Weak Canadian economy, low loonie expected to limit cross-border travel

MONTREAL - The American sunbelt is expected to feel a chill this winter from Canada's weakened economy and a loonie that's lost more than a quarter of its value in the past couple of years.

See Full Article

Overnight cross-border travel was down about nine per cent in the first nine months of the year over the same period last year, but more Canadians are likely thinking twice about forays to top destinations in Florida, Arizona, California and Texas this winter given the Canadian dollar is expected to drop even further.

"Clearly there's going to be some hurt in some of the traditional snowbird markets," Derek Burlton, TD Bank's deputy chief economist, said in an interview.

The bank is predicting the Canadian dollar will fall to about 71 cents US before recovering somewhat to 80 cents in the next couple of years.

Burlton said some Canadians - especially those in hard-hit Alberta who tend to visit Arizona and California - may stay closer to home this winter. But those who crave the retirement lifestyle may offset the higher cost of travel by cutting back on restaurant meals, shopping or even reducing the length of their vacations.

"The trips will happen, (but) I think there may be some efforts to mitigate some of the impact on costs from a weaker Canadian dollar," he said.

Douglas Gray, author of The Canadian Snowbird Guide and operator of the website snowbird.ca, said travelling south is too important to the snowbirds' quality of life for them to abandon their winter habit entirely.

"They may cut back a few weeks if they feel they need to because they have an incredibly tight budget, but generally speaking, people will make adjustments accordingly to try to stay there because that's where their friends are," he said from Vancouver.

Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, said fewer Canadian visitors this year could hurt a slew of tourism-related businesses and generate lower state sales tax revenues.

"When you're talking about 25 per cent or so loss in the value of the loonie - that's a pretty significant hike in prices in stores or on menus in restaurants for Canadian visitors," he said.

Florida is among the top U.S. destinations for international travellers, including one in five Canadians who cross the border.

But for the first time in several years, travel from Canada to the state is dipping. Florida has been able to partially offset the drop in Canadians who used to drive south by attracting more air travellers with additional flights and new carriers to the state, including Toronto-based Porter Airlines, said Paul Phipps, chief marketing officer of Visit Florida.

Any hit from fewer Canadian visitors has been balanced by record numbers of travellers arriving from other locations. And Phipps adds that more than 700,000 Canadians own second homes in the state.

"So they're going to continue to travel because they already have their housing, and family and friends will come and take advantage of that secondary housing too."

After peaking in 2010, Canadians purchased US$11.2 billion worth of properties in the United States in the 12 months up to March 2015, said the National Association of Realtors.

They were replaced by the Chinese as the top international buyers with Florida, California, Texas and Arizona accounting for half of all sales.



Advertisements

Latest Economic News

  • Costco investigated over allegations pharmacy directors accepted kickbacks for certain brands

    Economic CBC News
    Costco is being investigated by Ontario's Ministry of Health for its compliance with the province's legislation on selling pharmaceutical and over-the-counter drugs. The health ministry investigation comes after the Ontario College of Pharmacists (OCP) announced it would hold disciplinary hearings for two Costco pharmacy directors because of allegations that they accepted Source
  • Costco to be investigated by government over compliance with drug-selling rules

    Economic CTV News
    TORONTO -- Costco is being investigated by Ontario's Ministry of Health for its compliance with the province's legislation on selling pharmaceutical and over-the-counter drugs. The health ministry investigation comes after the Ontario College of Pharmacists announced it would hold disciplinary hearings for two Costco pharmacy directors because of allegations that they accepted kickbacks for stocking certain brands. Source
  • United Airlines will pay US$2.4 million to settle with SEC

    Economic CTV News
    WASHINGTON -- The parent company of United Airlines will pay US$2.4 million to settle civil charges by securities regulators over flights that were started to help an official who oversaw one of the airline's hub airports. Source
  • 4 of world's biggest cities have plans to get diesel off their streets

    Economic CBC News
    Four of the world's largest and most polluted cities have decided to ban diesel cars and trucks from their streets by 2025. The mayors of Paris, Mexico City, Madrid and Athens announced the commitment in Mexico City on Friday at the C40 Mayors' Summit, a meeting of city leaders. Source
  • U.S. health care tab hits $3.2T; fastest growth in 8 years

    Economic CTV News
    WASHINGTON -- The nation's health care tab grew at the fastest rate in eight years in 2015, driven by the coverage expansion in President Barack Obama's law and by costly prescription drugs, the government said Friday. Source
  • Stelco begins hiring to fill key roles as it prepares to operate independently

    Economic CTV News
    HAMILTON -- The Stelco name is back and the southern Ontario steelmaker says it has launched a hiring program as it prepares to resume functions that have been performed outside the country while it has been a subsidiary of U.S. Source
  • Snap, crackle, populism: Why Breitbart is calling for a Kellogg boycott

    Economic CBC News
    Breitbart News, the conservative U.S. news and opinion website known for its vociferous support of president-elect Donald Trump, is calling on readers to boycott Kellogg food products after the company pulled advertising from the website. Anti-Kellogg content dominated the top of the Breitbart homepage Friday, as the website urged people to "Sign the petition never to buy Kellogg's again!" Source
  • 'No warning intended' to pipeline protesters, clarifies Natural Resources Minister Jim Carr

    Economic CBC News
    Natural Resources Minister Jim Carr says his comments about the possible use of "defence forces" or police during future protests over pipeline projects approved this week by Ottawa weren't meant to be read as a threat. Source
  • Ford recall over faulty seatbelts affects 35,600 Canadian cars

    Economic CBC News
    Ford is recalling 680,000 mid-sized sedans, including 35,614 in Canada, because of seatbelts that could fail in a crash. The recall covers 2013 to 2016 Ford Fusion, 2013 to 2015 Lincoln MKZ and 2015 and 2016 Ford Mondeo cars,Transport Canada lags on vehicle safety — auditor general Source
  • Blame wages and turtle doves: '12 Days of Christmas' now costs US$34,363

    Economic CTV News
    PITTSBURGH -- The slow recovery of the U.S. economy is continuing to keep the cost of Christmas -- or at least the gifts listed in "The Twelve Days of Christmas" -- from spiraling out of control. Source