With ongoing tariff tensions between Canada and the U.S. under President Donald Trump, many Canadian travellers are looking south — but skipping American destinations in favour of Mexico, where a better exchange rate and budget-friendly resorts offer greater value for their travel dollars.
The Canadian dollar, which dipped as low as 68 cents U.S., has seen a modest rally since Trump’s April 2 “reciprocal tariffs” announcement did not add new levies against Canada. On Wednesday, the loonie was trading at nearly 71 cents U.S., bolstering confidence among international travellers.
At the same time, the Mexican peso is under pressure, presenting a timely opportunity for Canadians headed to destinations like Cancun, Puerto Vallarta, or Cabo San Lucas. As of Wednesday, one Canadian dollar equals about 14.4 Mexican pesos, offering considerable purchasing power for travellers.
“With the peso weakening and the loonie stabilizing, Canadians could get more bang for their buck in Mexico than in the U.S.,” said Quasar Elizundia, foreign exchange strategist at Pepperstone.
Meanwhile, tensions over U.S. tariffs on Canadian automobiles, aluminum, and steel continue to dampen enthusiasm for cross-border vacations. Airline fares are also a factor — Air Canada is offering one-way flights to Cancun from Toronto for as low as $270.
Louis-Philippe Roberge, marketing director at ICE Canada, recommends exchanging currency before departure to avoid ATM fees and unfavorable rates. He also advises travellers to avoid double currency conversion, such as exchanging CAD to USD and then to pesos, and to decline dynamic currency conversion at point-of-sale terminals.
“Plan ahead to avoid hidden costs that add up fast — like ATM withdrawal charges, credit card foreign transaction fees, or tourist-area markup,” said Roberge.
- U.S. dollars are accepted in most tourist areas of Mexico, but pesos are preferred for local markets, rural areas, and small vendors.
- Credit and debit cards often carry hidden fees, including 1–3% foreign transaction charges and additional interest if used for cash advances.
- Currency exchanges within Canada tend to offer more favorable rates than those in tourist areas or foreign airports.
With international travel rebounding and the global trade landscape in flux, Mexico stands out as a value destination for Canadians looking to escape the chill — and the chill in U.S.-Canada relations.