As the tariff and trade conflict with the United States continues, it has been reported that Canadians have been taking their own individual trade action against the United States by cancelling their trips and visits and taking their tourism dollars elsewhere. The rather low state of our currency relative to the USD is another factor. The numbers according to US border counts have been declining since December with February recording roughly 2.2 million people in passenger vehicles entering US border states from Canada which is 500,000 fewer than the month previous. Statistics Canada has reported that the number of Canadian resident return trips by automobile from the US in February totalled 1.2 million – a 23 percent drop year-over-year.
Canadians have always travelled to the United States for winter getaways and living in the case of Snow Birds. In general, Canadian proximity to the United States makes leisure and shopping trips convenient especially with border town residents who are more likely to zip over the border for purchases. The most classic phase of this was the well-chronicled cross-border shopping mania of the late 1980s and early 1990s when a relatively high dollar, rising per capita incomes in Canada, a large price difference in gasoline prices and the onset of the GST saw a surge in trips. In 1988, a total of 51.3 million Canadians returned from trips to the United States (all modes of travel) of which 36.2 million were Same Day Automobile Trips. These numbers then began to surge dramatically and peaked in 1991 at 79.4 million Total Trips and 59.1 million Same Day Automobile Trips. By 1993, Total Trips had declined down to 66.7 million while Same Day AutomobileTrips had fallen to 48.3 million.
However, as the two accompanying figures illustrates for All Trips and Same Day Automobile Trips, when monthly data from January 1972 to January 2025 is plotted, the period from 1972 to the early 1990s marks the rise of cross-border travel while the period since has been marked by a long-term decline. There was a bit of a recovery that accompanied the appreciation of our dollar from 2002 to 2011 but then the decline resumed followed by the precipitous drop of the COVID-19 pandemic. While there has been a recovery since the pandemic, the totals still have not reached the pre-pandemic highs. And, with the current trade war induced drop, one expects that we may l soon surpass lows last reached in the early 1970s.
Of course, the interesting question is what accounts for the decline since the early 1990s. Naturally, fluctuations in our currency are a factor. The long-term decline in the growth rate of our per capita income is another factor. However, what is probably more important is the change in the Canadian retail landscape in the 1990s in the wake of the cross-border shopping surge. In the 1990s, Canada saw the spread of Sunday Shopping and the arrival of big box retail including Wal-Mart. All of this created shopping opportunities that reduced the demand for cross-border shopping trips as Canadian retail became more competitive. Going forward, all these factors will pale as a depressant on cross border travel if there is a sustained and deliberate shift in Canadian travel habits away from the United States.
