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American visits to Canada hit 36-year low

Passport confusion, a weak US dollar, and high gas prices appear to be fueling the steady decline.

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US Customs and Border Protection now requires US citizens to have a passport to re-enter the US by air, a requirement originally slated to extend to land and sea border entry points on Jan. 1. Those requirements have been postponed to sometime next year, but US citizens still need both a driver's license or other government-issued photo ID, and government issued proof of citizenship, such as a birth certificate.

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Ms. Swerdfager says she regularly fields phone calls from US patrons unsure of the border requirements. The festival is also trying to woo back Americans with a series of discounted ticket packages.

Last week, Nova Scotia announced it is providing an emergency $4.4 million subsidy to the company that provides high-speed ferry service connecting Portland and Bar Harbor, Maine, with Yarmouth, Nova Scotia. Nova Scotia Premier Rodney MacDonald told the Associated Press that the ferry would otherwise have ceased operating due to sky-high fuel costs and shrinking ridership.

This year is the quietest in recent memory on Montreal's Old Port waterfront, according to Sarah Cuillerier of Amphi-Bus Tours, as she tends the company's open-air kiosk. "Usually we'd be seeing lots more people in the port by this time of the year, but now it's really, really quiet," she says. "We still see the same number of Europeans, but far less Americans."

Provinces and attractions farther from the border have seen less of a drop. Industry experts in Yukon and Prince Edward Island report a steady start to the season. "The season is actually looking good so far," says Sean Hennessey of the University of Prince Edward Island's Tourism Research Centre, who notes that Americans represent only 10 percent of the province's tourists. "The majority of our market is repeat visitors and a lot of the Americans are cottage-renters and quite loyal."

The Tourism Industry Association of Canada is urging federal authorities in both countries to reduce border delays through enhanced staffing and other investments. "If we want to meet our tourism potential, we have to be sure we're efficiently transferring people through the border," says Mr. Williams, who also notes that since 9/11, Canada has lost ground to Britain and Spain, both of which have been targets of terrorist attacks.

But Ms. Olivier – who has operated her Montreal boutique, Les Artisans de Meuble Québécois, for 40 years – expects things will turn around. "I've seen the ups and downs over the years, so I'm not too worried," she says.