The Agenda with Steve Paikin (Audio) - What Boycotting U.S. Travel Means for Tourism

Episode Date: April 25, 2025

Punishing tariffs. The 51st state. Canadians are making their feelings known about threats coming from the United States by pulling back on travel into the country.But is the U.S. government taking notice? And while it might seem like an advantage for Canadian tourism, businesses near the borders are taking a hit. What are the lasting effects of this situation? To discuss how all this is falling out, we welcome, in studio: Federic Dimanche, director of the Ted Rogers School of Hospitality and Tourism Management at Toronto Metropolitan University. In Traverse City Michigan, Mike Kent, communications director for Traverse City Tourism. In Ottawa, Ontario, Beth Potter, president and CEO of the Tourism Industry Association of Canada.See omnystudio.com/listener for privacy information.

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make a first time donation and continue to discover your two-point TDO. Canadians are making their feelings known about threats coming from the Trump administration by pulling back on trips south of the border. But is the U.S. government taking notice? And while it might seem like an advantage for Canadian tourism, businesses near the border are taking a hit. What are the lasting effects of this situation? Let's ask in Fort Lauderdale, Florida, Terry Dale, president and CEO of the United States Tour Operators Association. In the nation's capital, Amy Butcher, vice president of stakeholder relations and engagement

for the Tourism Industry Association of Canada. In Sarnia, Ontario, Tanya Lee, owner of Blue Water Bridge Duty Free and president of the Frontier Duty Free Association. And with us in studio, Frederick Dimange, professor and director of the Ted Rogers School of Hospitality and Tourism Management at Toronto Metropolitan University. Welcome Frederick in studio and for those joining us on the line. Let's start by just seeing how much US travel has been affected since 2024. Road trips over the border into the US dropped by an estimated 32% compared to March 2024 according to Statistics Canada. Air travel declined 13.5% year over year.

According to a recent abacus poll 62% of Canadians say they'll avoid traveling to the US this year. And according to the US Travel Association, a sustained decline of more than 30% in Canadian visitors could translate to more than $6 billion in losses to the American economy in 2025. Frederick, I'm going to mean to you first. Why is this all happening? Well, thanks.

Good question. That's a good question. There are several factors. So obviously, this started with the investiture of President Trump. And you remember what he said in January, he said a few things that were not very nice to the Canadians. The Canadians felt disrespected. He called our prime minister a governor.

He was talking about the 51st state in Canada. So that was already one thing that Canadians didn't like. A second thing was obviously the tariffs, the economic war. So it turned out to be not just towards Canada, but also towards Mexico, and then it was a world economic war, basically. Everybody is sticking ahead as a result of this. And then there are some other factors, I would say. Also, the low Canadian dollar dollar as compared to the American dollar

is a contributing factor, I believe. And in the recent weeks, we have seen in the news a lot of issues regarding people at the border. People being afraid of being detained, people being afraid of having difficulty crossing the border. So when you put all those factors together, that explains the big decline. All right. Terry, I'm curious.

As Roger had mentioned, Canadians have had a visceral reaction to comments like, Governor, the 51st state comments. But when did you start noticing this turn sort of turning into a real decline? Well, I started hearing from our members about two and a half months ago, that there was a pause, uh, a hesitation, shall we say, uh, from the Canadian market. And we understand.

And first and foremost, let me just say to your audience, we get it. We are sorry that we're in this circumstance. You're our best neighbors, and our best market here in the US. And we regret that we're in this situation that we are today. But we will get through this cycle. If there's anything I'm certain of, it's uncertainty. This cycle will continue to be uncertain. I try and always put myself in the other person's shoes. when I do that, and I think if your prime minister had declared the US as the 11th new province of Canada, how would we have responded?

And I think we know the answer to that. So we get it. We're sorry. We value as our friend and partner. and we'll get through this together. I am curious, Terry, you know, there is this stereotype that the neighbors to the north here were nice. I am curious, are you surprised by sort of the maybe the kind of the stance that Canadians have taken that, uh, you know, we're not going to be, some say are not putting up with us.

