Canada's international travel deficit hit new heights in the third quarter of this year, driven by the strength of the Canadian dollar versus the U.S. greenback.
reports that the difference between the amount Canadian residents spent outside of the country, and the amount spent by foreigners in the country, reached $2.5 billion.
The total represents a massive increase of $281 million -- or 4.9 per cent -- from the second quarter of 2007 as the high dollar enticed Canadians to spend more money south of the border.
"That's another effect of the strong Canadian dollar. We are going to the United Stated in droves and spending all kinds of money down there," Business News Network's Michael Kane told CTV's Canada AM.
The news comes as the federal government announced Wednesday that finance ministers will meet on Dec. 12 to discuss the soaring loonie and how it is affecting the economy.
The manufacturing sector, hit hard by the high dollar, has called for federal relief and retailers are scrambling to find ways to encourage Canadians to do their Christmas shopping here.
While the new StatsCan data marks a significant jump, the numbers are representative of a steady upward trend. Eleven of the past 12 quarters have seen an increase in the amount spent by Canadians in other countries.
The amount spent by foreigners in Canada -- $4.2 billion -- also increased, though at a much more modest rate, up .8 per cent over the second quarter of 2007.
Spike in same-day car trips
The spending difference between Canada and the U.S., excluding other countries, was more dramatic.
Canadians spent almost $3.9 billion in the U.S. in the third quarter, a rise of 10.3 per cent from the previous quarter.
That brought the travel deficit with the U.S. to $1.8 billion, a rise of $362 million.
The StatsCan report also reveals a spike in the number of same-day car trips and overnight visits by Canadians to the U.S. -- a trend the agency attributes to the high dollar.
Same-day car trips hit 6.1 million between July and September -- a rise of 4.2 per cent from the second quarter.
Overnight travel reached 4.5 million trips, a rise of 7.5 per cent, and the highest level in 15 years, StatsCan reports.
A StatsCan analysis of travel data from the second quarter of 2007 found the most popular U.S. destinations for Canadian travellers were New York State, with 703,000 visits, followed by Florida, with 611,000 visits. That data has not yet been published for the third quarter.
Excluding the U.S.
When the U.S. was removed from the equation, Canada's travel deficit with overseas countries actually declined.
That number fell to $715 million in the third quarter, a drop of $81 million from the second quarter, which saw a record high.
"The drop in the deficit was the result of increased spending by overseas visitors in Canada and lower spending by Canadians overseas," StatsCan reports.
- Overseas visitors spent $2.1 billion in Canada, up 1.6 per cent from the second quarter;
- Canadians spent $2.8 billion overseas; down 1.7 per cent.
It is only the second time in three years that spending by Canadians overseas has dropped.
