American visits to Canada hit 36-year low

Passport confusion, a weak US dollar, and high gas prices appear to be fueling the steady decline.

The summer tourism season has arrived in Old Montreal, but the tourists have not.

The streets, restaurants, and boutiques of this picturesque 18th-century neighborhood are usually crowded with Americans on holiday. But this year, they're eerily quiet, and area businesspeople say this could be the worst year yet for an industry that's taken a beating since 2001.

"Each year there's been a challenge: We had 9/11 and the SARS outbreak, the exchange rate, and high gas prices," says Gisele Beauvais Olivier as she arranges Quebecois ceramics in her boutique on Rue St Paul. "Americans are very good customers who appreciate handicrafts, but they are not here as usual."

It's a situation being played out across Canada, where visits by Americans have been plummeting for years. In March, the last month for which official statistics have been released, visits by Americans fell to their lowest level since record keeping began 36 years ago. Data released June 28 showed foreign tourist spending in the first quarter fell to the lowest level since 1999, and that the number of US visitors has fallen by nearly a third since 2003.

"Canada's tourism sector is on the brink of crisis," says Randy Williams, president of the Tourism Industry Association of Canada in Ottawa. "We've been facing a lot of external challenges, and each time one gets dealt with, another one comes along."

Mr. Williams's organization describes a "perfect storm of adverse conditions" in a country where nearly 90 percent of the tourist trade is American: sky-high gasoline prices, confusion about new US customs and passport requirements, border crossing delays, and the US dollar's 30 percent fall against its Canadian counterpart over the past two years.

Among the hardest hit are communities and businesses that rely on short-term, drive-in tourists. In March, Americans made only 730,000 same-day car trips, down 2.5 percent from February and 68.3 percent from 2001.

"The season has gotten off to a slow start," says Pauline Alexander, who works at the Roosevelt Campobello International Park, one mile beyond the bridge linking Campobello Island, New Brunswick, with Lubec, Maine. Annual visits to the park's centerpiece – Franklin D. Roosevelt's summer home – have fallen by a third since 2001. "It's been really hard for people on the island," she says.

The Stratford Shakespeare Festival in Ontario has also seen its US clientele wither, with ticket orders off by 10 to 12 percent compared with 2007. "Until this year, we've been somewhat protected from the downturn. But now we've seen the most significant drop," says the theater company's media manager, Ann Swerdfager. "There's the weak dollar, high gas prices, and a lot of confusion about what kind of documents are required to get back into the US."

US Customs and Border Protection now requires US citizens to have a passport to re-enter the US by air, a requirement originally slated to extend to land and sea border entry points on Jan. 1. Those requirements have been postponed to sometime next year, but US citizens still need both a driver's license or other government-issued photo ID, and government issued proof of citizenship, such as a birth certificate.

Ms. Swerdfager says she regularly fields phone calls from US patrons unsure of the border requirements. The festival is also trying to woo back Americans with a series of discounted ticket packages.

Last week, Nova Scotia announced it is providing an emergency $4.4 million subsidy to the company that provides high-speed ferry service connecting Portland and Bar Harbor, Maine, with Yarmouth, Nova Scotia. Nova Scotia Premier Rodney MacDonald told the Associated Press that the ferry would otherwise have ceased operating due to sky-high fuel costs and shrinking ridership.

This year is the quietest in recent memory on Montreal's Old Port waterfront, according to Sarah Cuillerier of Amphi-Bus Tours, as she tends the company's open-air kiosk. "Usually we'd be seeing lots more people in the port by this time of the year, but now it's really, really quiet," she says. "We still see the same number of Europeans, but far less Americans."

Provinces and attractions farther from the border have seen less of a drop. Industry experts in Yukon and Prince Edward Island report a steady start to the season. "The season is actually looking good so far," says Sean Hennessey of the University of Prince Edward Island's Tourism Research Centre, who notes that Americans represent only 10 percent of the province's tourists. "The majority of our market is repeat visitors and a lot of the Americans are cottage-renters and quite loyal."

The Tourism Industry Association of Canada is urging federal authorities in both countries to reduce border delays through enhanced staffing and other investments. "If we want to meet our tourism potential, we have to be sure we're efficiently transferring people through the border," says Mr. Williams, who also notes that since 9/11, Canada has lost ground to Britain and Spain, both of which have been targets of terrorist attacks.

But Ms. Olivier – who has operated her Montreal boutique, Les Artisans de Meuble Québécois, for 40 years – expects things will turn around. "I've seen the ups and downs over the years, so I'm not too worried," she says.