I am, and I, and I'm not, because honestly, uh, in my capacity of president of USTOA, I travel the world. And honestly, I have always said the Canadians are the nicest people in the world. And I mean that genuinely. So there's a certain element of a surprise, but then when I step back and say, but I understand the response that you're having under these circumstances. So you know, am I a little surprised? Maybe a little, but I understand why you're offended. And I get it, we get it.

We just have to hold on. Fair enough. All right, Amy, let's talk economics here. The tourism industry is intricately connected between Canada and the US. What's the biggest worry economically for Canada? Well, it's twofold. Number one, the US market is our biggest international visitor market into Canada. is our biggest international visitor market into Canada. And so we echo the same sentiment

that we understand this is an issue between administrations. It's not between our peoples. We talk in Canada about elbows up, but as a tourism sector, we also talk about arms wide open. And so the economic impact is, one, we're seeing a decline in US visitors. And we want to reassure American visitors that they continue to be welcomed. And we also want to remind Canadians that we are welcoming people, we

are open to receiving visitors from all over the world. And again, this is a fight between administrations. Canada is ready to welcome the world as we enter into our tourism season. But at the same time, we're also seeing, you know, this renewed sense of pride. And just like choosing local is an act of patriotism, choosing to visit Canada and staying in Canada, we're seeing as equally as an act of patriotism. So what we're seeing from our members is increased bookings. Canadians are making a conscious decision to choose Canada this year.

All right, Tanya, before we get into the sort of the impacts that you've seen, I am curious, can you describe for us how duty-free works at border crossings? Most definitely. So many people may not know that we are all small family-owned duty-free shops, mom and pop shops on the border. We have 32 duty-frees across Canada in rural border towns, and there are 10 here in Ontario alone. And in some of these border communities we are big job creators, we are the economic anchors in these small towns. One of the facts that people may also not know is that we are export businesses. We can only sell to travelers going into the

USA. So in times like this, we cannot pivot. We don't have a domestic market that we can sell into. We can't take advantage of domestic tourism. So we're kind of like the forefront of this tariff war. And I imagine online shops don't exist. We do not have online shopping at all. We can only sell to consumers going into the US. All right. Tell me a little bit about how your business and other businesses are managing

with the downturn in road border crossings. So we are seeing industry-wide a decline of 40 to 60%. You will see in our stores in BC, in New Brunswick, they are harder hit. They could be anywhere down from 40 to 80 percent. So short-term everyone is looking at the hours that they're opening. They're looking at cutting back on shifts for our staff, cutting back on expenses most definitely. But we're really concerned more about what the long-term effects would be like in this industry. When you talk about long-term, you

don't have to look that far to sort of look at the latest disruptions, COVID. I'm curious, were there similar disruptions during COVID to what we're seeing now, or is this perhaps worse? It's an eerie, similar feeling for us. So some of our stores were closed for 20 months during COVID. And during that time, the owners would put money back into their businesses. They took out CBA loans. Some of them are still paying off these loans.

And it's been very scary for us as an industry. We all watched Easter weekend really closely just to see as a benchmark where we would be at. I know my store alone was down 30% versus a year before. So, you know, you start to bring these things into effect and we sell to a lot of, you know, we sell a lot of Canadian products in our store. So we have a lot of Canadian suppliers, and we're concerned that if this continues long term,

we're going to start to lose our supply chain. And once we start to do that and there's a trickle-down effect, we may not get back this industry. And this is a viable industry. Terry, you're in Florida, a big tourist attraction for Canadians, of course. What economic repercussions are you seeing a few months into this trend? Well, it's significant, and we expect that's going to continue. But what we want to focus on is how do we bridge this, which is why we created this coalition of all of these travel associations here in the US,

and also the Canadian Association of Tour Operators, to start figuring out how do we message how do we message to our population that we are welcoming to Canadians and Canadians are welcoming us to your is these travel associations are lobbying entities. So I will be in DC June 3rd and 4th with my membership, knocking on legislators doors, telling this story and encouraging them to do what they can do to do the right thing to restore this because encouraging them to do what they can do, to do the right thing, to restore this because of the economic harm that it's having on both Canada and the U.S. So it's really rallying the troops, telling the story, and sticking with them. telling the troops, telling the story, and sticking with them.

