The U.S. National Hurricane Center says Arthur became a hurricane early Thursday, with maximum sustained winds of about 120 kilometres an hour.
Canadian forecasters say a trough of low pressure will move eastward from the Great Lakes and guide the storm towards Atlantic Canada.
"The nature of the trough approaching from the Great Lakes will make all the difference in Arthur's intensity, track and structure as it moves toward our region," the hurricane centre says in its latest Thursday morning statement.
The centre says the storm’s projected track has been moved slightly to the west.
It says Nova Scotia will likely experience the highest winds, while New Brunswick and P.E.I. could see the heaviest rainfall.
The forecaster says anywhere from 50 to 100 millimetres could fall.
In the United States, Arthur threatened to give North Carolina a glancing blow on Friday, prompting thousands of vacationers and residents celebrating Independence Day to leave parts of the state's popular but flood-prone Outer Banks.
Forecasters expect Arthur to whip past the Outer Banks — a 320-kilometre string of narrow barrier islands with about 57,000 permanent residents — on Friday without making landfall but still bringing rain, heavy winds, storm surge and dangerous rip tides.
Before the storm hit, tourism officials had expected 250,000 people to travel to the Outer Banks for the holiday weekend. Gov. Pat McCrory warned people not to risk their safety by trying to salvage their picnics, barbecues and pre-paid beach cottage vacations.
"Don't put your stupid hat on," McCrory said.
The National Hurricane Center predicted Arthur would swipe the North Carolina coast early Friday and then be off the coast of New England later in the day, eventually making landfall in the Maritime provinces as a tropical storm.
Much of the North Carolina coast was under a hurricane warning.
Tropical storm warnings were in effect for coastal areas in South Carolina and Virginia. On the Outer Banks' Ocracoke Island, accessible only by ferry, a voluntary evacuation was underway. The mandatory evacuation for Hatteras Island residents and visitors began at 5 a.m.
Farther north, the annual Boston Pops Fourth of July concert and fireworks show was moved up a day because of potential heavy rain ahead of hurricane Arthur. Organizers and public safety officials said the celebration was rescheduled for Thursday, which appeared to be the best of two potential bad weather days.