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Canadians Flock to the U.S. in Record Numbers

By Tavia Grant, Globe and Mail Update

Canadians are taking advantage of a strong currency and solid economic conditions at home to flock south of the border, setting a record for air travel to the U.S. in August.

Overnight travel by Canadian residents to the United States rose 4.2 per cent to almost 1.5 million in August from July, Statistics Canada said Thursday. Overnight stays by car jumped a whopping 14.1 per cent between August of this year and last, while plane trips are up 7.9 per cent.

	Overnight travel by Canadian residents to the United States rose 4.2 per cent to almost 1.5 million in August from July, Statistics Canada said Thursday. (The Globe and Mail)

Canadians buying their cars, bubble bath and even vacation homes in the U.S. spell bad tidings for the domestic economy. About 55 per cent of the country's gross domestic product stems from consumer spending, which has been the main engine of growth in recent years.

Overnight travel by Canadian residents to the United States rose 4.2 per cent to almost 1.5 million in August from July, Statistics Canada said Thursday

"There appears to be a tremendous cost advantage to shop in the U.S.," said Sal Guatieri, a senior economist with BMO Nesbitt Burns Inc. "It will persist until either the Canadian dollar comes down or Canadian income growth weakens significantly."

This week, BMO deputy economist Douglas Porter estimated the gap in prices between the U.S. and Canada now stands at about 26 per cent.

Canadians are travelling in record numbers elsewhere too. Overnight visits hit a record 2.1 million in August, which includes an unprecedented 609,000 trips to overseas countries.

It's the sixth month this year that the number of trips overseas by Canadians passed the 600,000 mark, Statscan said.

Before this year, the 600,000-mark had never been reached.

Foreign visitors packed their bags for Canada too. Overall travel from abroad rose 2.4 per cent from July, as U.S. and overseas travellers took nearly 2.6 million trips to Canada in August. U.S. visits rebounded 2.8 per cent in the month after broad declines in July.

Travel from Mexico posted the largest gain in the month, at 5.8 per cent, while travel from China recorded the largest drop, falling 3.4 per cent.

Over the past year, Canada has seen double-digit growth in visitors from Mexico, South Korea and Hong Kong. Travel from Japan, however, is declining.