Profits in Canada’s tourism industry will decline in 2007 and 2008 partly because the Western Hemisphere Travel Initiative (WHTI) will further reduce the number of Americans coming north, says the Conference Board of Canada in a new report.

“Buoyed by strong domestic travel and more visitors from countries other than the United States, the industry achieved record profits of $1.1 billion in 2005 and is forecast to do even better this year,” says Louis Thériault, director, industrial –outlook. “But a strong Canadian dollar and high energy prices drove the number of U.S. visitors to a 13-year low last fall. When the WHTI is fully implemented in 2008, U.S. travel to Canada will absorb an additional blow.”

The WHTI — which will require all travelers entering or re-entering the United States to carry secure documentation, such as a passport — will increase costs and inconvenience for same-day U.S. visitors. Recreation and entertainment operators, which depend heavily on overnight and same-day American travelers, will feel the largest impact, the Conference Board says.

Industry profits will fall from $1.5 billion in 2006 in each of the next two years, to $1.4 billion in 2007 and $1.3 billion in 2008, respectively.

Profit growth will rebound toward the end of the decade, as the industry adapts to the impact of the WHTI, visitors from new markets such as China continue to increase, and the 2010 Winter Olympics approach.