Oct 30, 2026
The U.S. travel sector ran a trade deficit of nearly US$14 billion last year as millions of Canadian travellers took their vacations elsewhere. It was the sector’s first deficit since data collection began in 1999, according to a report from Democrats on Congress’s Joint Economic Committee cited by Nevada Sen. Catherine Cortez Masto.
Now, Washington D.C. is trying to lure those travellers back. Last July, U.S. Trade Rep. Jamieson Greer told a Senate committee he’d fully support a bipartisan bill aimed at boosting travel with Canada and Mexico. He agreed the decline in tourism is problematic and would support the proposal “100%,” according to the Las Vegas Sun.
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Here’s the reason behind the slump, what this proposed bill would do and what it means the next time you book travel.
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How did U.S. tourism end up in the red?
A travel trade deficit means Americans spent more on trips abroad than international visitors spent in the U.S. The U.S. ran a travel surplus in 2024, but in 2025 it flipped to a multibillion-dollar deficit.
Canadians were a major part of that decline. In 2025, Canadian-resident return trips from the U.S. fell 25.4%, according to Statistics Canada (StatCan). That capped an 11-month streak of year-over-year declines the agency calls the deepest and most sustained on record outside the pandemic. Leisure visits to the U.S. dropped 21.5%, or 3.2 million visits, and Canadians’ spending on U.S. trips fell by CA$3.3 billion to CA$18.8 billion.
StatCan ties the pullback to the change in U.S. administration and its America First policies in early 2025, which brought tariffs on Canadian goods and talk of making Canada the 51st state. There are practical hurdles too: Canadians who stay in the U.S. longer than 30 days must now register with the U.S. government.
Many Canadians went elsewhere instead. Domestic visits rose by 5 million in 2025, and overseas visits climbed by 1.3 million, led by Europe (up 13.6%) and Asia (up 16.7%).
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Which U.S. regions are feeling it most?
Border states and warm-weather destinations are among the hardest hit, says Rachel J.C. Fu, chair of the Department of Tourism, Hospitality and Event Management at the University of Florida. In Las Vegas, Canadian visitors fell 17.4% last year, a drop of about 252,400, according to the Las Vegas Convention and Visitors Authority, the city’s tourism agency.
Fu told Business Insider that “In tourism, losing a visitor for one season is a revenue problem,” and once “travelers establish new vacation patterns, destinations have to compete to win them back.”
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Travel is showing some rebound from last year’s low point, but it’s far from normal. In September, American cross-border return trips by car were up 5.6% from the same time in 2025, but still down 31.1% from September 2024, according to preliminary data from StatCan. The agency noted a later Labour Day weekend helped lift September’s numbers.
Why is the U.S. changing its tune?
Travel is big business in the U.S. Visitors to the country spent US$1.4 trillion there in 2025, supporting more than 15 million American jobs, according to the U.S. Travel Association, a non-profit that represents the travel industry. Internationally, though, the country was losing ground. In a May 2025 forecast, the World Travel & Tourism Council, which represents the global travel industry, projected the U.S. would be the only one of 184 economies to see international visitor spending fall that year.
The bill, known as the USMCA Travel and Tourism Resiliency Act, was introduced in February by Cortez Masto and Kansas Sen. Jerry Moran, a Republican. It would direct Greer’s office to push for a travel and tourism working group under the Canada-United States-Mexico Agreement (CUSMA), known in the U.S. as USMCA. Other sectors, such as agriculture and textiles, already have working groups. The bill wouldn’t create one for tourism outright, since Canada and Mexico would have to agree. Nevada Rep. Dina Titus, a Democrat, has introduced a companion bill in the House.
Timing matters, too. The three countries held CUSMA’s first formal joint review on July 1, and the U.S. declined to renew the agreement for another 16-year term. The deal remains in force and now goes through annual reviews. If the bill passes, Greer’s office would raise tourism at the next review.
The U.S. Travel Association backs the bill: “Creating a Travel and Tourism Trade Working Group will strengthen North American cooperation, boost competitiveness, expand travel exports, and support the millions of American workers and businesses powered by travel,” said Erik Hansen, the association’s senior vice-president and head of government relations, in a statement released by Titus’s office.
Greer’s office leads trade talks with Canada, so his support matters. Cortez Masto has also co-sponsored the bipartisan VISIT USA Act, led by Alaska Sen. Dan Sullivan, a Republican, and Minnesota Sen. Amy Klobuchar, a Democrat. It would restore funding for Brand USA, the public-private partnership that markets the U.S. to foreign travellers, after a 2025 budget law cut its maximum federal match by 80%, from US$100 million to US$20 million. However, neither bill would lead to overnight changes to tariffs
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Money.ca asked Suzanne Acton-Gervais, president of the Association of Canadian Travel Agencies and Travel Advisors, which represents travel agencies and advisors across Canada, what her members are seeing in upcoming bookings.
“Canadians continue to have a strong appetite for travel, but they’re being thoughtful about where they go and how they spend their money,” she said. “The United States remains an important destination for winter getaways, cruises and visits with family and friends.”
“That said, travel patterns have changed,” Acton-Gervais added. “Some Canadians continue to choose familiar U.S. destinations, while others are looking at alternatives. There are several factors at play, including affordability, exchange rates, personal preferences and the broader political climate.”
“I often say that travel is trade. It’s an important economic driver that supports businesses, jobs and communities on both sides of the Canada–U.S. border. Strengthening relationships, offering good value and ensuring Canadians feel welcome will be important in the months ahead.”
What can travellers do?
You can’t control trade policy, but you can control what you spend on your next trip. Whether you boycott the U.S., go back or look elsewhere, here are some steps to protect your budget:
- Watch for travel deals. U.S. destinations that have lost Canadian visitors have reason to win you back. Compare prices and look for specials and last-minute deals, but book only through trusted sellers and read the cancellation terms
- Know your rights in the event of a cancellation. Read the airline’s refund policy before booking. The Air Passenger Protection Regulations, enforced by the Canadian Transportation Agency, the federal air travel regulator, cover some flight disruptions.
- Cut currency costs. Most Canadian credit cards add a foreign transaction fee of about 2.5% on top of the exchange rate for purchases in another currency. Some cards waive that fee, which can save you money on every purchase you make while travelling. Check your cardholder agreement or contact your card provider
- Buy travel medical insurance. Provincial health plans cover little of the cost of emergency care in the U.S., and hospital bills there can be exorbitant. Check what coverage your employer or credit card plan offers before you buy
- Consider a “stay-cation.” Canada is beautiful, vast, diverse and offers so much to curious travellers. The country’s own tourism sector benefits when you travel domestically, and there’s no currency exchange
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Melanie is an editor and fact checker who is passionate about proofreading and editing personal finance content. She specializes in breaking down complex topics into easily digestible details to help people make wise financial decisions.