We cannot let up and we won't. I am curious, what are you hearing from your members directly? We got an idea from Tanya, sort of the businesses, the dire situations, and it's your family businesses. What does it look like with tour operators? How dire is the situation? Yeah, our tour operators are very diversified. So I can't speak with specificity other than what I heard at my board meeting last week in Turkey. And their call centers have paused. So very few Canadian calls are coming in, which obviously is a direct reflection

of what we're going through. Now, how that translates for this season, we're concerned, but it's kind of a wait and see attitude because as I'm sure you folks know, as well as I do, we wake up in the morning and we find a different message coming from the administration about the tariff scenario. We pause it for 90 days. We're going to lessen or increase it, whether it's on China or other parts of the world.

So nothing is harder for businesses and especially small businesses on the border to have a business plan and to plan for the future because uncertainty is all that we know at this point. So it's a tough scenario. asked about COVID, it does have some resemblance of what we went through with COVID. And never did I think we would face something similar. But it does have some similar feelings to what we went through with the pandemic. All right, I want to get everyone's take on a comment that was made yesterday. in response to a media question about the decline in travel from Canada.

President, US President Trump said, it's not a big deal. Frederick, what happens if this decline lasts well into his term? I think unfortunately the decline is going to last because we were just talking about the tariffs. It's not just a matter of tariffs. It's a matter of reputation. And the reputation of the US has been damaged. And I think it's going to be for a long time, unfortunately.

And it's not coming from Canada only. We know that the reputation has been affected in Europe as well in some of the countries. So we see all the travel and tourism trends going down towards going to the United States. So it will affect, maybe it won't affect Mr. Trump and the overall economy of the United States, but it will affect some states for sure.

If you think about Florida, if you think about Arizona, if you think about some of the broader states, they will be very much affected a lot more than the overall US economy. Amy, I wanna get your take on that. You know, those comments, it's not a big deal. I imagine you have some other thoughts on that. Yeah, I want to get your take on that. You know, those comments, it's not a big deal. I imagine you have some other thoughts on that.

Yeah, that's interesting. And I think it speaks to the importance of telling our story around tourism. And what people probably don't know is that Canadians outspend Americans in the US significantly Canadians spend about $20 billion in the US compared to 13 that Americans spend in Canada. So there is a spending deficit there. But as others have said, it's important to continue to tell that story with legislators and decision makers, which we do in Canada, but especially in those border states, which are going to be hit really hard.

Tanya, your thoughts on those comments. I have very strong thoughts on that. It is a big deal. It is a big deal to these rural border communities that rely on cross border traffic. It's important to our small town prosperity. And you know, it's important because we are so integrated on the border with our border towns on the other side. We've had shared traditions and shared events that we go to in Sarnia and Port Huron. We would float down the river together. And then you're starting to disrupt this. And that's the heartbreaking part of all of this. Terry, I'll get your take on that as well. Well, I only agree with my colleagues here on the panel.

The reputational image, our brand as a country that welcomes people from around the world is and will be damaged. So we have got a tremendous amount of work to do to try and restore that. There's no simple solution in how one goes about doing that, but we recognize how challenging this is. And so we've got our work cut out for us, but it is a big deal. Regardless of what our president may say and dismiss the economic impact that this has, it's a big deal. And we as an industry, we recognize it, we see it, we feel it, and we just have a lot of work to do.

We see it, we feel it, and we just have a lot of work to do. Frederick, that comment that Tanya made, that image of floating down the river, just how important these relationships have been sort of nurtured and taken care of for so many years, I am curious, how are they coming apart? And what is required to sort of patch this friendship and relationship? It's like any relationship. It's a matter of trust, first of all, and respect.

