Thursday, July 3, 2025

As the approach to the Canadian landscape spreads out with the onset of the summer months, a larger proportion of Canadians are choosing the beauty closer to home rather than traveling overseas. Despite rising inflation and the continued economic doubts, most homes are determined that they will journey. A recent BMO Real Financial Progress Index survey shows that 77% of the Canadians will journey this summer and spend an average sum of $3,825 — buying flights, hotels, petrol, restaurants, and other travel needs. They are relying

A key takeaway from the survey is that 59% of travelers are intentionally staying within Canada to reduce expenses. This shift to domestic travel is mirrored by official numbers from Statistics Canada, which reports a 0.8% increase in domestic tourism spending in Q1 of 2025. In contrast, international tourism spending by Canadians fell by 2.6% during the same period.

The government’s Tourism Satellite Account further confirms this trend, noting that overall tourism spending in Q1 2025 held steady at C$26.3 billion, with C$20.2 billion of that coming from domestic travelers. Additionally, the number of tourism-related jobs climbed slightly to 707,400, and the tourism sector maintained a steady 1.74% share of Canada’s GDP.

For many, the decision to stay local is driven not just by rising travel costs, but also by emotional and cultural priorities. About 62% of Canadians said they plan to spend the same amount or more on summer vacations compared to last year. Yet this ambition comes with financial compromise — 55% have had to modify their plans due to inflation, 46% have cut back spending in other areas to afford their trips, and 32% admitted to dipping into long-term savings to cover vacation costs.

Events like weddings and graduations are also impacting budgets. The BMO report highlights that 34% of Canadians expect to spend the same or more on weddings this summer compared to last year, even though 54% have no wedding expenses planned. Similarly, 39% say they’ll spend the same or more on events like graduations and baby showers, while 48% will avoid such expenditures altogether.

Spending on home improvements is also heating up, with 42% of respondents planning to spend as much or more on renovations this summer, despite 44% indicating they won’t take on any renovation projects. When it comes to major purchases like cars, boats, or homes, nearly a third (30%) are budgeting the same or more as in 2024 — but the majority (57%) plan to steer clear of big-ticket items this season.

At the same time, Canadians’ enthusiasm for cross-border travel, particularly to the United States, is cooling dramatically. According to Statistics, Canada’s international travel reports, same-day car trips to the U.S. dropped by 38% in May 2025 compared to the previous year, and air returns fell by 24%. This decline is due in part to ongoing trade tensions, rising border anxieties, and a weakening Canadian dollar.

Public sentiment also plays a significant role. A recent Abacus Data poll found that unfavorable views of the U.S. among Canadians have risen from 46% in 2024 to 64% in 2025, with 40% strongly disapproving of American policies. Platforms like Business Insider and the Wall Street Journal report a significant drop in U.S. Airbnb bookings and summer flight reservations by Canadians — declines of over 12% and 70% respectively.

To manage the costs of vacations and everyday living, many Canadians are turning to loyalty programs like AIR MILES. According to the BMO survey, 52% of Canadians plan to use points for groceries, 25% for vacations, 18% for entertainment, and smaller percentages for bills and special events. A growing trend is emerging where 61% of Canadians now prioritize spending on experiences over material goods — reflecting a shift in financial values amid uncertain times.

Experts at BMO encourage Canadians to balance enjoyment with careful planning. They recommend building detailed budgets, reviewing monthly spending, redeeming loyalty rewards, cutting unnecessary subscriptions, and automating savings. Tools like BMO SmartProgress, CreditView, and the Savings Amplifier Account are designed to help users manage their finances with AI-powered insights and personalized goals.

The bank’s economists suggest this year’s spending patterns are influenced by both financial and emotional considerations. While Canadian consumer confidence remains subdued, improving market conditions and de-escalation of the U.S. trade war are providing a slight boost to consumer morale. These factors, along with the social and emotional value of travel, contribute to the continued demand for vacations despite economic headwinds.

In a year that experienced inflation and budget tightened belts, Canadians are proving there is still time for adventure, connection, and glee. A coast-to-coast road trip, a weekend at the lake, or a home party are just a few examples — the message is out that Canadians are able to live meaningfully by the dollar.

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