Cablegate: Tales of the U.S.-Canada Border #1 - Who Goes Where

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R 031836Z FEB 10



E.O. 12958: N/A
SUBJECT: Tales of the U.S.-Canada Border #1 - Who Goes Where

1. (U) Summary: Canadians regularly complain to U.S. officials
that increased U.S. security measures such as the June 2009 Western
Hemisphere Travel Initiative passport requirement have stifled
cross-border travel and U.S. tourist visits to Canada. Recent
Statistics Canada figures show that while U.S. visits to Canada
steadily declined between 2003 and 2008, Canadian visits to the
U.S. actually increased during the same period. Factors such as
the rise of the Canadian dollar and the more severe recession in
the U.S. may have had a longer lasting and more significant impact
than increased security measures. End summary.

U.S. Canada Cross-Border Travel Trends
--------------------------------------------- -------

2. (U) On January 21 Statistics Canada reported that travel from
Canada to the United States increased between October and November
2009 by 3.4 percent while travel from the United States to Canada
increased during the same period by 0.8 percent. Despite this one
month increase, however, in recent years travel by US residents to
Canada has been on a steady decline even as travel by Canadians to
the United States has increased.

3. (U) According to Statistics Canada figures, in 2008 there were
43,613,000 visits to the United States from Canada, up 21 percent
from 2003. By contrast, in that same year there were 22,605,000
visits to Canada from United States, down 35 percent from 2003.
(Note: these figures include multiple visits by the same traveler
and persons in transit from third countries.) Not only is the
decline in U.S.-based travelers significant in relative terms but,
given that the population of the United States is roughly ten times
that of Canada, there is a significant disparity in absolute terms
as well. Five years ago, the numbers were roughly equal, with each
side sending approximately 35 million visitors across the border.

Visitors from the United States to Canada (one or more days;
thousands of travelers)

Visitors from Canada to the United States (one or more days;
thousands of travelers)

Reports are available at x2008000-eng.htm

andalso at pgm?Lang=E&SP_Action=Result&SP_ID=4007&SP_TYP =5&SP_Sort=1&SP_Portal=2

Why are U.S. visits declining?

4. (U) Many Canadians complain to U.S. officials that American
security requirements are the reason for fewer U.S. visitors to
Canada: however; the decline could be the result of several factors
including changes to border crossing requirements for travelers,
the effects of the economic recession, or changes to the exchange

-- Border Crossing

5. (U) On June 1, 2009, the Western Hemisphere Travel Initiative
went into effect requiring travelers at land borders to use a
passport or enhanced driver's license to enter the United States.
Both the air and land requirements also applied to U.S. residents
returning to the United States. There is anecdotal evidence that
the WHTI led to a downturn in cross-border land traffic in the
latter half of 2009. However when a similar requirement was
introduced for air travel in January 2007, visits to the US from
Canada actually increased in 2008. Similarly, monthly data
following June 2009 show an overall increase in land travel from
Canada to the U.S. despite the addition of passport requirements.

-- Recession

6. (U) The economic downturn combined with changes to the exchange
rate may offer a more plausible explanation for declining U.S.
visits to Canada and increased Canadian visits to the United
States. First, Canadians may have more money to spend on travel
since Canada has been less hard hit by the effects of the
recession. From December 2007 to October 2009, the U.S
unemployment rate has doubled from 4.9 percent to 10.2 percent.
During the same period, Canada's unemployment rate rose from 5.2
percent to 7.7 percent. Average economic growth in Canada declined
from 2.86 percent in 2006 to -2.9 percent in 2009, while in the
United States annual growth declined from 2.65 percent to -3.23
percent during the same period. While the magnitude of the decline
is about the same, the Canadian economy was relatively stronger at
the beginning of the recession.

-- Exchange Rate

7. (U) Since 2003, the Canadian dollar has been appreciating
relative to the US dollar. During the period from 2000 to the end
of 2004, the average exchange rate of the Canadian dollar was 69
cents U.S., but from 2005 to the end of 2009, the average exchange
rate has been 89 cents. The most dramatic period of appreciation
began in the summer of 2007 and between October 2007 and February
2008 the Canadian dollar hit and exceeded parity several times.
This was the first time the two currencies traded at par since
November 1976 and, throughout the autumn of 2007, the Canadian
media made frequent reports about large numbers of Canadians
heading south for cross-border shopping and more affordable
vacations. As of February 1, 2010, one Canadian dollar was worth 94
cents U.S.

Who goes south and who goes north?
--------------------------------------------- -

8. (U) Ranked according to number of individual trips, the top
five states visited by Canadians in 2008 were New York, Florida,
Washington, Michigan and California. However, for longer-term
vacations, Canadians spent more than 48 million visitor nights in
Florida, far surpassing second-place California (approx. 11 million
visitor nights). In total, Canadians enjoyed more than 144,000,000
visitor nights in the United States in the course of more than 43
million visits during 2008. On an annual basis, Canadians spent
the most money in Florida ($3 billion), California ($1 billion),
New York ($895 million) and Nevada ($871 million). In total,
Canadians spent nearly $12 billion on travel and tourism in the
United States in 2008. (Americans spent approximately $6.1 billion
in Canada.)

9. (U) According to Statistics Canada, sixty percent of U.S.-bound
Canadian travelers are over 45 years of age and they travel to the
United States twice as often by car than by plane. The average
traveler spends about 82 dollars per night on food, accommodation,
fuel and recreation, unless he/she is from Saskatchewan in which
case per night spending rises to $108. And, if a Canadian is lured
by the bright lights of Vegas, individual per night spending rises
to 176 dollars. (At $146 per night, Washington DC ranks second in
per night spending by Canadians.) The average length of stay by
Canadians in the United States is 5.6 nights.

10. (U) The majority of U.S. travelers to Canada are also aged 45
and over and more often travel by car. Their top three
destinations are Ontario, British Columbia, and Quebec. In total,
Americans spent more than 51,000,000 visitor nights in Canada the
course of more than 22 million visits during 2008.Although there
are fewer American travelers coming to Canada than the reverse,
average per person spending by Americans is higher at 122 dollars
per night. The highest per person spending is in Quebec at $145
per night and lowest is in the Atlantic provinces at $102 per

Economy, more than passports, influences traveler choices

--------------------------------------------- ----------------------

11. (SBU) Comment: Although there is not a definitive study of
why U.S. travel to Canada has declined, given the strong exchange
rate and recession statistics noted above, it is clearly simplistic
to focus all blame on increased security requirements -- especially
as they do not seem to have slowed Canadians heading to the United
States. End comment.


© Scoop Media

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