CANADA. The Frontier Duty Free Association (FDFA) has again raised urgent concerns about the sharp and sustained decline in Canada–US cross-border travel and the growing impact this is having on land border duty free stores, which it represents.
The FDFA is calling on the federal government to take targeted action to “restore fairness and competitiveness”.
FDFA said that new data shows cross-border travel by Canadians has dropped far more dramatically than previously understood, with some estimates pointing to declines of over -40% year-on-year, and even steeper drops in key travel corridors.
This is not just a tourism trend but a disruption that is being felt in real time by businesses and communities along the border, FDFA added. The calls echo those made earlier this year amid disruption to US-Canada cross-border travel and trade.
“These businesses have operated successfully for more than 40 years and were built to compete directly with the United States,” said FDFA Executive Director Barbara Barrett. “This drop in travel is real, but it is not permanent. The issue is the policy imbalance that is making it harder for Canadian operators to compete.”
Land border duty free stores are federally-licensed export businesses that sell exclusively to travellers leaving Canada, capturing spending that would otherwise occur in the USA. They are a critical part of the tourism and economic fabric of border communities, noted the association.
The decline in travel is already translating into sharp reductions in sales, particularly in smaller and more remote locations where these businesses are closely tied to local economies. But the FDFA noted that current policy framework continues to place Canadian operators at a structural disadvantage relative to US competitors.
“Our stores are designed to keep Canadian dollars in Canada,” said FDFA President Tania Lee. “The current environment is a moment in time, but the competitive imbalance is ongoing. If that imbalance is not addressed, the loss of sales and economic activity will continue to shift outside of Canada, even as travel recovers.”
FDFA is calling on the federal government to act on targeted regulatory changes that align duty free with Canada’s broader export framework and ensure these businesses can compete on equal footing with US retailers.
Without action, the association warned that continued travel volatility combined with existing policy misalignment will result in a sustained shift of Canadian consumer spending and economic activity to the USA.
Click on this link to access video of the press conference.
