International travel account

Spending by Canadians in both the United States and overseas nations hit record highs during the first three months of 2005, pushing the international travel deficit to its highest level in more than a year.

The deficit (the difference between spending by Canadian residents abroad and spending by foreigners in the country) widened to an estimated $1.2 billion in the first quarter of 2005, the biggest since the end of 2003.

The increase in the deficit, about $311 million from the previous quarter, was the largest in nearly three years and the fifth largest on record.

In total, Canadian residents spent a record high $5.5 billion abroad, up 5.4% from the fourth quarter of 2004. It was the sixth increase in the last seven quarters. This spending consisted of $3.0 billion in the United States and $2.5 billion in overseas nations, both record highs.

In the other direction, spending by foreigners in Canada slipped to $4.3 billion, a 0.6% decline from the all-time high set in the previous quarter.

Travel deficit with US highest in over seven years

Canada's travel deficit with the United States hit a seven-year high of $583 million in the first quarter of 2005, as spending south of the border reached record levels.

The $3.0 billion Canadian residents spent in the United States was a 4.9% increase from the last three months of 2004. The increase was the largest in nearly three years.

In contrast, spending by Americans in Canada fell for the first time in nearly two years, a 3.4% decline to $2.5 billion. Prior to this quarter, spending by Americans in Canada had been increasing constantly since the second quarter of 2003, the peak of the SARS crisis.

Canadians took more than 3.7 million overnight trips to the United States in the first quarter, up 3.3% from the previous quarter and the highest level in seven and a half years.

American visitors took 3.7 million overnight trips in the first quarter, down 0.7%, which likely contributed to their drop in spending.

The value of the Canadian dollar against its American counterpart slipped 0.5% to US 81 cents between the fourth quarter of 2004 and the first quarter of 2005.

Deficit with overseas countries up despite record spending in Canada

The travel deficit with overseas countries widened to $615 million in the first quarter of 2005, as spending by Canadians in overseas destinations and spending by overseas residents in Canada both hit record highs. The increase in the deficit was the first in over a year.

The $2.5 billion Canadians spent in overseas countries was a 6.1% increase from the fourth quarter last year, and 5.5% higher than the previous high set in the second quarter of 2004.

Spending by overseas residents in Canada topped the $1.8-billion mark for the first time. The 3.3% gain was the seventh consecutive quarterly increase.

The rise in Canadian spending overseas was fuelled by a 4.7% jump in overnight travel. Canadians took 1.5 million overnight trips to overseas countries in the first quarter, more than in any other three-month period.

Overnight travel to Canada by overseas residents increased to 1.1 million trips in the first quarter, up 0.1% from the previous quarter and the seventh consecutive increase. This was also the highest level since the second quarter of 2001, prior to the events of September 11.

During the first quarter of 2005, the value of the Canadian dollar fell compared to major overseas currencies, including the Australian dollar, the British pound, the Mexican peso, the Japanese yen and the euro.

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

The international travel account for the second quarter of 2005 will be released on August 29.

For more information, or to enquire about the concepts, methods and data quality of this release, contact Eric Desjardins (613-951-1781; eric.desjardins@statcan.gc.ca) or Client services (1-800-307-3382; 613-951-7608; fax: 613-951-2909; cult.tourstats@statcan.gc.ca), Culture, Tourism and the Centre for Education Statistics.