2006 Year in Review: Deficit Almost Double in Last Ten Years
Balance of Payments – Travel Deficit Ballooning
- Canada’s tourism deficit has increased by $1.3 billion in 2006 to $6.7 billion (see Chart 1), up 24.7% over 2005, and almost double the deficit reached in 1996.
- Receipts from foreign travellers in Canada, registered $16.6 billion, a slight decline of -0.5 from the previous year (see Table 1). The increased payments of $23.3 billion made by Canadians abroad (up 5.7%) has resulted in a widening deficit with both the US and overseas countries.
- The sharp increase in Canada’s travel deficit was mainly driven by the US, with its deficit increasing to $4.3 billion in 2006, eight times the deficit reached in 2002 when it reached a low level of $544 million.
- The deficit with overseas countries also contributed to the bleak picture climbing to a new high of $2.5 billion - an estimated $294 million increase over the previous year.
Receipts - American Spending in Canada Declines
- Receipts from US travellers to Canada fell 3.3% to $8.7 billion - its lowest level since 1998. A 3.9% decrease in overnight trips to Canada contributed to the drop, as only 13.8 million Americans took overnight trips to Canada in 2006. The Canadian dollar averaged US 88.2 cents in 2006, up 6.9% against its American counterpart, its highest level since 1977.
- On the other hand, travellers from overseas countries spent $7.9 billion in Canada in 2006, a 2.8% gain over 2005. They made 4.4 million overnight trips to Canada for a modest 0.7% increase from the previous year.
Payments - Canadians Spend Record Level Abroad
- The surging deficit is primarily attributable to Canadians spending a record $23.3 billion outside the country in 2006, up 5.7% compared to 2005. Canadian spending in the US climbed to $12.9 billion in 2006, a 6.1% gain and was mainly driven by a 7.6% increase in overnight travel, registering 16.0 million trips.
- Overseas spending by Canadians has almost doubled since 1996, climbing to $10.4 billion in 2006. An increase in the number of trips contributed to this record-setting spending, as 8.0% more Canadians travelled to overseas destinations than in 2005.
Table 1: International Travel Account
Balance of Payments
(Not seasonally adjusted, Revised Figures, $ millions) |
| |
2005 |
2006 |
Percent
Change |
| United States |
| Receipts from Americans travelling in Canada |
8,978 |
8,685 |
-3.3% |
| Payments by Canadians travelling in US |
12,195 |
12,935 |
6.1% |
| Balance |
-3,216 |
-4,250 |
32.2% |
| All Other Countries |
| Receipts from Overseas visitors travelling in Canada |
7,696 |
7,913 |
2.8% |
| Payments by Canadians travelling Overseas |
9,864 |
10,376 |
5.2% |
| Balance |
-2,169 |
-2,463 |
13.6% |
| Total |
| Total Receipts from all visitors travelling in Canada |
16,674 |
16,598 |
-0.5% |
| Total Payments by Canadians travelling outside of Canada |
22,059 |
23,311 |
5.7% |
| Balance (travel deficit) |
-5,385 |
-6,713 |
24.7% |
Note to readers
The International Travel Account (ITA) measures the difference between what Canadians spend abroad and what foreigners spend in Canada. 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. The ITA does not include airfares.
The Balance of Payments revise their data annually in May during the release of quarter 1 preliminary data. This analysis is based on revised data for the years 2005 and 2006 and is not seasonally adjusted. Amounts are in Canadian dollars and are not adjusted for inflation.
The next International Travel Account for the first quarter of 2007 will be available on the CTC web site in June 2007. For more information, please contact Murielle Ballantyne at ballantyne.murielle@ctc-cct.ca.
