Ottawa, Ontario--(Newsfile Corp. - July 7, 2021) - Small, Canadian, family-owned duty-free stores are on the brink of collapse as the U.S.-Canada land border closure hits the 16-month mark. These export stores have been shuttered for over a year and are down over 95% in sales, as the border closure, made originally to protect the Canadian public, continues without modification.
The Frontier Duty Free Association (FDFA), representing the small independently-owned, land-border duty-free businesses, today called on Ottawa for a specific package to save the sector from closing its doors and ending 40 years of successful export to the United States. "Our border stores have been essential in building the economies of Canadian border communities and an integral part of the tourism export industry in Canada. Our industry cannot come back without specific relief measures," said FDFA Executive Director, Barbara Barrett. "We are the hardest hit of the hardest hit businesses in Canada," added Barrett.
Tight and appropriate regulations for the duty free sector has meant that duty-free stores have not been able to shift business models to domestic or online sales during the border closure. None of their inventory has been allowed to be used for donations or returns. While other Canadian businesses have been open or allowed to adapt during COVID, the land border closure has killed these stores.
FDFA is calling on the federal government to take three specific measures:
- Relief FundLand border duty-free stores have taken on significant debt to survive almost a year and a half with no sales and no end in sight. Out of the $500 million Tourism Relief Fund, the Association is asking for a $200,000/store grant program for each store, or a $6.6 million program based on size and need.
- Export DesignationDespite being for export only, land border duty-free products are subject to domestic policy, putting Canadian stores at a competitive disadvantage with U.S. duty-free retailers, resulting in significant revenue loss. It is critical to the recovery and competitiveness of this vibrant Canadian industry that it be treated as EXPORT ONLY and given an Export Designation.
- Open the land border in line with climbing vaccination rates and declining COVID-19 cases on both sides of the border.
"I don't know what business can be closed for sixteen months and be expected to survive without additional support," said Barrett. "We gladly did our part to help keep Canadians safe, but it is time now for the government to step up and help us get to the other side of this."
Some government relief programs have been helpful, such as CEWS, but this program has begun winding down and the industry has not begun recovery as the border remains closed. Further, the stores fall through the cracks of other programs such as the Rent Subsidy Top-up because of their unique, regulated business model.
"It is a matter of fairness," said Barrett. "As long as the government keeps the land border closed, we cannot do our business and we are asking to be able to survive and have a future. Our retailers and their employees did not make business mistakes or plan badly, but we closed to protect Canadians and we deserve not to be left behind and kill a 40-year-old export sector."
The FDFA is the national association representing Canada's the 33 land border duty free shops. Our mandate is to promote the development and success of the land border duty free sector by acting as a voice, advocate and business resource for members.