Tuesday, November 28, 2006

International travel account

Increased spending by Canadians abroad pushed Canada's international travel deficit to its highest level ever in the third quarter, edging out the previous high observed nearly 15 years ago.

The deficit (the difference between spending by Canadian residents abroad and spending by foreigners in the country) climbed to a record $1.9 billion between July and September. This was up $278 million from the second quarter and slightly above the previous high set in the fourth quarter of 1991. At that time, the ballooning deficit with the United States had been the main reason for the record deficit. Now, widening deficits with both the United States and overseas countries are contributing factors.

Record spending abroad contributed to the unmatched deficit, as Canadians spent an estimated $5.9 billion outside the country, up 2.9% from the previous quarter. Spending abroad has shown an upward trend in recent years, with increases in 11 of the last 13 quarters.

Moreover, foreign travel spending in Canada has fallen in six of the last seven quarters, also fuelling the widening deficit. During the third quarter of 2006, foreigners spent $4.0 billion in Canada, down 2.6% from the previous quarter.

Deficit with the United States highest in nearly 13 years

Canada's travel deficit with the United States climbed to $1.1 billion during the third quarter of 2006, a $225 million increase from the second quarter and the highest level since the fourth quarter of 1993.

The jump in the deficit was the result of higher spending by Canadians in the United States and lower spending by Americans in Canada.

Canadians spent an estimated $3.3 billion in the United States in the third quarter, more than any other previous quarter. The 2.6% increase in spending was in line with a similar increase in overnight travel to the United States, which climbed to 4.0 million trips, its highest level since the end of 1993.

Note to readers The present 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.

Spending in Canada by American travellers fell to $2.1 billion during the third quarter, a 6.2% drop and the lowest level since the first quarter of 1998. Overnight travel from the United States fell 3.6% to 3.4 million trips during that same period.

The Canadian dollar remained unchanged compared to its American counterpart, averaging $0.89 US during the third quarter of 2006.

Record spending in Canada not enough to halt widening deficit with overseas countries

Spending in Canada by travellers from overseas countries climbed to unprecedented levels in the third quarter of 2006, reaching $1.9 billion. Yet, Canada's travel deficit with overseas countries climbed to an all-time high of $753 million, up $53 million from the previous quarter.

The 1.7% increase in spending in Canada occurred despite a 1.0% drop in overnight travel from overseas countries. Travellers from overseas countries made almost 1.1 million trips to Canada during the third quarter, the lowest level in over a year.

Record travel from Canada to overseas destinations contributed to the higher deficit, as Canadians took 1.7 million trips to non-US destinations, up 0.5% from the previous quarter. As a result, Canadians spent a record of $2.7 billion, an increase of 3.3% from the previous high set in the second quarter.

During the third quarter of 2006, the value of the Canadian dollar gained against the Japanese yen but fell against the British pound sterling and the euro.

International travel account receipts and payments
	Third quarter 2005	Second quarter 2006r	Third quarter 2006p	Second quarter to third quarter 2006
	Seasonally adjusted1
	$ millions			% change
United States
Receipts	2,188	2,267	2,126	-6.2
Payments	3,061	3,177	3,260	2.6
Balance	-873	-910	-1,134
All other countries
Receipts	1,912	1,889	1,921	1.7
Payments	2,459	2,589	2,675	3.3
Balance	-547	-700	-753
Total
Receipts	4,100	4,156	4,047	-2.6
Payments	5,520	5,766	5,935	2.9
Balance	-1,419	-1,610	-1,888
r revised p preliminary 1. Data may not add to totals due to rounding.

The international travel account for 2006 and the fourth quarter of 2006 will be released on February 26, 2007.

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

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

---

Send this article to another person
E-mail to:
Your name:
Your e-mail:
Comments: