A forthcoming report from the Canadian Council for Chief Executives calls the visa, imposed in 2009 to curb bogus asylum claims, an impediment to reinvigorating the Canada-Mexico relationship.
The report, by trade policy expert Laura Dawson, says until Ottawa can fix its own immigration system, it should simply allow Mexicans with a valid U.S. visa into Canada.
The report by one of Canada's most influential business groups will be made public exactly one week before Prime Minister Stephen Harper begins a bilateral visit with President Enrique Pena Nieto in Mexico City.
One day after their meeting, Harper and Pena Nieto will be joined by U.S. President Barack Obama.
Ambassador says Mexico 'really mad' at Canada
The Canadian Press obtained the report, to be released Tuesday, which says that spending by Mexican tourists in Canada has fallen to $200 million in 2012 from $365 million in 2008.
It also notes how the Mexican ambassador to Canada, Francisco Suarez, said in an interview last year that his country is "really mad" at Canada for not being able to resolve the visa issue.
The council's president, John Manley, echoed Suarez's earlier call for Ottawa to set a firm timetable for the lifting of "the onerous visa requirement."
Dawson's report also corroborates the anger that Suarez repeatedly expressed in last fall's interview.
"Many Mexicans believe that the Harper government gave them the false impression that the visa would be removed once Canada revised its refugee determination process," it says.
"Mexico and Canada are unlikely to be able to reinvigorate their diplomatic and investment relationships until the visa is modified or removed."
The report acknowledges that both countries recognize the importance of screening visitors for security threats.
'Insult to Mexican leaders'
"Nevertheless, Canada's imposition of a complex and intrusive 'temporary' visa that has lasted for more than five years is perceived as an insult to Mexican leaders and has chilled relations with Canada," the report states.
Canada has imposed the most stringent visa requirements of any country for Mexican travellers, including probing questions about their family and financial histories, it says.
"Says one Mexican businessman who has cut off all travel to Canada: 'How do I know that the bank statement I give Canada won't find its way into the hands of thieves or extortionists who might threaten my family?"'
The Mexican visa was imposed in 2009 along with a similar one for Czech Republic travellers.
The government identified both countries as being sources of increasing numbers of bogus refugee claimants.
Harper himself has said he would like to see the Mexican visa lifted, but says Canada must fix its flawed immigration system before that can happen.
Dawson's report questions why Ottawa has not lifted the visa, especially after lifting the Czech visa last year.
Her report also points out that the Mexican visa remains in place despite the fact Ottawa added Mexico to its "safe countries" list one year ago this week. The list is comprised of almost three dozen countries that Canada no longer considers to be a genuine source of refugees.
'Virtually impossible' to arrange trip short notice
"Canada has paid a high price for the visa in terms of reputation and lost revenue from tourists, students and investors," Dawson writes.
"Canadian airlines have had to eliminate or reduce planned routes and it is virtually impossible for a Mexican to arrange to travel to Canada on short notice, whether for business purposes or to take advantage of Canada's competitive air fares to Asia."
The visa issue is addressed in a broader report on how Canada and Mexico can deepen economic relations 20 years after signing the North American Free Trade Agreement.
Dawson outlines six priorities for policy action, and the top one is dealing with the visa, either "removing or fundamentally reforming" the process.
She recommends Canada adopt something similar the online screening program that the U.S. currently uses.
The U.S. Electronic System for Travel Authorization (ESTA) provides almost immediate travel permission, the report states, after travellers submit basic personal, passport and security information through the Internet.
"Until Canada is able to implement an ESTA-like system of its own, it should allow Mexicans who hold a valid U.S. visa to enter Canada," the report states.
Alexis Pavlich, the spokeswoman for Immigration Minister Chris Alexander, said Monday that Canada is still working on resolving the issue but hasn't found a solution.
In addition to dealing with the visa irritant, Dawson's report also recommends better three-way co-operation between Canada, Mexico and the United States on border issues, regulatory co-operation, and in the Trans-Pacific Partnership trade negotiations.
It also calls for enhanced co-operation between Canada and Mexico in the energy and mining sectors.