The tourism industry outpaced the broader economy in the spring of 2025.
Tourism gross domestic product grew 1.3 percent between April and June, up from 0.3 percent in the first quarter. The overall economy, meanwhile, contracted 0.2 percent. Tourism’s share of national GDP rose slightly to 1.77 percent from 1.75 percent.
Hotels and other accommodations led the gains, climbing 2.4 percent. Restaurants and bars added 1 percent, and transportation services recovered with a 0.9 percent increase after falling earlier in the year.
Total tourism spending rose 0.9 percent in the quarter, driven almost entirely by Canadians. Domestic spending jumped 2.9 percent, supported by higher outlays on lodging, meals, and retail purchases linked to travel.
International tourism was the weak spot. Spending by foreign visitors to Canada fell 5.3 percent, the second consecutive decline. Overnight arrivals dropped nearly 7 percent, with travel from the United States down more than 10 percent. All major spending categories by foreign travellers slipped, including hotels, food services, and non-tourism purchases such as retail goods.
Tourism-related employment increased 0.6 percent in the quarter, outpacing the 0.2 percent gain in the wider job market. The sector employed about 712,100 people, or 3.34 percent of the Canadian workforce. The strongest hiring was in food services, recreation, and entertainment, while accommodation jobs were flat.
Preliminary summer border data showed mixed signals. Non-resident air arrivals were up in July and August, while land arrivals declined. Fewer Canadians returned from air and land trips abroad over the same period.
In 2024, the tourism sector contributed $32.7 billion to federal, provincial, territorial, municipal, and Indigenous governments, up 5.1 percent from the previous year. Consumption taxes on goods and services made up the largest share, followed by income taxes from businesses and employees. Every $100 spent on tourism in Canada generated $25.21 in public revenue.