And so when that trust has been shut down, basically, you know, it's going to take a long time to recover that trust. So it's true for, you know, neighbors working on their loan. It's true for countries' neighbors and travelers going across. So I think it's going to take a long time, frankly. And as my colleague said, it's going to be a lot of work for the US tourism industry

to compensate, to work towards reestablishing that trust with international travelers, Canadians and others. And it's a lot of work and a lot of time ahead of us. Amy, I am curious about potentially what advantages there might be for the Canadian economy. If Canadian tourism money stays in Canada, is there a concern that we'll run out of capacity or that flights and hotel prices will be driven up? Is there a concern that will run out of capacity or that flights and hotel prices will be driven

up? Is there a negative consequence potentially from some of this? So there is tremendous growth potential in the tourism sector in Canada. We expect to outpace economic growth over the next few years. We've set some important growth strategy goals for 2030. And so our operators and our members are ready. Now governments, it's important that governments pay attention because we do need ongoing support in terms of infrastructure investments, in terms of faster visa entry, in terms of workplace gaps with our skilled workforce.

But I will say that this renewed commitment to Canadian tourism is something we're really encouraged by because as we've been saying to the world, we have so much to offer. saying to the world, we have so much to offer. Visitors are really looking for more unique experiences and Canada has those in spades, right? We have mountains, oceans, indigenous tourism, we have big cities, small towns. And what's important about the tourism sector is that it exists in every single part of the country. There is no community that's untouched by tourism. And so by looking at how do we strengthen our country, how do we create more vibrant, more connected, more prosperous communities, that starts with tourism.

A great place to live is also a great place to visit. that starts with tourism. A great place to live is also a great place to visit. And so we are encouraged by Canadians looking inwards and choosing Canada. And we're really looking forward to the years ahead in terms of how can we all work together to strengthen our sector and really tell that collective story of what it brings to Canada. Frederick, how can Canada gain from this? Well, like we said, you know, domestic tourism is obviously going to be something.

I think Canadians may be more likely to travel and explore Canada again, maybe. But let's not forget that the Canadians love to go abroad as well, and they will continue to. And tour operators, travel agents tell us that there is renewed interest in some destinations, you know, in the Far East, in Southeast Asia, in agents, tell us that there is renewed interest in some destinations in the Far East, in Southeast Asia, in Europe, et cetera.

Another opportunities we have, I think, is to bring to Canada the travelers who were thinking about traveling to the United States. If you want to have a North American experience and you don't want to go to the United States, well, maybe you're going to be thinking about coming to Canada as well. So I think we're going to see this summer a surge of European travel, for example,

coming to visit Canada. And we have to take advantage of that. I am curious, sort of call it a boycott or protest with keeping some people deciding not to go cross-border. How much does that actually sway policy? Is this something that will be short-lived? Is this something that has the potential to make some change? And we talked about the comments of US President Donald Trump. Are you talking about the US policies? Correct. Unfortunately, I'm afraid that no matter what we do

and what happens, Mr. Trump is not really paying attention. He's got his idea. We don't exactly know what is his main idea. Frankly, a lot of his decisions are difficult to understand for many of us. So unfortunately, I don't think tourism has that big power to change policies at the national level in the United States. But who knows?

It's a matter then of the local representative, of the industry, the lobbyist, to go to Washington, DC, to lobby the Senate, to lobby the House of Representatives, and to lobby Mr. Trump. Terry, then I'm going to come to you. You had mentioned the organization, the Beyond Borders Tourism Coalition. It seems like it's going to be an uphill battle.

If you've got a president that doesn't seem to necessarily see this as a big decline, what are the challenges ahead for the coalition and sort of the group? Well, the challenges are staying united and focused. But I think the commitment I've seen and heard from my colleagues from this Beyond Borders Coalition is very strong and very steadfast. So our responsibility to you, our partners, is to make sure we deliver that message about the economic importance of tourism, both to us and to Canada. And we will do that in early June.

Some of my other associations have been up there last week. So it's a matter of what I call Operation Pester. We cannot stop. We have to stay on message and stay vigilant in how we deliver it. And one thing I wanted to touch on in addition to this is the impact to Indigenous communities in Canada and how important they are to this cultural exchange that we have between the US and your country.

