The Economics of Staying Home:
Why Vacationing in Canada Matters
In today’s email:
Happy Canada Day!
The CRA’s TFSA issue is resolved.
Shifting travel plans - why it’s so important to our economy
Where’s your favourite Canadian travel destination?
The major indices hit all time highs this past week!
Beyond the Portfolio
Happy Canada Day from the entire team at Cherry Hill!
As we turn the calendar to July and don our red and white, we have something extra to celebrate alongside the joy of being Canadian: the CRA has finally updated the TFSA contribution information!
We’ll be reaching out to everyone eligible for a TFSA top-up in the coming weeks. However, if you’ve been waiting to move funds into your TFSA, please don’t hesitate to get in touch — we’d be happy to help you make your contribution right away.
Canada Day has always held a special place in my heart.
In recent years, many Canadians have focused on our country’s imperfections. But with recent threats to our sovereignty, I’ve noticed more Canadians returning to celebrating the many things that make this country exceptional.
On Canada Day, I like to reflect on how fortunate we are to call this place home. For those of us born here, I think of the advantages we’ve had compared to so many around the world born into less fortunate circumstances. From coast to coast, I can’t think of a better place to be raising my son and calling home.
I hope you have a wonderful Canada Day! Feel free to send us a quick message about how you’re celebrating today or what makes Canada special to you.
The Scoop
Happy Canada Day! As Canadians gather to celebrate our country’s 158th birthday, many are also finalizing summer travel plans. But beyond the excitement of exploring new places, where we choose to spend our vacation dollars has a real impact — not just on our wallets, but on the health of our communities and the strength of our economy.
A Shift in Travel Habits
Recent years have seen more Canadians choosing to vacation at home rather than cross the border. The 2018 U.S. steel and aluminum tariffs were an early turning point, sparking a 5% decline in same-day trips to the U.S. as many Canadians opted to keep their spending domestic. This trend has continued: according to the latest 2025 data, Canadian trips to the U.S. are down 6.4% overall compared to 2024. Year-to-date figures show 7.3 million trips to the U.S. in the first five months of 2025, down from 7.8 million in the same period last year.
Kayaking on the French River, Ontario.
Several factors have contributed:
- High costs of U.S. accommodations and transportation relative to Canadian destinations.
- A weaker Canadian dollar, making U.S. travel more expensive.
- Ongoing geopolitical tensions and protectionist rhetoric south of the border, which have made some Canadians rethink cross-border travel.
These shifts have redirected billions of dollars back into Canadian communities, strengthening our own tourism sector.
How Domestic Travel Supports Canada
Choosing to vacation at home isn’t just convenient — it’s a powerful economic driver. According to Destination Canada, domestic tourism spending reached $83 billion in 2023, up over 15% from pre-pandemic 2019 levels. While inflation accounts for part of that rise, a major contributor is Canadians intentionally choosing to explore their own backyard.
Spring at Lake Louise, AB
Here’s where those dollars matter most:
- Niagara-on-the-Lake, ON — Welcomes over 3 million visitors a year, with tourism supporting 40% of local jobs across wineries, restaurants, shops, and accommodations.
- Tofino, BC — This west coast surf town’s population balloons from a few thousand to over 20,000 in summer, generating over $250 million annually in tourism spending.
- Banff & Lake Louise, AB — Attracts more than 4 million visitors each year, contributing $2 billion in direct spending that sustains countless small businesses.
- Cavendish, PEI — Home to the Anne of Green Gables attractions, businesses here often earn more than half their annual revenue in July and August alone.
Fall just outside of Quebec City, QC
Why It Matters for Our Economy
- Local Employment: In many tourist towns, summer income determines whether businesses can stay open year-round or even survive the winter.
- Regional Stability: Domestic tourism spending supports diverse economies, reducing reliance on volatile international markets.
- Resilience to Global Shocks: By keeping more travel dollars at home, Canada strengthens its ability to weather currency swings, geopolitical disputes, and changing international travel patterns.
