Travel Association all took aim at the tax.

Jean Hébert, Executive Director of the Canadian Association of Tour Operators (CATO) stated “These tariffs will cause significant harm to our economy, leading to job losses, increased costs for goods, and reduced discretionary spending for consumers on both sides of the border. This situation will negatively impact the tourism and travel industry.”

He added, “The longstanding reciprocity between the US and Canada is at risk. These tariffs are not only economically detrimental but also have far-reaching consequences that could disrupt the strong ties between our nations. Our relationship has been built on decades of collaboration and respect, allowing our economies to thrive and our citizens to experience the richness of each other’s cultures.”

Hébert noted that CATO members employ over 20,000 full-time and thousands of part-time and contract employees in Canada, generating more than $1 billion in labor income and over $8 billion in economic output, of which $340 million was directed to the US. And that’s only a small fraction of the total spending by Canadians travelling to the US, with over 6.5 million Canadians visiting the US in the second quarter of 2024 alone.”

“The tourism industry, a vital economic driver for both Canada and the United States,” continued Hébert, “is particularly vulnerable to the consequences of these tariffs. Increased costs are likely to be passed on to consumers, reducing their purchasing power and making travel much less affordable for Canadians and Americans alike.

“With travel being a significant contributor to economic growth, a decline in consumer spending in this area will have ripple effects throughout our industry and beyond. One of the most alarming consequences of these tariffs is the potential for widespread job losses and creating a vicious cycle that is difficult to reverse.”
US Travel Association

The US Travel Association (USTA) similarly acknowledged that the new tariffs have the potential to impact Canadian visitation to and spending in the United Sates, stating: “Canada is the top source of international visitors to the United States, with 20.4 million visits in 2024, generating $20.5 billion in spending and supporting 140,000 American jobs. A 10% reduction in Canadian travel could mean 2.0 million fewer visits, $2.1 billion in lost spending and 14,000 job losses.”

USTA noted Prime Minister Justin Trudeau’s message to Canadians: “Now is the time to choose Canada… It might mean changing your summer vacation plans to stay here in Canada and explore the many national and provincial parks, historical sites, and tourist destinations our great country has to offer.”

According to USTA, 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.

ACTA

ACTA also trashed the tariffs. “While travel agencies and advisors may not be directly targeted, the economic consequences will be severe – higher costs for businesses, weaker consumer confidence and reduced travel spending,” the association said.

Calling on the US administration to reverse the tariffs not only on Canada but other “key allies” (Trump paused Mexico tariffs for a month on Monday), ACTA added, “Travel is an essential economic driver, and policies that undermine confidence in our markets threaten the livelihoods of thousands of Canadian travel professionals. The time to act is now.”

Not surprisingly, sentiment by Canadian travel industry professionals on social media was largely negative.

“So, Trumps slaps a 25% tariff on goods from Canada, the most loyal friend the US has ever had, and a 10% tariff on goods from China, which has no respect for human rights and is trying to take over areas of the world that are vital to US interests. So, okay!”

Another: “As a longstanding American friend, I am saddened and outraged by the disgusting tariffs imposed on Canada that can cause hundreds of thousands of jobs. The majority of Americans voted to support our massive loss of jobs.”

Meanwhile, postings on Instagram in the US were equally outraged.

“We are with you CANADA! As an American, I stand w you! Do NOT be intimidated, bullied into this bull,” said one.

Another simply: “Trump is killing our country.”

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