Exclusive: U.S. businesses are getting throttled by the drop in tourism from Canada: ‘I can count the number of Canadian visitors on one hand’

A Joint Economic Committee analysis shared with Fortune finds cross-border travel from Canada to the U.S. plunged about 20% year-to-date (Jan–Oct 2025) versus 2024 and as much as 27% in some northern states, a decline local tourism officials attribute to President Trump’s tariffs and provocative trade posture as well as a weaker Canadian dollar and higher prices. The drop is translating into measurable revenue losses across border communities—fewer hotel stays, weaker retail and restaurant sales, and reduced demand for wineries, festivals and attractions (Canadians historically account for roughly 15–25% of visitors in some towns and about 10% of sales at certain businesses). If sustained, the shift risks longer-term market-share and employment losses for businesses reliant on Canadian tourists and represents a tangible downside to regional economic activity until travel patterns or policy tensions ease.

Analysis

A Joint Economic Committee analysis, using U.S. Customs and Border Protection travel statistics, reports passenger-vehicle crossings from Canada to the U.S. fell nearly 20% year-to-date (Jan–Oct 2025) versus the same period in 2024, with declines as large as 27% in some northern-border states. Local tourism officials and business owners report measurable revenue impacts: Canadians historically represent roughly 15–25% of visitors in towns near the border and about 10% of receipts for some wineries, translating into higher hotel vacancies, weaker retail and restaurant sales, and reduced festival attendance.

The JEC and quoted stakeholders attribute the decline to a combination of President Trump’s tariffs, aggressive trade rhetoric (including proposed annexation and paused talks), a weaker Canadian dollar, and higher prices that have shifted Canadians toward domestic or alternative travel destinations. Businesses warn of habit formation and long-lasting demand loss, with local operators noting it may be difficult to recapture customers who form new travel traditions elsewhere.

For investors, the near-term market signal is moderately negative for border-dependent travel & leisure and small regional retail; the provided market impact score is 0.35 and sentiment is moderately negative. Key risks to monitor are the duration of policy-driven travel chill, currency trends, regional occupancy/RevPAR data, and whether Canadian visitation rebounds or remains structurally diminished.

Key Decisions for Investors

• Reduce or avoid concentrated exposure to small-cap hospitality, retail and leisure businesses with a high revenue share tied to Canadian visitors until passenger-vehicle crossings and hotel occupancy show sustained recovery
• Monitor leading indicators — U.S. CBP border-crossing statistics, regional RevPAR/occupancy, Canadian dollar movements, and tariff/trade-policy announcements — as explicit triggers for re-entry or position adjustment
• Prefer diversified or national travel and leisure operators with broader demand pools over locally dependent assets where Canadians account for 10–25% of sales, and consider hedges against regional consumer-revenue downside
• Defer capital-intensive investments (expansions, acquisitions) in northern border communities until there is clear evidence of regained market share and stabilized cross-border traffic