The Bottom Line
Your decision to vacation in Canada isn’t just a personal choice — it’s an investment in our country’s communities. As Canadians, we have an unmatched opportunity to support local jobs, strengthen regional economies, and keep our dollars circulating within our borders.
As you plan your Canada Day weekend and summer travels, consider destinations where your spending can make a meaningful difference. From the vineyards of Niagara to the waves of Tofino and the peaks of Banff, our home and native land has endless experiences waiting — and your choice to stay helps keep them thriving.
Downtown Burlington, ON lit up for Christmas.
Market Minute
This past week, markets surged to fresh all-time highs as investors embraced a powerful summer rally driven by easing geopolitical tensions, falling oil prices, and renewed optimism about central bank rate cuts. The combination of de-escalating Middle East conflicts and strong technology sector performance propelled major indices to new records.
Canadian Markets:
The TSX gained 0.7% for the week, closing at 26,692 and reaching fresh all-time highs alongside its U.S. counterparts. The index benefited from three key drivers: easing geopolitical tensions that drove oil prices down sharply, continued signals from the Bank of Canada about potential further rate cuts, and broad-based sector strength. Energy sectors saw mixed performance as WTI crude oil fell dramatically by 11.8% to $65.14 per barrel, down from over $75 earlier in the month due to reduced Middle East tensions. Shopify continued its remarkable run, with the stock having climbed 85% over the past 52 weeks, significantly outperforming broader markets as investors maintained enthusiasm around e-commerce growth prospects.
U.S. Markets:
U.S. equities posted strong gains for the week, with the S&P 500 surging 3.4% to 6,173, marking its best weekly performance in months and pushing the index to a 5.0% year-to-date gain. The Nasdaq demonstrated resilience in technology stocks, while the broader market benefited from optimism around AI opportunities and mega-cap technology leadership. The Dow Jones participated in the rally, reflecting renewed confidence across cyclicals and industrials as trade tensions appeared to ease. Technology and growth sectors led the charge, with communication services and consumer discretionary posting gains well beyond the broader market average. The Federal Reserve’s continued signaling of potential rate cuts, with two cuts projected for 2025, provided additional support for equity valuations.
Global Markets:
European markets showed mixed performance, with the STOXX Europe 600 declining 0.4% as investors assessed the impact of U.S. tariff policies on major trading partners. Trade negotiations between the U.S. and EU continued to make progress, though uncertainty remained around the July 9 deadline for potential reciprocal tariffs. Asian markets were mixed: Japan’s Nikkei rose 1.3% to around 40,100, breaking above the psychologically important 40,000 level for the first time since January, supported by trade deal optimism and a weaker yen benefiting exporters. Chinese equities showed modest gains with the Shanghai Composite up 0.39%, though concerns about sluggish post-pandemic recovery persisted.
Trends to Watch This Week:
As we head into the second half of 2025, the following developments are on our radar:
- U.S. Employment Report: Friday’s nonfarm payrolls data for June will be closely watched after May’s 139,000 gain, with investors seeking clues about labor market health and Federal Reserve rate cut timing.
- Central Bank Speeches: Federal Reserve Chair Jerome Powell is scheduled to speak at a European Central Bank forum in Portugal, alongside other major central bank governors, potentially providing insights into future monetary policy direction.
- Canadian Economic Data: Key releases include the Labour Force Survey on July 11 and other economic indicators that will shed light on how the Bank of Canada’s recent rate cuts are impacting economic activity.
Summary:
Markets exhibited strong momentum this past week, with major indices reaching fresh all-time highs as multiple positive catalysts aligned. The sharp decline in oil prices due to easing Middle East tensions, combined with continued central bank dovishness and technology sector strength, created an environment conducive to risk-taking. However, ongoing trade negotiations and upcoming economic data releases will be critical in determining whether this rally can be sustained in the weeks ahead.
Final Thought
Have a wonderful Canada Day and take a minute to celebrate what makes this nation of ours so wonderful. We’d love to know what makes Canada special to you - send us a quick note, we’d love to hear from you!
Our office is closed today, but we’re back to regular hours tomorrow.
Until next time, stay informed and strategically invested!
Trevor