Canada’s Tourism in 2025: Steady Growth Amid Challenges, With Optimism for 2026

OTTAWA (TRI) — Canada’s tourism sector in 2025 demonstrated resilience in the face of economic headwinds and shifting global travel patterns, with overall spending and gross domestic product contributions showing modest gains despite declines in certain cross-border segments. According to data from Statistics Canada and Destination Canada, the industry generated nearly $160 billion in revenue, driven largely by domestic travelers and a rebound in overseas visitors. As the sector looks ahead to 2026, forecasts point to accelerated growth fueled by major events, enhanced marketing, and a focus on sustainable experiences, potentially pushing annual revenues past pre-pandemic peaks.

This report examines key metrics from 2025, including arrivals, spending, and regional impacts, while exploring strategies for 2026 amid evolving consumer preferences and external factors like currency fluctuations and environmental concerns.

A Year of Modest Expansion: Key 2025 Statistics

Tourism spending in Canada reached approximately $160 billion in 2025, with domestic travel accounting for the lion’s share—nearly $104 billion, or about 65% of the total. This marked a compound annual growth rate of around 5.4% from 2024, highlighting the sector’s role as a significant economic driver, contributing roughly 2% to national GDP. Statistics Canada reported quarterly gains in tourism GDP, with a 0.9% increase in the third quarter of 2025, matching the second quarter’s pace. Overall, tourism GDP accounted for 1.70% of Canada’s total in Q3 2025.

Domestic tourism surged, particularly during the summer months from May to August, when the sector raked in $59 billion—$44.4 billion from Canadian travelers alone. This represented unprecedented dispersion across the country, with provinces like British Columbia and Alberta benefiting from nature-based escapes, while Ontario and Quebec saw boosts from urban and cultural attractions. Statistics Canada noted that domestic travel has doubled year-over-year in some metrics, driven by patriotism and affordability amid high international costs.

International arrivals presented a mixed picture. Overseas visitors increased, with 886,000 arriving in August 2025—a 9.2% rise from the previous year. However, cross-border travel from the United States, Canada’s largest source market, declined sharply. In October 2025, Canadian residents returned from 2.3 million U.S. trips, down 26.3% from October 2024. Similarly, September saw a 30.9% drop in such trips, and November U.S. air arrivals to Canada fell 12.6%. These declines were attributed to economic pressures, including a strong Canadian dollar and rising fuel costs, which made U.S. travel less appealing for Canadians.

Spending patterns reflected these trends. Tourism spending grew 0.7% in Q2 2025 and 1.8% in Q1, but dipped 0.3% in Q3 2024 (pre-2025 baseline). Passenger air transport was a bright spot, up 2.8% in Q4 2024, setting the stage for 2025 gains. The sector also supported employment, with tourism-related jobs recovering to near pre-pandemic levels, particularly in hospitality and transportation.

Regionally, British Columbia led with strong adventure and wellness tourism, while the Atlantic provinces benefited from cruise recoveries. However, border-dependent areas like Ontario’s Niagara region felt the U.S. travel slump.

Challenges in 2025: Economic and Environmental Pressures

Despite gains, 2025 was not without hurdles. The sector grappled with inflation, which increased operational costs for hotels and attractions, leading to higher prices for consumers. Statistics Canada highlighted seasonal employment reliance in travel arrangement services, underscoring vulnerabilities in part-time work.

Environmental factors, such as wildfires in Western Canada and extreme weather events, disrupted peak seasons. Additionally, global geopolitical tensions affected long-haul markets, though overseas arrivals held steady. Destination Canada noted that while domestic travel surged, international recovery lagged at 85-90% of 2019 levels in some segments.

Looking Ahead to 2026: Forecasts and Strategies

Destination Canada’s Tourism Outlook model projects continued growth in 2026, with a 5.4% increase in tourism spending, potentially reaching $170 billion or more. Domestic visitor spending is forecast at $104 billion in 2025, with further gains expected in 2026 as Canadians prioritize local experiences. International arrivals from the U.S. are anticipated to hit 16 million by 2026, up 5.4% from 2025 projections.

Key strategies for 2026 include:

• Event-Led Growth: Major draws like the FIFA World Cup (co-hosted with the U.S. and Mexico) will spotlight Toronto and Vancouver, boosting infrastructure and marketing. Additional events, such as music festivals and cultural celebrations, aim to distribute visitors beyond urban centers.
• Sustainability Focus: Destination Canada emphasizes “purpose over places,” with trends like wellness, nature, and personal enrichment dominating. Initiatives include carbon-neutral tours and Indigenous-led experiences to attract eco-conscious travelers.
• Digital and Marketing Push: Enhanced data platforms like the Canadian Tourism Data Collective will inform targeted campaigns, focusing on dispersion to rural areas.
• Air and Border Enhancements: Efforts to expand airlift and streamline borders could reverse U.S. declines, with forecasts showing occupancy stabilizing at 66% through 2027.

Experts warn of risks, including overtourism in hotspots like Banff and potential economic slowdowns. However, with domestic patriotism sustaining demand, 2026 could set new records.

Conclusion: A Sector Poised for Momentum

Canada’s tourism in 2025 solidified its recovery, with domestic strength offsetting international soft spots. As 2026 approaches, strategic investments in sustainability and events position the industry for robust growth, potentially exceeding $170 billion in revenue. For stakeholders, the focus remains on balanced, inclusive development to ensure long-term viability.

For the latest data, consult Statistics Canada or Destination Canada. As global travel evolves, Canada’s diverse offerings—from Rocky Mountains to urban vibes—continue to captivate.