Duty-free stores struggling as borders remain shut

Click to play video: 'Duty-free stores struggling as borders remain shut'
Duty-free stores struggling as borders remain shut
Restaurants and retail stores have learned to pivot during the COVID-19 pandemic in order to survive — but that's not the case for land border duty-free stores. Global's Abigail Turner has more – Jun 4, 2021

Restaurants and retail stores have learned to pivot during the COVID-19 pandemic in order to survive — but one Canadian business sector says it doesn’t have that option.

With Canadians not able to travel internationally, that means no business, say owners of land border duty-free stores.

“If you were to ask if I see the light in the duty-free program … I’m not sure how I would answer that today,” Simon Resch, the owner of Emerson, Man.’s land border duty-free store, says.

His business, along with the 33 others in Canada, depends on export sales, relying solely on purchases from Canadians travelling out of the country.

“I think it’s safe to say that everybody agrees with some sort of lockdown measure in the pandemic response,” says Resch.

Story continues below advertisement

“That’s reasonable, that’s responsible, that’s been a really good and necessary thing… but 15 months into it, there’s a lot of suffering, and some of us can’t respond in the pandemic the way others have been able to.”

The Frontier Duty Free Association says the Canada Border Services Agency has strict rules for altering business plans at duty-free stores.

The latest health and medical news emailed to you every Sunday.

The FDFA says because of this, it’s not possible for Canadian duty-free stores to pivot to concepts like curbside pickup or online shopping.

“Everything in the store, every piece of inventory, every human, once it’s entered the store, it has to exit into the United States. So with the border closed, it’s been absolutely devastating,” says Barbara Barrett, the FDFA’s executive director.

To help struggling business owners, the FDFA is asking the federal government for a portion of the allotted Tourism Relief Fund.

The federal government said it would establish a $500-million Tourism Relief Fund, administered by the regional development agencies, earlier this spring.

Story continues below advertisement

“They have no other mode of doing business. They can’t pivot to doing domestic sales because they’re highly regulated by the CBSA and their licence depends on them,” Barrett says.

For Resch’s store, he says in a normal month he’d make hundreds of thousands of dollars in revenue, however he says he’s down about 80 per cent with sales only going to essential workers.

The FDFA says it recognizes the importance of keeping Canadians safe, but that moving forward it wants to be notified ahead of time about restriction timelines.

Barrett says the industry only found out about the current border closure extension until June 21 through a tweet from Bill Blair, the minister of public safety and emergency preparedness.

Story continues below advertisement

“We need to work with our provincial governments, our federal governments to ensure that number one, here is sufficient support to last and number two, that there is informed, comprehensive, strategic plans to get back to reopening and that that is communicated to us so we have a chance to prepare,” says Resch.

Sponsored content