Relations between the United States and Canada have become strained following the imposition of tariffs by President Donald Trump on Canadian goods. The US was previously a popular destination for Canadian travelers, but recent developments have led many to opt for domestic travel instead. However, high domestic airfares in Canada pose a challenge.
On February 1st, the White House announced that “Trump is implementing a 25% additional tariff on imports from Canada.” The President cited “Canada’s heightened domestic production of fentanyl, and its growing footprint within international narcotics distribution” as reasons for the tariffs, which also affect Mexico and China. Some goods received partial exemptions; for example, tariffs on Canadian resources are 10% lower due to “encounters at the northern border with Canada” involving alleged illegal immigrants. On February 11th, another statement noted that 25% tariffs would be applied to aluminum and steel to protect the US sector.
In response to these tensions, many Canadians are reconsidering their travel plans. According to Leger, 48% of Canadians are less likely to visit the US than last year, while only 10% plan more trips south. This trend is most noticeable among those aged 55 and above.
With international travel less appealing, 61% of Canadians are looking at domestic trips. Canada offers diverse tourist attractions comparable in distance to US destinations or short-haul European flights. Despite this interest, Canadian airfares remain high due to factors like government policy. Jim Scott explained that without subsidies for aviation in Canada, costs fall on passengers.
Skyscanner reports that average internal airfare in Canada costs C$262 (US$185), compared to US$162 in the US. Although last-minute deals exist for US flights as low as C$159 (US$112), high domestic prices may deter travelers unless fares decrease.
This issue predates current tensions; according to the Fraser Institute last year, factors such as restricted competition and heavy regulations contribute to Canada’s high ticket prices for internal flights. They concluded that “policy reform for air travel is overdue.”
