CANADA'S TRAVEL DEFICIT HITS HIGHEST LEVEL IN 15 YEARS

Increased spending by Canadians abroad has pushed Canada's international travel deficit to its highest level ever in the third quarter, edging out the previous high observed nearly 15 years ago, according to Statistics Canada.

The deficit (the difference between spending by Canadian residents abroad and spending by foreigners in Canada) climbed to a record $1.9 billion between July and September. This was up $278 million from the second quarter and slightly above the previous high set in the fourth quarter of 1991. At that time, the ballooning deficit with the United States had been the main reason for the record deficit. Now, say officials, widening deficits with both the United States and overseas countries are contributing factors.

Record spending abroad contributed to the unmatched deficit, as Canadians spent an estimated $5.9 billion outside the country, up 2.9 per cent from the previous quarter. Spending abroad has shown an upward trend in recent years, with increases in 11 of the last 13 quarters. Moreover, foreign travel spending in Canada has fallen in six of the last seven quarters, also fuelling the widening deficit. During the third quarter of 2006, foreigners spent $4 billion in Canada, down 2.6 per cent from the previous quarter.

Canada's travel deficit with the US climbed to $1.1 billion during the third quarter of 2006, a $225 million increase from the second quarter and the highest level since the fourth quarter of 1993.

While spending in Canada by travellers from overseas countries climbed to unprecedented levels in the third quarter of 2006, reaching $1.9 billion, Canada's travel deficit with overseas countries climbed to an all-time high of $753 million, up $53 million from the previous quarter.

Record travel from Canada to overseas destinations contributed to the higher deficit, as Canadians took 1.7 million trips to non-US destinations, up 0.5 per cent from the previous quarter. As a result, Canadians spent a record of $2.7 billion, an increase of 3.3 per cent from the previous high set in the second quarter.