Will our Canadian neighbors join us this Winter?
The answer, at least in part, depends on whether travel restrictions into the US from Canada (due to Covid-19) will be lifted. Although all of America’s sunbelt states’ economies have been negatively affected due to those restrictions, none have felt the impact more than Florida, simply because Florida is the most visited state for Canadian visitors escaping to warmer climates during the winter months.
Another aspect of this is whether the Canadians will feel comfortable enough when those restrictions are lifted. When people feel danger lurks, they often tend to hunker down until they feel safe about travel for an extended period to a place which is not their primary home.
Much of this depends upon whether the Covid numbers significantly decline in the coming weeks and months in the Sunshine State. As Stacy Ritter, CEO of the Greater Fort Lauderdale Visitors Bureau, says, “Until the border re-opens, it’s clearly going to have a less-than-positive impact on tourism from Canada.”
As of now, Florida has 655,000 cases of Covid which is five times more than the entire country of Canada. Because of numbers like this, Canadian Prime Minister Trudeau continues to ban travel from Canada into the U.S. Each month, Trudeau looks at the American stats concerning Covid and then decides whether to lift the travel ban.
For Florida, tamping down the Covid rate is very important for the state’s economy. These winter visitors boost the economy through spending and sales tax collection (Canadians visitors provided about 500 million dollars in sales tax collection yearly). Additionally, Canadian investors have brought about 500 companies from Canada to Florida by 2017. These businesses are important to the state’s Gross Domestic Product (GDP). Additionally, these companies provide thousands of jobs to Floridians - about 43,000, in total.
Also, When Canadians purchase homes and pay the transfer tax, those taxes are added to Florida’s state treasury which serves to boost the state’s economy. In total, Canadians own an impressive 53 billion in Florida real estate property.
Alain Forget, who Heads business development for RBC Bank of Canada said that he is still hearing from Canadians interested in Florida properties. But their viewing of prospective homes is being done virtually from their Canadian residences. So, it seems these Canadians are still interested in Florida purchases but may be waiting for the restrictions to be lifted before they are comfortable enough to pull the trigger and buy. After all, Canadians were the top foreign buyers in Florida between April 2019 and March 2020. But as of now the deal volume is far below pre-pandemic levels. The ripple effect impacts multiple aspects of the economy including real estate lawyers who report a slower business climate due to the lack of Canadian buyers, as well as retail and restaurants who will serve less customers.
Another aspect impacting the Canadians is travel health insurance which has become very expensive due to the Covid outbreak. Also, the Canadian government is advising its citizens to avoid traveling abroad due to the pandemic. If they do leave the country (as of now), the Canadians will be required to quarantine for 2 weeks upon returning home due to the pandemic.
And as of this writing Forbes is reporting that the Canadian government is extending the travel ban to the US until October 21st.
With all this being said, Canadians can still legally board a plane and fly to Florida, but for the reasons outlined above, many are not yet ready.
The question remains: Will the biting cold of the Canadian winter drive many to throw caution to the wind (excuse the pun) and once again return to sunny Florida?
*Although this news is troubling for Florida real estate, the next article in this month’s newsletter offers a different, more optimistic picture for Florida’s real estate market.