Foreign traveller spending in Canada fell to $3.8 billion in the first quarter of 2009, the lowest level in five years, according to figures released Thursday by Statistics Canada.

The decrease represents a 4.3 per cent drop compared to the last quarter, and a 7.3 per cent drop compared to the first quarter of 2008.

But despite the drop, Canada's travel deficit — the amount by which Canadian travellers abroad outspent foreign visitors coming to this country — fell by 3.5 per cent to $2.9 billion compared to the October-to-December period. That's a 6.4 per cent year-over-year drop.

The decline in the deficit can be attributed to decreased spending by Canadian travellers abroad, which fell 3.5 per cent compared to the fourth quarter of 2008 to $6.8 billion.

U.S. traveller spending down

A decline in Canadian spending in the United States was particularly significant. Canadian citizens spent $3.6 billion in the United States, down 9.1 per cent compared to the last quarter of 2008, and a year-over-year drop of 12.1 per cent.

U.S. travellers spent $1.8 billion in Canada, down seven per cent from the previous quarter to the lowest level since 1997.

Fewer Americans are travelling to Canada. U.S. travellers made 2.2. million same-day car trips to Canada, down 1.8 per cent compared to the previous quarter, while overnight trips were down 3.4 per cent to 3.1 million trips.

The number of trips by travellers from the United States — hit particularly hard by recession — fell at a slower rate than the amount spent by Americans in Canada.

"This suggests that while fewer U.S. residents were travelling to Canada, they were also spending less on each trip," Statistic Canada said in a release.

Changes coming to U.S.-Canada border

The figures come just days before the U.S. imposes strict new conditions on those driving across the border into the United States from Canada.

As of June 1, a regular driver's licence and birth certificate will no longer be accepted. Both U.S. and Canadian citizens will have to present one of the following pieces of identification:

• A passport.
• A Nexus card.
• A FAST (Free and Secure Trade) card.
• An enhanced driver's licence or enhanced identification card (Only in B.C., Man., Ont. and Que.)

Business leaders in border towns have expressed concerns that the new rules may cause delays and hamper trade. Jayson Ahern, acting commissioner of the U.S. Customs and Border Protection agency, said Thursday customs officials would be "practical and flexible" when implementing the changes. He suggested the rules may be initially relaxed for those lacking proper identification.

Christopher Sand, a senior fellow at the Hudson Institute, a policy research organization in Washington, told Bloomberg news that under the new rules, truck drivers and business people will be "fine."

"Where you'll run into trouble are families on vacation" and others who don't make the trip often, he said.

Increased spending outside Canada and U.S.

Meanwhile, Canada's travel deficit with countries other than the United States rose to an all-time high of $2.1 billion, buoyed by an increase in Canadian spending. The increase comes despite a global economic recession and the depressed spending numbers by Canadians visiting the United States.

Spending by Canadian travellers increased 4.1 per cent compared to the previous quarter to $3.2 billion, even as Canadian overnight trips abroad decreased by 1.6 per cent.

The amount spent by travellers to Canada from countries other than the United States, meanwhile, fell to $2.1 billion, down 1.9 per cent.

Quarterly spending by foreign travellers in Canada has been fairly stable since mid-2004, hovering between $4 billion and $4.4 billion.