Tourism’s gross domestic product (GDP) grew by 1.3% in the second quarter, which was faster than most other parts of the economy, even though overall real GDP by industry fell by 0.2%.
Tourism’s share of nominal GDP rose from 1.75% to 1.77% in the last quarter, showing that this sector is doing more of the work to help the economy grow.
Real tourism spending in Canada was $26.5 billion, which is a 0.9% increase from the first quarter’s small drop.
Canadians’ choice to travel and spend money in their own country was the main reason for the recovery, and this is clear in the national accounts.
Travel within the country made up for weakness from abroad
The strongest engine was domestic demand, which rose 2.9% from the first quarter.
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Spending on lodging services went up 6.5%, and spending on food and drink services went up 3.9%.
Transportation demand went up 1.5% for residents and 0.7% overall. This was helped by a change in the transportation industry’s earlier weakness.
Tourism exports fell 5.3% in the quarter because Canada had fewer overnight visitors, with a 10.2% drop from the United States.
All of the main product groups connected to nonresidents went down. Non-tourism products went down 8.7%, accommodation went down 5.1%, and food and drink services went down 6.5%.
This meant that the share of total spending by nonresidents was smaller than in recent quarters.
Accommodation GDP went up 2.4%, and food and drink services added 1.0%. Transportation GDP went up 0.9%, which is a change from the first quarter’s drop.
Non-tourism industries that benefit from visitors also got stronger, rising 0.7% after a slow start to the year. For operators, this pattern suggests that average daily rates and restaurant volumes probably did more business than cross-border foot traffic for another quarter.
For some background on early Q3, check out our articles on [Canada’s GDP rose 0.2% in July as goods producers rebounded] and [Canada restaurant sales extend gains in July; prices up 3.2%].
These are in line with the strong lodging and dining that carried Q2.
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Tourism-related jobs rose by 0.6% to 712,100, which is more than the 0.2% rise in jobs across the economy.
The share of jobs in tourism rose from 3.32% to 3.34%. The biggest contributors were food and drink services and recreation and entertainment.
The number of people working in hotels stayed the same, which is a reminder that hotels can have trouble hiring enough staff when they rely on productivity and scheduling to meet demand.
The release’s leading indicators show that air arrivals grew from year to year through July and August, while land entries fell.
That pattern makes it look like inbound travel could get stronger along flight paths, even if road traffic stays uneven.
However, the domestic economy is still doing most of the work, as Canadians say they plan to spend more on vacations in Canada and less on trips to the US.
Statistics Canada, PDF, National tourism indicators, second quarter 2025
