Total tourism expenditure in Canada - Data and Analysis (1986-2032)

Total tourism expenditure is forecast to rise 3.2% to $115.2 billion in 2026, as international visitors drive growth and offset a stalled domestic market. US travellers are returning after a sharp pullback in 2025, with cross-border trips to Canada climbing through the summer, while overseas visitors continue to add higher-value spending. The FIFA World Cup gave the sector a timely lift, as matches in Toronto and Vancouver boosted spending on accommodation and food services. Domestic spending, which carried the sector through 2025, has flatlined. Canadians are gradually resuming trips to the US, pulling vacation budgets away from home-country destinations, while lower spending on air travel and vehicle fuel has held back growth. A shrinking population is also narrowing the domestic traveller base. Elevated borrowing costs and soft job growth keep many households cautious about discretionary travel, limiting the strength of the rebound. Tourism expenditure has climbed at a compound annual rate of 14.3% over the five years through 2026, though nearly all of that gain came early in the period. Spending rebounded sharply from a weak 2021 base, as international visitors returned in force, airlines rebuilt route networks and business travel resumed. Conferences, festivals and major events filled hotel rooms in Canada's largest cities, while overseas markets in Europe and Asia restored their contribution to high-value spending. Busier cruise seasons on both coasts and a recovery in visiting-friends-and-relatives travel added further support. Momentum faded as the rebound ran its course. Persistent inflation and the Bank of Canada's aggressive rate hikes squeezed household budgets, prompting travellers to shorten trips, choose closer destinations and trade down on accommodation. High airfares and labour shortages in hotels and restaurants constrained capacity during peak seasons, pushing growth into the low single digits by 2024. Trade tensions reshaped the market in 2025. US tariffs and political rhetoric sparked a widespread Canadian boycott of US travel, redirecting vacation spending toward domestic destinations. That shift came at a cost: US visits to Canada also fell as cross-border relations soured, and the domestic surge only partly offset lost American spending. Overseas visitors helped fill the gap, aided by expanded air routes from Europe and Asia, keeping total spending on a modest upward path heading into 2026.