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International travel account

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The Daily

Thursday, February 28, 2008
Annual 2007 and fourth quarter 2007 (preliminary)

Canada's international travel deficit surpassed the $10-billion mark in 2007, in the wake of substantial gains in travel spending by Canadians abroad.

The deficit (the difference between spending by Canadians abroad and spending by foreigners in Canada) hit a record high of $10.3 billion in 2007, up from the previous record high of $6.7 billion in 2006. In contrast, the deficit was as low as $1.7 billion in 2002.

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Higher travel spending abroad fuelled the burgeoning deficit. Canadians spent a record $26.9 billion outside the country in 2007, a 15.5% increase from 2006.

At the same time, foreign spending in Canada edged up 0.3% to $16.6 billion. Lower spending by United States residents in Canada offset most of the increase in spending by travellers from overseas countries.

Travel deficit with the United States hits a new high

Canada's travel deficit with the United States climbed to $7.1 billion in 2007, about $2.8 billion higher than in 2006. In the process, it broke the previous high set in 1991 by more than $1.1 billion.

Note to readers

This international travel account analysis is based on preliminary quarterly data, seasonally adjusted unless otherwise stated. Amounts are in Canadian dollars and are not adjusted for inflation.

Receipts represent spending by foreigners travelling in Canada, including education spending and medical spending. Payments represent spending by Canadian residents travelling abroad, including education spending and medical spending.

Overseas countries are those other than the United States.

The record deficits of 1991 and 2007 have many similarities, as both were fuelled by high travel spending by Canadians in the United States. In both cases, economic factors contributed to these changes in spending patterns.

In 1991, the arrival of the Goods and Services Tax and a then-peaking Canadian dollar were the likely catalysts for a surge in cross-border shopping in the United States, which generated record spending at that time. In 2007, a Canadian dollar inching towards parity likely contributed to the increase in travel spending, both on same-day and overnight trips. The loonie reached parity with its US counterpart on September 20, 2007.

Travel spending in the United States climbed to $15.4 billion in 2007, a surge of 19.1% from 2006. Automobile purchases in the United States contributed significantly to the increase, as the number of units imported by Canadian travellers nearly doubled in 2007.

Canadians made 24.2 million same-day car trips in 2007, a 3.3% increase from 2006. However, overnight travel south of the border jumped 10.9% to 17.7 million trips, the highest in 15 years. Both hit record highs in 1991.

The exchange rate may also have hampered spending by US residents in Canada. They spent $8.3 billion in Canada in 2007, a 4.3% decrease from 2006 and the lowest level since 1997.

The drop in spending was fuelled by an 18.8% decline in same-day car travel north of the border, which fell to a low of 11.2 million trips in 2007. Overnight travel from the United States fell 3.2% to 13.4 million trips, the lowest level in a decade.

Record travel by Canadians causes ballooning deficit with overseas countries

Canada's travel deficit with overseas countries reached a high of $3.2 billion in 2007, an estimated $711 million increase from 2006. The rise in the deficit was attributable to higher spending brought on by record travel to non-US destinations.

Canadian residents spent $11.5 billion in overseas countries in 2007, a 10.9% jump from 2006. This was in line with a 9.9% increase in travel overseas, which climbed to a high of 7.4 million trips.

This was partially offset by an increase in travel spending by residents of overseas countries in Canada. They spent $8.3 billion in Canada in 2007, a 5.3% increase from 2006. Overnight travel from overseas countries hit a record of 4.6 million trips in 2007, a 3.4% increase from 2006.

Fourth quarter: Travel deficit highest ever

On a quarterly basis, the international travel deficit climbed to $3.6 billion in the fourth quarter of 2007, a $785-million increase from the previous high observed in the third quarter.

The rising deficit was the result of increased spending abroad, which jumped 11.7% to $7.7 billion in the fourth quarter. At the same time, foreign spending in Canada edged up 0.6% to $4.2 billion.

Most of the increase in the travel deficit was attributable to a $730-million jump in the deficit with the United States, which expanded to $2.7 billion in the fourth quarter.

The deficit with the United States widened due to a combination of increased spending by Canadians south of the border and lower spending by US residents in Canada.

Canadians spent $4.7 billion in the United States, up 16.7% from the third quarter, as both same-day car and overnight travel posted significant gains in the fourth quarter of 2007.

Canadians made 6.6 million same-day car trips to the United States in the fourth quarter, a 9.1% increase from the previous three-month period and the highest level since the first quarter of 2001. Overnight travel jumped 10.0% to 4.9 million trips, the highest since the end of 1991.

The Canadian dollar reaching parity at the end of the third quarter likely contributed to the influx of travellers to the United States. It also likely contributed to a jump in cross-border shopping and automobile purchases in the United States in the fourth quarter.

Spending from United States residents in Canada, on the other hand, slipped 2.7% to $2.0 billion. The decline was the result of an 11.9% drop in same-day car travel, which fell to 2.5 million trips, the lowest since record keeping started in 1972.

Overnight travel by United States residents in Canada edged up 1.6% to 3.4 million trips.

The travel deficit with overseas countries widened to $904 million in the fourth quarter of 2007, as the increase in spending by Canadians overseas outpaced the increase in spending by travellers from overseas countries in Canada.

Fourth-quarter spending overseas reached $3.0 billion, up 4.7% from the previous quarter, as Canadians continued to travel to non-US destinations at a record pace.

Canadians made almost 2.0 million trips overseas in the fourth quarter, a 6.5% increase from the third quarter. Travel to overseas countries has nearly doubled in the last decade.

Travel from overseas also reached record levels, as tourists from countries other than the United States made 1.2 million overnight trips in the fourth quarter, up 2.8% from the previous quarter.

As a result, spending in Canada by travellers from overseas countries climbed to $2.1 billion in the fourth quarter of 2007, a 3.9% increase from the third quarter.

Definitions, data sources and methods: survey numbers, including related surveys, 3152 and 5005.

The international travel account for the first quarter of 2008 will be released on May 28.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Eric Desjardins (613-951-1781; or Client Services (toll-free 1-800-307-3382; 613-951-9169; fax: 613-951-2909;, Culture, Tourism and the Centre for Education Statistics.

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