Industry Members Speak Out on Potential Tariff Impact

The Canadian travel industry is breathing a sigh of relief after the U.S. decided yesterday to postpone for 30 days the imposition of a 25% tariff on most goods imported from Canada.

The threatened tariff – and it may still happen – was expected to plunge the Canadian economy into chaos, with many economists suggesting the result could be a massive economic contraction and ensuing recession.

 “These tariffs are a direct threat to Canadian businesses and consumers,” said Wendy Paradis, president of the Association of Canadian Travel Agencies and Travel Advisors. “While travel agencies and travel advisors may not be directly targeted, the economic ripple effects will be unavoidable—higher costs, weaker consumer confidence, and reduced travel spending.”

Prior to the postponement decision, ACTA’s Paradis added: “We urge the U.S. government to immediately reverse these tariffs. If they persist, the Canadian government must step up with measures to support affected industries, including travel agencies and travel advisors, who will feel the impact of a weaker economy.”

Travel Market Report Canada reached out to several travel industry members for their thoughts on how a potential trade war could impact the industry.

“We are seeing Canadians reassess their travel plans,” said Anita Emilio, VP & GM for host agency Envoyage Canada. “When you add the impact of 25% tariffs to the weak Canadian weak dollar, it creates both financial and emotional barriers for many Canadians. We’ve heard from numerous advisors that clients are cancelling trips to the U.S. because of these challenges.”

Rocky Racco, Chief Executive Officer of host agency TTI Travel, is hopeful that the tariffs, if imposed, won’t be long-lasting.

“My current sentiment is that these tariff wars are going well beyond Canada and will impact most of the United States’ key trading partners and given the unpopularity even within the US I believe they will be short term in nature, specifically as in pertains to Canada.”

Racco says his advisors have seen a sharp reaction.

“Some clients have contacted their advisor to cancel their Alaska cruise even though its originating from a Canadian port. Some clients are asking if the ship is under U.S. registry and if so will consider booking an alternative ship.”

But Racco also stressed that many Canadians will still travel south of the border and he doesn’t expect them to experience anything but typical American hospitality.

“It seems most Americans view what is happening as a result of (President) Trump’s actions and aren’t showing any ill feelings towards Canada and Canadians. Remember almost 50% of Americans voted Democrat.” 

Racco says Canada will likely welcome more Americans thanks to the increase in USD buying power. For Canadian travellers, he says that in the short term we can still buy in CAD dollars at pre-fixed rates. He acknowledges that in the longer term a stronger USD will push prices up, but points out that historically, when there has been a substantial differential, companies have come forward with special Canadian dollar incentives as an offset.

Air Canada Vacations Vice President Nino Montagnese says it is too soon to determine what will happen if tariffs are eventually imposed. But he does see opportunity for the tour operation of an airline with a global network.

“I do think that with the challenge of tariffs there will be opportunities and that is what we at Air Canada Vacations are going to look for and focus on.”

Acknowledging that some Canadians are reluctant about U.S. travel at this time, Montagnese suggested that cruise lines consider adjusting their departure times to allow customers the ability to fly and cruise on the same day.

He also recommends early booking for those planning to travel just about anywhere over the next months: “Definitely book and pay now to lock in pricing,” Montagnese said. “It’s not likely prices will go down but hopefully they don’t go up!”

Emilio says that however the situation evolves, she is confident that Canadians will still find ways to pursue their travel dreams.

“What I’ve found is truly inspiring is the resilience and resourcefulness of Canadians. Many are adapting their plans — not by giving up on travel, but by shifting their mindset where they’re supporting Canadian, and exploring alternative destinations beyond the U.S. like Portugal, Anguilla, Japan, and Thailand.”

For her part, Paradis hopes common sense prevails.

 “The United States and Canada share one of the strongest trade relationships in the world. Punitive tariffs on a close ally like Canada are not just bad economics — they undermine decades of cooperation and mutual prosperity.”