Immigration Announcement
Tourism GDP in Canada Rises 1.3% in Q2 2025, Driven by Domestic Travel and Stronger Spending
Canada’s tourism sector continues to show resilience and economic strength. According to the latest Statistics Canada report, Tourism Gross Domestic Product (GDP) rose 1.3% in the second quarter of 2025, marking a solid rebound compared to the modest 0.3% growth in Q1.
This growth outpaced most sectors of the economy even as Canada’s overall GDP dipped 0.2% during the same period. Tourism GDP now represents 1.77% of Canada’s nominal GDP, up from 1.75% in the previous quarter, signalling a steady post-pandemic recovery supported by strong domestic demand and expanding services.
Tourism GDP Growth Fueled by Accommodation and Food Services
Tourism GDP growth in Q2 2025 was largely driven by accommodation services, which rose 2.4%, followed by gains across other industry segments.
| Industry | Quarterly Change (Q2 2025) |
| Accommodation Services | +2.4% |
| Food and Beverage Services | +1.0% |
| Transportation | +0.9% |
| Non-Tourism Industries | +0.7% |
While international visitor spending declined, domestic travellers helped keep the momentum going. Non-tourism industries, such as construction and retail, also saw growth linked to tourism activity — further highlighting the sector’s multiplier effect on the wider Canadian economy.
Domestic Tourism Spending Surges, Offsetting Global Slowdown
Total tourism spending in Canada increased 0.9% in Q2 2025, reversing the slight decline seen earlier this year. The main driver? Domestic tourism spending, which surged 2.9%, up from just 0.3% in Q1.
This uptick reflects a clear trend: more Canadians are choosing to explore their own country rather than travel abroad.
- Domestic travel up: Canadians increased local travel and vacation spending.
- US travel down: Overnight travel to the United States dropped 13%.
- Spending patterns shifted:
- Accommodation services: +6.5%
- Food and beverage services: +3.9%
- Non-tourism products: +4.2%
- Travel services: -5.5%
The data also showed that over one-third of Canadians planned to spend more on Canadian vacations, while more than half planned to cut back on US travel.
This change in travel behaviour continues to boost the domestic tourism economy, with strong benefits for local hotels, restaurants, and small businesses.
International Tourism Declines as Fewer US Visitors Enter Canada
While domestic tourism thrived, international tourism spending fell 5.3% in Q2 2025 — marking the second straight quarterly decline. Overnight travel by non-residents dropped 6.9%, and arrivals from the United States declined 10.2%. The largest decreases were seen in:
- Accommodation: -5.1%
- Food and Beverage Services: -6.5%
- Non-Tourism Products: -8.7%
Despite the decline, Canada remains one of the most attractive international destinations. The trend reflects broader global travel adjustments due to rising costs and exchange rate pressures rather than reduced interest in Canada.
Tourism Jobs Grow Faster Than Overall Employment
Another bright spot in Q2 2025 was the rise in tourism-related employment, which grew 0.6%, outpacing overall national job growth (+0.2%).
| Sector | Job Growth (Q2 2025) |
| Food and Beverage Services | +0.8% |
| Recreation and Entertainment | +1.4% |
| Non-Tourism Industries | +0.7% |
| Accommodation Services | Flat (0.0%) |
In total, 712,100 Canadians were employed in tourism-related roles, representing 3.34% of all jobs in the economy. This expansion underlines tourism’s importance as a consistent job generator and a major pillar of Canada’s economic recovery.
Government Revenue from Tourism Continues to Strengthen
Tourism remains a crucial source of revenue for all levels of government. In 2024, the sector contributed $32.7 billion in government revenue – a 5.1% increase from 2023.
| Revenue Source | Contribution (2024) |
| Taxes on Tourism Products (GST/HST, etc.) | $16.7 billion |
| Corporate & Personal Income Taxes | $7.7 billion |
| Total Government Revenue from Tourism | $32.7 billion |
Every $100 spent by tourists in Canada generated roughly $25 in government revenue, reflecting the powerful fiscal contribution of both domestic and international travellers.
Looking Ahead: Tourism Outlook for Late 2025 and Beyond
Early indicators for July and August 2025 suggest that air arrivals are rebounding, even as land arrivals remain lower. Domestic tourism will likely continue driving growth, supported by government efforts to strengthen tourism infrastructure and regional travel initiatives.
The continued rise in Canadian household spending on local travel, combined with efforts to attract new international markets, positions the sector for a strong finish in 2025.
Tourism GDP in Canada Proves Resilient and Growing
The steady growth of Tourism GDP in Canada up 1.3% in Q2 2025, highlights the country’s robust tourism economy and Canadians’ renewed passion for exploring their homeland. As domestic travel continues to thrive and tourism jobs expand, the sector remains a vital contributor to Canada’s economy and community development. Whether you’re visiting or planning to build a life here, Canada continues to grow, prosper, and open doors to opportunity.
