TORONTO — With Canada-U.S. tensions escalating amid an ongoing trade war, Canadian travel advisors are bracing for an economic fallout, with no word yet from the federal government about any financial support.

During its virtual Advocacy Townhall yesterday, March 11, ACTA’s Wendy Paradis, President, and Avery Campbell, Director, Advocacy and Industry Relations, did not mince any words when discussing the United States’ recently imposed tariffs on Canada, calling it a “significant and serious situation.” Noting how Canada exports 76% of all its goods to the United States, and that the U.S. represents the number one destination for Canadian travellers, Campbell says that if tariffs are implemented and sustained, there would be long-term and irreversible impacts to Canada’s economy and, ultimately, the travel industry.

“In the long-term, we would expect a significant increase in Canadians changing their travel intentions away from the United States, with more Canadians likely to participate in the current boycott discussion,” says Campbell. “Also, everyone in our country is going to be economically impacted by the situation. What this may create is a situation where Canadians have less disposable income to spend on travel and businesses may be tightening their belts and reconsider business travel. So, there would be an expectation that all travel will decline should the situation continue or progress.”

To help support Canadian businesses and workers through this time, the Government of Canada announced a $6.5 billion aid package last week called the Trade Impact Program. However, as Campbell notes, aid will primarily be earmarked for “manufacturers, agriculture and exporters.” Whether any future aid will be allocated to the travel industry and travel advisors remains to be seen, at least not until the House of Commons resumes sitting after a general election is held.

“At this time, we do not believe there are any support programs available specific to our sector,” says Campbell. “We’re going to be entering an election very soon, and once the dust settles and the House sits again, then the Government of Canada will be able to enact new supports. But at this time, we don’t know who the government is going to be.”

ECONOMIC IMPACT: IT’S NOT LIKE THE PANDEMIC

On Feb. 1, 2025, U.S. President Trump declared an executive order effective Feb. 4 that imposed a 25% tariff on all Canadian goods exported to the U.S., with energy products taxed at a lower rate of 10%. This was later delayed to March 4, with further measures including a 25% tariff on Canadian aluminum and steel. Adding to the uncertainty, the White House indicated that tariffs will be cumulative, meaning that the original 25% tariff will apply on top of any retaliatory tariffs set to take effect on April 2. On March 11, the President doubled the tariff on Canadian aluminum and steel, to 50%, effective immediately.

Citing Mark Miller, Canada’s Federal Minister of Immigration/Citizenship, Campbell notes that at President Trump’s proposed 25% flat tariff rate, if sustained, Canada can expect to see one million job losses, representing 4% of the workforce. Campbell also cites analysis done by the Bank of Canada on Feb. 21, which found that under a 25% tariff regime, Canada’s GDP would see a sustained loss of 3%.

“This is quite a different economic situation from the COVID-19 pandemic, when Canada saw a 1.3% loss,” says Campbell. “But there was a bounce back after COVID closures, folks were travelling again and spending money. The impact of these tariffs in the trade war will create a long-term and systemic decoupling of the Canadian economy with the U.S. economy. And this decoupling, if the tariffs are sustained, is expected to have no bounce back and there would be a long-term loss in our gross domestic product output.”

IMPACT ON TRAVEL & OTHER CONCERNS

The U.S.-imposed tariffs are already impacting Canadian travel, with Statistics Canada reporting a 14.5% reduction in total travellers coming from Canada to the United States, by land and air, in February. Also in February, Leger released a report that found 48% of Canadians intend to avoid travel to the United States, while Ipsos reported that this number went up to 65% later in the month. Meanwhile, the latest data from GPS Market states that 73% of Canadians intend to avoid U.S. travel.

Exacerbating the situation are three other executive orders signed by President Trump on Jan. 20, 2025, that will have massive impact on travel. The first is an executive order that will recommend a list of countries from where travellers will be prohibited to enter the United States, similar to the so-called “Muslim ban” enforced by the first Trump administration. This report is due March 21.

Second, President Trump signed an executive director for a recommendation within 90 days on whether to invoke the Insurrection Act, which essentially gives policing powers to the military, thereby invoking martial law. If enacted, “we would expect significant declines in interest for travellers entering the United States,” says Campbell. The 90-day reporting period ends on April 20.

Third, President Trump issued an order stating that the United States would only recognize the male and female sexes, which has significant implications for transgender and gender non-binary travellers. “At this time, and in conference with the Government of Canada, it is our understanding that Canadians with an ‘X’ marker or a gender marker that differs from their gender at birth are still recognized to enter into the United States. However, the President has issued a 120-day reporting timeline for a re-evaluation of this particular executive order. That day will be May 20, when the President will be considering potential further actions on this gender executive order,” says Campbell.

HOW IS ACTA HELPING & HOW CAN MEMBERS HELP

According to Campbell, ACTA has been engaged in every aspect of the ongoing situation with the United States. The organization is meeting weekly with the Department of Finance and Global Affairs Canada and has held meetings with the Canadian Embassy in Washington, D.C. to keep the interests of its members front and center among decision-makers. ACTA is also working collaboratively with its American counterparts like ASTA and USTA and its global counterparts at WTAAA, and continues to engage with key industry stakeholders and suppliers, including the Canadian Travel and Tourism Roundtable.

ACTA President Wendy Paradis also notes that the organization is working closely with its TALA (Travel Agency Leaders) and Independent Travel Advisor Advisory Committee to address the needs of independent travel advisors over the coming weeks and months, and is collaborating with its American counterparts like ASTA and USTA.

“I think very important in this current unfolding crisis will be our continued partnership with our American partners. It’s one thing for Canada to advocate but we also think it’s very important for Americans to advocate. The number one destination that Canadians go to outside of Canada is the United States. And in talking to our colleagues in the U.S. last week, we know that the number one destination that Americans go to is Mexico, followed by Canada. So, the travel industry on both sides of the border is very motivated to work to minimize the impact of this current financial and economic issue,” says Paradis.

Both Campbell and Paradis stress the importance of data in determining next steps. ACTA members are encouraged to email Campbell at acampbell@acta.ca with information on U.S. sales and bookings.

“How do your forward U.S. sales look like? If clients are cancelling U.S. sales, are they booking alternative destinations? Are you seeing a total reduction in travel? Any information that you can share would help shed light for us to understand what’s happening to our members and will help us advocate for financial supports that may help you,” says Campbell.

All members are also encouraged to check out ACTA’s new Canada-U.S. relations portal on its website, www.acta.ca, newly launched on March 11. On the microsite, members will find consolidated information about the ongoing trade war as well as a letter template that they can use to write to U.S. senators in states that they frequently book travel, with the aim of applying pressure on the White House to stop U.S.-imposed tariffs. “The tool is very easy to use. It writes the letter for you and takes just two to three minutes,” says Campbell.

To access the microsite, go to https://www.acta.ca/canada-us-relations.php.