Canada’s international travel deficit soared to an all-time high in 2006, as spending by Canadians in both the United States and overseas countries climbed to record levels.
The deficit, the difference between spending by Canadians abroad and spending by foreigners in Canada, jumped $1.4 billion to an estimated $7.2 billion in 2006. The travel deficit has increased every year since 2002, and in that span, has more than quadrupled.
The burgeoning deficit was the result of record spending abroad. Canadian residents spent an estimated $23.6 billion outside the country in 2006, up 6.2% from the previous high in 2005.
Foreigners in Canada spent an estimated $16.4 billion in 2006, a slight decline from the previous year.
While there has been little movement in foreign spending in Canada compared to 2001, Canadian spending abroad has gone up 27.9%.
Travel deficit with the United States highest in 13 years
Canada’s travel deficit with the United States climbed to $4.5 billion in 2006, the highest since the early 1990s when record deficits flirted with the $6.0-billion mark. In contrast, the travel deficit with the United States was as low as $544 million in 2002.
The increase in the deficit, estimated at $1.0 billion, was the result of higher spending by Canadians in the United States and lower spending by residents of the United States in Canada.
Canadian travellers spent a record $13.2 billion in the United States in 2006, up 6.3% from the previous year. Increased travel south of the border contributed to the higher spending, as Canadians took 16.0 million overnight trips to the United States in 2006, 7.6% more than the previous year and the highest level since 1993.
Meanwhile, travellers from the United States spent 2.9% less in Canada in 2006 than in 2005. Spending by United States residents in Canada slipped to $8.7 billion, its lowest level since 1998. Americans took 13.8 million overnight trips to Canada, 4.3% less than the previous year and the lowest level since 1997.
Another likely contributor to the drop in spending by American travellers is the prolonged slide in the number of same-day car trips from the United States. Same-day car travel from the United States fell for the seventh consecutive year in 2006, down 12.5% to a record low of 13.7 million trips. Although spending on these trips represent only about one-ninth of total spending by American travellers in Canada, the drop in travel was significant enough to have an impact.
The Canadian dollar averaged 88.2 US cents in 2006, up 6.8% from the previous year and the highest level since the late 1970s.
Travel deficit with overseas countries hits record high
Canada’s travel deficit with overseas countries climbed to a record $2.8 billion in 2006, an estimated $368 million increase over the previous year. The rise in the deficit, the sixth consecutive of its kind, was attributable to higher spending by Canadian residents overseas, which climbed 6.2% to $10.4 billion.
Over the past 25 years, spending by Canadians overseas has fallen only once, in 1991. This trend in spending is likely the result of an increased desire by Canadians to visit overseas destinations, as travel overseas has also steadily edged up since the early 1980s. In 2006, Canadians made 6.7 million overnight trips overseas, 8.0% more than in 2005.
Travellers from overseas countries spent $7.7 billion in Canada in 2006, 3.2% more than the previous year. Residents of overseas countries made 4.4 million overnight trips to Canada, up 0.7% and the highest level in six years.
The Canadian dollar edged up against other major international currencies in 2006, including the euro, the British pound sterling and the Japanese yen.
Fourth quarter: Travel deficit highest ever
On a quarterly basis, the international travel deficit climbed to $2.1 billion in the fourth quarter, topping the $2.0-billion mark for the first time ever.
The increase in the deficit occurred despite higher travel spending in Canada. Foreigners spent $4.2 billion in Canada, 1.4% more than the previous quarter. However, a jump in spending by Canadians abroad more than offset this increase, as Canadian travellers spent $6.2 billion in the fourth quarter, up 3.7% from the previous quarter.
The travel deficit with the United States remained fairly stable in the fourth quarter, edging up only $34 million to $1.2 billion. Despite the small increase, the deficit climbed to a 13-year high.
Travel spending by visitors from the United States in Canada climbed to $2.2 billion, up 0.4% from the previous quarter. The increase in spending was fuelled by a 1.3% gain in overnight travel from the United States, which reached 3.4 million.
Spending by Canadians travelling to the United States reached $3.4 billion, up 1.3%. The higher spending was the result of a similar increase in overnight travel south of the border, which climbed 1.2% to 4.1 million trips.
There was more movement in the travel deficit with overseas countries. It reached a record $819 million, up $132 million from the third quarter. The unmatched deficit was the result of record spending overseas, whose increase more than offset the rise in spending by residents of overseas countries in Canada.
Spending by travellers from overseas countries climbed to $2.0 billion, 2.5% more than the previous quarter. Higher spending by travellers from overseas countries was the result of increased overnight travel to Canada, which climbed 2.2% to 1.1 million trips.
Meanwhile, Canadians spent a record $2.8 billion in overseas countries, up 6.9% from the previous quarter. Record spending overseas is not surprising, as travel by Canadian residents overseas reached unprecedented levels in the fourth quarter, up 4.6% to 1.8 million trips.
The Canadian dollar fell against other major international currencies in the fourth quarter of 2006, including the US dollar, the euro, the British pound and the Japanese yen.
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Statistics Canada produces statistics that help Canadians better understand their country�its population, resources, economy, society and culture. In Canada, providing statistics is a federal responsibility. As Canada�s central statistical agency, Statistics Canada is legislated to serve this function for the whole of Canada and each of the provinces. Visit www.statscan.ca.Tags: Capgemini, Efma, InsurTech, World Insurance Report