As political and economic uncertainty continues to shape the Canada-U.S. relationship, the Tourism Industry Association of Ontario (TIAO) remains steadfast in advocating for Ontario’s tourism sector. With the U.S. market accounting for 22% of tourism spending in the province, cross-border travel and trade remain essential to the industry’s health.
Shifts in immigration policies, tariffs, and trade agreements will significantly impact travel patterns, consumer behavior, and operator costs. Ensuring the sector is prepared to navigate these changes is critical. TIAO extends its gratitude to the more than 200 businesses from across Ontario who participated in our U.S. Market & Tariff Survey, providing valuable insights into the evolving landscape of U.S. visitation and trade.
Key Findings & Concerns
1. U.S. Inbound Market. While some regions have experienced a resurgence of U.S. visitors over the past year, others continue to struggle.
-
Many businesses report that U.S. visitation remains below 2019 levels, with some experiencing a 50% decline.
-
41% of respondents have seen fluctuations in U.S. visitor numbers over the past season, particularly in accommodation and outfitter sectors.
-
Niagara Region reports a strong rebound, with U.S. visitors contributing 41% of total spending in 2024.
-
Northwestern Ontario Region, where U.S. travelers historically account for 80% of tourism receipts, remains below pre-pandemic levels.
2. Exchange Rates – A Double-Edged Opportunity. The strong U.S. dollar presents an opportunity to attract more American visitors, but inconsistent marketing efforts are limiting Ontario’s ability to capitalize on this advantage.
-
Some regions have seen a rise in U.S. visitors due to favorable exchange rates, while others remain below expected levels.
3. U.S. Goods and Services Sourcing. Rising Costs Threaten Business Stability. Many Ontario tourism businesses rely on U.S. suppliers for critical goods and services, making them vulnerable to cost inflation and tariff risks.
-
30% of businesses spend between $10,000 and over $1 million annually on U.S. goods and services.
-
50% of businesses report spending between $10,000 and $100,000 annually on U.S. imports.
-
The threat of new tariffs could further strain operational budgets, increasing prices for visitors and limiting business sustainability.
4. Uncertainty – A Barrier to Growth and Optimism. Political and economic volatility, border concerns, and rising operational costs contribute to industry uncertainty.
-
Misinformation about border crossing requirements continues to deter U.S. visitors.
-
Businesses express concerns about tariffs, trade disputes, and fluctuating Canada-U.S. relations.
-
Lack of targeted marketing in key U.S. border states is limiting Ontario’s competitive advantage.
TIAO’s Calls to Action
Ontario’s tourism industry requires proactive policy solutions to mitigate risks and seize opportunities. TIAO’s provincial pre-budget submission includes a number of recommendations that will not only help respond to current challenges but will strengthen the industry for the long-term. These include:
-
Invest $15 million in provincial tourism marketing to attract domestic, U.S., and international visitors.
-
Create a $20 million fund to secure national and international sport and business events.
-
Expand the Experience Ontario Fund by $10 million to enhance festivals and events that will draw more visitors.
-
Close Municipal Accommodation Tax loopholes to strengthen destination marketing and municipal revenue.
-
Address federal immigration shifts by developing new pathways to attract tourism students and workers.
-
Improve transportation connectivity by expanding air, rail, motor coach, and public transit options.
"The Ontario tourism industry is at a critical juncture," said Andrew Siegwart, President and CEO of TIAO. "We must take decisive action to protect our operators, foster economic growth, and ensure Ontario remains a premier destination for domestic, U.S., and overseas travelers. Our advocacy will remain strong, and we urge government leaders to act swiftly to support our sector in the short- and long-term."