Tourism outpaces Canada’s economy in Q3 as int’l demand rebounds: StatCan

Canada’s tourism sector continued to punch above its weight in the third quarter of 2025, delivering steady growth at a time when the broader economy showed modest momentum, according to Statistics Canada.

Sharing its latest data on January 6, the agency reports that tourism’s GDP rose 0.9 per cent in Q3—matching its performance in the second quarter and outpacing economy-wide GDP growth of 0.5 per cent

Tourism’s share of nominal GDP held firm at 1.70 per cent, underscoring its resilience amid ongoing trade and travel headwinds.

The takeaway? Tourism remains one of Canada’s most immediately responsive services exports, adjusting quickly to shifts in cross-border conditions, transportation capacity, and consumer sentiment.

Growth in tourism GDP during the quarter was led by accommodation and transportation, both up 1.2 per cent.

Food and beverage services (+0.5 per cent) and other tourism industries (+0.4 per cent) also contributed, while non-tourism industries linked to tourism demand advanced 0.8 per cent, StatCan reports.

Tourism spending rises, int’l demand rebounds

Total tourism spending increased 0.7 per cent in Q3, a slight deceleration from the 0.9 per cent rise in the previous quarter, reports StatCan

Both domestic (+0.5 per cent) and international (+1.2 per cent) spending supported the expansion, reinforcing tourism’s dual role as an internal demand driver and an export-oriented industry.

Accommodation services were the single-largest contributor to growth (+1.4 per cent), while passenger air transport declined 1.0 per cent, reflecting ongoing capacity constraints and lingering cross-border friction.

International visitors return—selectively

Tourism spending by international visitors rebounded 1.2 per cent in Q3.

Gains were broad-based across most tourism products, led by vehicle rental (+5.1 per cent), vehicle repair (+2.6 per cent), and travel services (+2.6 per cent).

Accommodation spending recovered modestly (+1.0 per cent) after a steep decline in the prior quarter.

International visitors accounted for 22.3 per cent of total tourism spending, essentially unchanged from Q2 but still below recent historical norms, reports StatCan.

Continued Canada–U.S. trade tensions earlier in the year reduced American travel into Canada and reshaped cross-border tourism flows, with Canadians opting to travel domestically and redirect spending at home rather than abroad, the agency says.

Tourism spending by Canadians

Tourism spending by Canadian residents rose 0.5 per cent in Q3, slowing sharply from 2.9 per cent growth in the second quarter, says StatCan.

Gains were concentrated in accommodation services (+1.6 per cent), pre-trip expenditures (+4.4 per cent), and vehicle rental (+11.3 per cent).

The Canada Strong Pass, in effect from late June through early September, likely underpinned a 3.9 per cent increase in passenger rail spending, StatCan suggests.

Offsetting these gains, passenger air transport spending fell 1.6 per cent, reflecting both ongoing Canada–U.S. trade uncertainty and flight cancellations tied to Air Canada’s flight attendants’ strike in August.

According to the Canadian Survey of Consumer Expectations for the third quarter, 33.6 per cent of Canadians planned on spending more while vacationing in Canada, and 53.1 per cent planned on spending less while vacationing in the U.S.

Looking ahead: mixed signals 

Early indicators point to a more uneven outlook. Frontier Counts data show declines in the number of Canadians returning by land and air in both October and November 2025 compared with a year earlier.

Inbound travel showed a brief lift in October, driven by air arrivals, before weakening again in November across both air and land modes.

While tourism remains resilient, its growth is increasingly sensitive to cross-border conditions, transportation capacity, and trade-related uncertainty.

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.