# Canada’s Tourism Sector Shows Strong Growth in Q3 2025
Canada’s vibrant tourism industry experienced a robust third quarter in 2025, demonstrating significant growth in both spending and economic contribution. Fresh data reveals that the sector not only continued its upward trajectory but also outpaced the broader national economy in several key areas. This period saw increased activity from both domestic travellers and international visitors, bolstering the industry’s overall performance and job market.
## Unpacking the Economic Performance
During the third quarter of 2025, total tourism spending in Canada reached an impressive **$26.7 billion**, marking a 0.7% increase from the previous quarter. This surge was a significant contributor to the nation’s economic health. Tourism Gross Domestic Product (GDP), adjusted for inflation, expanded by 0.9% – a rate that matched the second quarter and notably surpassed the economy-wide real GDP growth of 0.5%.
Here’s a snapshot of the key financial indicators:
* **Total Tourism Spending:** $26.7 billion (up 0.7% quarterly)
* **Domestic Tourism Spending:** $20.8 billion (up 0.5%)
* **International Tourism Spending:** $6.0 billion (up 1.2%)
* **Tourism’s Share of Nominal GDP:** Stood firm at 1.70%.
The growth in tourism GDP was primarily fueled by strong performances in the accommodation and transportation sectors, both of which saw a 1.2% increase in activity. Food and beverage services, along with other related industries, also contributed positively to this expansion.
## A Tale of Two Travellers: Domestic vs. International Spending
The third quarter painted an interesting picture of how Canadians and international visitors contributed to the tourism boom.
### Domestic Contributions
Canadian residents continued to explore their own country, with domestic tourism spending rising by 0.5%. While this marked a slight slowdown from the 2.9% increase in the second quarter, specific areas saw notable gains:
* **Accommodation Services:** Increased by 1.6%.
* **Pre-trip Expenditures:** Saw a substantial 4.4% rise.
* **Vehicle Rental:** Experienced a significant jump of 11.3%.
* **Passenger Rail Transport:** Grew by 3.9%, likely boosted by initiatives like the “Canada Strong pass.”
However, not all segments thrived equally. Spending on passenger air transport by Canadians decreased by 1.6%, partially attributed to ongoing trade tensions and disruptions like flight attendant strikes.
### International Influx
After a dip in the previous quarter, tourism spending by international visitors rebounded with a 1.2% increase. This positive shift was broadly distributed across various tourism products:
* **Vehicle Rental:** Led the way with a 5.1% increase.
* **Vehicle Repair:** Saw a 2.6% growth.
* **Travel Services:** Also increased by 2.6%.
* **Accommodation:** Recovered with a 1.0% rise, contrasting a previous decline.
Despite the gains, the international visitors’ share of total tourism spending in Canada remained largely stable at 22.3%. Consumer surveys indicate a clear trend: a significant portion of Canadians planned to spend more on domestic vacations while reducing their spending on trips to the United States.
## Tourism’s Impact on the Job Market
Beyond economic output, the tourism sector continued to be a vital source of employment. The number of jobs directly linked to tourism increased by 0.6% in the third quarter of 2025, mirroring the pace set in the second quarter. This growth stood in stark contrast to the economy-wide trend, which saw a 0.3% decline in jobs during the same period.
Key job growth areas included:
* Food and beverage services (+0.5%)
* Accommodation (+0.7%)
* Non-tourism industries that benefit from tourism (+0.7%)
Tourism’s share of all jobs in the economy slightly edged up to 3.36%, highlighting its growing importance as an employer.
## Looking Ahead
While the third quarter painted a strong picture, preliminary data for October and November 2025 suggests a more mixed outlook. The number of Canadian travellers returning to Canada by land and air showed declines compared to the previous year. Similarly, non-resident arrivals saw an increase in October, primarily due to air travel, but then decreased across both air and land travel in November.
Overall, the third quarter of 2025 underscored the resilience and significant economic contribution of Canada’s tourism sector, driven by healthy domestic engagement and a recovering international market. While future trends will need careful monitoring, the industry remains a powerhouse for national growth and employment.