As the dust settles south of the border following another contentious election season, U.S. President-elect Donald Trump is preparing for a second term while making pledges that are cause for concern for Canadian business leaders—most notably his promise to implement a 25-per-cent tariff on all Canadian goods.
There are of course a whole host of other implications and questions tied to the return of Trump—what becomes of efforts to combat climate change? NATO? Canada’s abundance of water?—but the threat of significant tariffs is currently front-and-centre for leaders of all stripes.
While it may not come to fruition, Canada is preparing for the worst.
“If Canadian tariffs are imposed by the U.S. government, that would certainly be a real concern for Canada’s economy, noting that increased costs of Canadian goods to American consumers would be detrimental to Canada’s exports, with the potential outcome being reduced demand for Canadian goods leading to unsold inventory, higher unemployment and declining Canadian GDP,” said Tourism Whistler’s president and CEO Barrett Fisher, in an email.
“While American consumers will also be negatively impacted by tariffs, Canada’s tourism industry is a potential anomaly within the economic mix, as a corresponding weaker Canadian dollar is advantageous for American visitors whose U.S. dollar goes much further in Canada. Canadians who typically travel to the U.S. will also find their dollar goes further here in Canada.”
Which begs the question: is Donald Trump good for tourism in Canada?
“If our Canadian dollar drops further against the U.S. greenback, then that could actually compel more people, particularly from border states, to want to travel to Canada, just simply because of the advantage,” said Walt Judas, CEO of the Tourism Industry Association of BC (TIABC).
“The other consideration here is that tourism could be then one of the bright lights in all of this, in other words, other sectors may suffer, but the tourism industry could actually come out reasonably favourably.”
During a Nov. 29 visit with Trump at his residence in Mar-a-Lago, Fla., Prime Minister Justin Trudeau reportedly promised the incoming president tougher border controls—which itself could have implications for tourism, Judas noted.
“Could that mean that Canadians will experience tighter border security going forward, meaning longer wait lines, etc., and they’ll decide not to go into the States?” he said. “Or conversely, Americans may find that it’s much more difficult to go back and forth as well.”
For now there are more questions than answers, both in the tourism sector and beyond.
Generally, and depending on the region, tourism in B.C. enjoyed good fortunes in 2024, Judas said, adding the industry is optimistic about the year ahead under new NDP tourism minister Spencer Chandra Herbert.
That said, the industry is still looking for concrete action (including more funding) and for tourism to be part of the broader economic plan in the province.
Judas noted tourism wasn’t mentioned by any party during the October provincial election campaign.
“We think that tourism has a potential for investment, it’s got potential for new product development and growth,” he said. “We’d like to see some of the infrastructure further developed in different places around the province, whether that’s highways or airports, or ferry terminals, investment in new ferries—things like that would be helpful.”
Judas and TIABC are also hoping for a boost to Destination BC’s $60-million marketing budget, which is out of step with the rising costs seen over the last five years.
“When you think about costs having gone up in the last five years about 20 per cent, at the very least you need to keep pace with the costs,” he said. “So if you look at other jurisdictions—Alberta, Ontario, etc.,—you can draw comparisons there, but at minimum, 20 per cent. But I think as costs continue to go up, our dollar is losing value, [and] you really have to adjust accordingly.”
For now, all eyes remain on the threat of a 25-per-cent tariff.
Louise Walker, executive director of the Whistler Chamber, noted Canada, the U.S. and Mexico have a long history of collaboration and free trade.
“The tariff would impact certain export sectors more than others, creating job losses. In addition, the tariffs would impact supply chains, which in turn impacts consumer costs,” Walker said in an email, noting the Canadian Chamber of Commerce’s Business Data Lab estimates the tariff would shrink Canada’s GDP by 2.6 per cent (or roughly CAD $78 billion), costing Canadians approximately $1,900 per person annually.
“While the tariffs would have the greatest impact on sectors such as energy and automotive, we would see a knock-on impact across businesses and employees in both Canada and the U.S., our closest neighbours and with whom we have strong and valued connections,” Walker said. “Many businesses already see the impact of cost-of-living challenges on discretionary spending, such as travel, eating out and participating in leisure activities. We need fast and constructive action so that the two nations can work collaboratively to avoid the consequences of job losses and higher prices.”
Here’s hoping Trudeau’s Florida dinner date pays dividends.