And it's just heart-wrenching to know the kind of devastating impact that if US travelers don't go to Canada, what it does to the indigenous communities. But that cultural exchange is key to what our tourism industry is all about. And I have been saying for, I don't know, the last couple of months, two countries, one community, and our community, which is Canada and U.S. has the unique opportunity to do what very few other sectors of our economy can do.

And that is we bring people together and we grow and learn and celebrate the, you know, indigenous communities, everything that makes both countries and our people special. So to me, two countries, one community, we have a responsibility to deliver to our friends, our colleagues there in Canada. And trust me, it's my job every day to do that, whether it's in DC or other places. All right. I am going to play a clip. This is a clip from California Governor Gavin Newsom, sent in a message to Canadians. Let's have a short look at this clip.

Last year, nearly 2 million Canadians visited California because here in California, we've got plenty of sunshine and a whole lot of love for our neighbors up north. All right. So pretty much a similar sentiments as what Terry was saying, Tonya. I'm curious, you know, given the earlier stat of 62% of Canadians saying they won't travel to the US this year, how do these personal appeals and marketing tools help or are they falling on deaf ears? I think they're falling on deaf ears right now. I think there's a definite sense of uncertainty and confusion.

And that is what's stopping a lot of people from going across. They're seeing articles, they're hearing things about travelers in the US who are not having great experiences, and that leads to a narrative. Anything that leads to uncertainty or stickiness at the border really makes people think twice about going across. I think with these tariffs too, people don't know, how much can I take into the States?

How much can I bring back? So they just stop and they say, maybe it's just too confusing. I just won't go over today. And border towns, you'll see people crossing before this, you would see people crossing multiple times per week. Amir? Yeah, I know I echo those sentiments. I mean, certainly marketing campaigns, we rely heavily on to draw people into the country, but anytime there's uncertainty, and I mean, there's a lot of uncertainty in the world generally. And so people's sense of control, what can they control?

Well, they can control their decision to go into the US or not? And I think that's what we're seeing. I think we're seeing, you know, as Canadians, we're an informed people and right now they're choosing, no, not right now. And so while I commend the governor for those marketing efforts, and I think you still need to find ways to reach people. At this time, I think Canadians have said, not forever, but right now I'm choosing. I'm taking this and I'm controlling what I can and choosing not to go. Roger? I agree. However, one thing that I liked about the governor's message is that he's working for the long term. He may not change anything for the very short term, but you have to build relationship.

And colleagues, two operators, USTO, you know that. You have to, through a crisis, work with your client over a long period of time. And that's how you're going to be gaining trust again and gaining respect again. So it may not do much in the short term, but for the long term, I think it's an important thing that they continue to attract the Canadian market. And, Terry, I'll get your thoughts on that as well. Yeah, we have a lot to do to reestablish our country as a welcoming country to our Canadian family. So, you know, the governor's message may not be well received at the moment,

but I agree that long term we have to be consistent in delivering that message, because we will work our way through this. But I know short term, it's going to be tough, but we need to do whatever we can to say, we value you. You're our friend, our neighbor, and we want you to come back as well as us citizens going to candidate. Tanya, you're in a unique situation with sort of being a small business. What supports are you asking for to help duty-free businesses?

So we understand Team Canada, we're all Team Canada, but we also understand that long-term our industry is going to be really hurt and all the border communities. So we've been asking the government, there are some small, easy regulatory measures that they can immediately put in place. They could do it today. That would really go a long way to leveling the playing field for our industry versus the U.S. competition. But I think of greater need right now. We are asking for targeted specific pandemic-like supports to weather this storm. And I really want to emphasize, we're not asking for bailouts. We're asking for fairness and a chance for this industry to survive.

We've been a part of so many road trips and people's journeys over the years. We want to see this industry still here when this passes. We are going to have to leave it there. Tanya, Amy, Terry, Frederick, thank you so much for joining us on the program. Some very insightful stuff and hoping all the best for you, Tanya, as well. Thank you. Thank you. It's our pleasure. Thank you.