Canada's International Travel Account

Second quarter 2007 (preliminary)

Key Highlights

Balance of Payments: Canada sets another record

• Canada’s travel deficit: climbed to $2.0 billion during the second quarter of 2007 (see Table 1), an increase of 15.1% from the same quarter in 2006. This constitutes Canada’s highest second quarter deficit on record.
• The travel deficit with US: reached $1.3 billion dollars during the second quarter, a decline of an additional $133 million from the same quarter in 2006. The decrease in spending by Americans in Canada combined with Canadians’ record spending in the US created the highest second quarter travel deficit since the early nineties.

• While the deficit with the US contributed the most to Canada’s travel deficit in the second quarter of 2007 (67.6%), its share size dropped 2.4% from the same quarter in 2006 (see Chart 1).

Chart 1: Canada’s Travel Deficit with US and Other Countries¹

Receipts (spending by non-residents while traveling in Canada

• Total receipts from all visitors travelling to Canada reached $4.2 billion in the second quarter of 2007, a decrease of -0.3% over 2006 (see Table 1).
• The 4.4% increase in overseas receipts was not enough to offset the decline (-4.2%) in receipts from Americans travelling to Canada.
• Overseas travelers’ spending in Canada totaled $2.0 billion in the second quarter, an increase of 4.4%, while the number of overseas visits to Canada increased 2.3%.
• In the second quarter of 2007, the Canadian dollar averaged $0.91US, up 6.7% from the previous quarter and the highest level in 30 years. The Canadian dollar also gained against other major international currencies such as the Japanese yen, the Euro and the UK pound sterling.

Payments (spending by Canadians while traveling outside of Canada)

• An 8.5% increase in spending by Canadians outside of Canada has contributed to the growing deficit.  Canadian spending south of the border rose 1.0% to $3.5 billion compared to the same quarter in 2006, a result of the increase in Canadian overnight travel to the United States (+ 5.1%), for a total of 4.1 million trips.
• Canadians spending overseas totaled $2.7 billion in the second quarter, up 8.5% from the same quarter in 2006.  A jump in the number of trips overseas contributed to this spending, as 8.4% more Canadians traveled to overseas destinations.  Remarkably, overseas spending by Canadians has increased in every quarter since the second quarter in 2003, when it declined -8.0% during the SARS crisis.

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 once a year for the previous four years’ data, and every quarter for the current year’s data.  This analysis is based on preliminary quarterly data that is not seasonally adjusted.  Amounts are in Canadian dollars and are not adjusted for inflation.

The next International Travel Account for the third quarter of 2007 will be available in December 2007.  For more information, please contact Murielle Ballantyne at ballantyne.murielle@ctc-cct.ca.