Page 26 - IAADFS Summit of the Americas 2025 Special Issue

INSIDER

FDFA report: Canadian land border duty free stores unable to compete
with U.S. due to unnecessary red tape

Representatives from the Frontier plummeting by 95%. While the border misapplication of domestic policies upon
Duty Free Association (FDFA) released a has reopened, reduced cross-border travel this industry.
report on Feb. 13 showing that Canadian continues to hamper business, and the
land border duty free stores are unable burden of misapplied domestic regulations 2. Cut Red Tape: Streamlining the
to compete with U.S. retailers due to further hinders recovery. regulatory environment and eliminating
unnecessary red tape, unfair regulations, Reduction in Cross-Border Travel unnecessary compliance costs will
and misapplied policies. The Association Due to Tariff Threats: The looming threat help Canadian businesses operate more
is calling for urgent government action of U.S. tariffs is already contributing to competitively, aligning them with the
to level the playing field, remove the a decline in cross-border travel, further favorable conditions enjoyed by U.S. November 10 – 13, 2025
regulatory burdens, and safeguard exacerbating the challenges faced by retailers.
the survival of these vital businesses. Canadian land border duty free stores.
Immediate steps can be taken to support The FDFA report points out that 3. Fair Taxation Policies: The government Omni King Edward Hotel, Toronto, Ontario
the industry and ensure its competitiveness. Canadian land border duty free stores are must adjust tax policies to reflect the export
The report was presented at a press key drivers of local economies, especially status of Canadian land border duty free
conference held on Ottawa’s Parliament in rural and border communities. These stores. Reducing or eliminating excise
Hill. uniquely Canadian businesses not only taxes will help these businesses remain
“The Canadian land border duty free provide jobs and support local businesses, competitive and retain valuable economic
industry plays a pivotal role in supporting but also offer the last opportunity to keep activity in Canada.
border communities, promoting Canadian- money within Canada that would otherwise
made goods, and contributing to Canada’s be spent in the U.S. By promoting 4. Align Policy with Economic Growth
economy,” said Tania Lee, President Canadian-made products like maple syrup, Opportunities: Fostering a competitive
of the Frontier Duty Free Association. craft beer, and other distinctive Canadian duty free sector should be an integral part
“However, our businesses are at a distinct goods, they play a critical role in the of Canada’s broader economic strategy.
disadvantage due to domestic policies economy. Aligning federal policies, such as those
that are not similarly applied to U.S. duty “We’re asking for our highly- from Destination Canada, with the growth
free stores and U.S. retailers. By taking regulated businesses to be put in a position opportunities in border communities will
immediate action to eliminate red tape and to compete with our only competitor ensure that these regions can capitalize on
adjust regulations, our businesses could –U.S. retailers,” said Barbara Barrett, cross-border tourism and trade.
compete with and thrive like our American FDFA Executive Director. “Level the The FDFA report concludes with the
counterparts.” playing field by cutting the red tape. The message:
government can take immediate, revenue- Canadian land border duty free
Key Challenges neutral steps to help us compete, especially stores are integral to the health of
According to the FDFA, the as we continue recovering from the Canada’s economy, particularly in rural
key challenges fall into three main unprecedented border closure and current and border regions, and play a key role
categories: Misapplication of Domestic declines in cross-border travel.” in the tourism industry. The current
Policies, Pandemic Recovery and Border The FDFA is calling for a number government has an opportunity to make
Restrictions, and Reduction in Cross- of key actions to make Canadian stores quick, revenue-neutral changes that could
Border Travel Due to Tariff Threats. competitive: save this vital industry. By eliminating
Misapplication of Domestic Policies: red tape, reaffirming their export status,
Unlike U.S. competitors, Canadian land 1. Reaffirm the Export Status of Canadian these uniquely Canadian businesses
border duty free stores are burdened with Land Border Duty Free Stores: Canadian can be positioned to recover and thrive.
red tape and policies intended for domestic land border duty free stores are defined The FDFA urges the government to take
markets, which make Canadian operators and regulated as export businesses under swift, decisive action to level the playing
less competitive than U.S. counterparts. the Customs Act and CBSA D-memos. field and ensure that these businesses
Pandemic Recovery and Border To ensure clarity and consistency, a can compete with U.S. counterparts
Restrictions: The 20-month closure of the clear directive across federal ministries and continue to contribute to Canada’s
Canada-U.S. border during the pandemic is required to uphold the export status economic prosperity.
devastated the duty free sector, with sales of these businesses and to prevent the

fdfa.ca

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