CANADA. In response to the deepening crisis for border duty-free retail, Canadian mayors in affected communities have urged the federal government to step in with financial support for businesses hit by continuing political and economic tensions with the USA.
The appeal comes amid sustained pressure on Canada’s duty-free sector, which has been heavily affected by the US-Canada travel downturn.
On its social media page, the Frontier Duty Free Association (FDFA), which represents 32 stores across the country, announced the signing of an urgent open letter calling on the federal government to protect Canada’s land border duty-free stores. Many local, family-run businesses are facing closure within weeks, the association noted.
Addressed to Prime Minister Mark Carney and Finance Minister François-Philippe Champagne, the letter calls on the government to immediately acknowledge the urgent crisis unfolding in border communities, described as “a crisis that could compel long-standing small businesses to close within weeks”.
The letter states: “At the centre of this crisis are Canada’s land border duty-free stores. These are not big-box outlets or multinational franchises. They are small, independent, Canadian-owned export businesses that employ local residents, support local tourism, and keep Canadian dollars in Canada. They have operated for decades, and today, a number are telling us they may not survive to the summer.”
The letter highlights worsening US-Canada tensions, noting that the call for Canadians to avoid travel to the USA, though well-intentioned, has led to “catastrophic” impacts on border communities, where retailers have seen business drop by at least -60%.
It further emphasised that the effects go well beyond the stores – resulting in job losses, supply chain disruptions and decline in municipal revenues, noting that delayed intervention risks are making the damage irreversible.
The mayors are urgently calling for practical, revenue-neutral measures that the government can implement immediately to save these businesses. Their key requests include:
- Providing immediate liquidity support through EDC, BDC and CSBFP programmes specifically designed for export-dependent small businesses.
- Issuing a Ministerial directive reaffirming the export status of land border duty-free stores across all departments, removing regulatory ambiguity.
- Aligning excise tax policy with local export status to level the playing field with US competitors and improve long-term competitiveness.
A CBC report cited FDFA Executive Director Barbara Barrett’s call for swift federal action during Tuesday’s (3 June) press briefing, noting that these communities cannot afford to lose such businesses, underscoring the urgency of the letter and the call for government intervention before the damage becomes permanent.
FDFA President Tania Lee also said that several stores are experiencing revenue losses of up to -80%. She said that if the situation does not improve, a third of duty-free stores may close. ✈
