Canada’s independent duty-free shops along the U.S. border are sounding the alarm as cross-border travel continues to plunge, putting many of these businesses on the verge of collapse. In a joint letter issued June 3, the Frontier Duty Free Association, supported by 15 border city mayors, urged Prime Minister Mark Carney and Finance Minister François-Philippe Champagne to deliver immediate financial support and regulatory clarity to prevent widespread shutdowns.
The steep decline in travel has been tied to growing trade tensions with the United States, compounding the damage already inflicted by pandemic-era border closures. Duty-free shop owners report revenue losses ranging from 60 to 80 percent. Tania Lee, president of the association and owner of Bluewater Bridge Duty Free in Sarnia, Ontario, emphasized the urgent nature of the crisis. “Our stores are an integral part of Canada’s tourism and border economies,” Lee said. “We are not large chains or foreign franchises. We’re small, Canadian-owned exporters that support local jobs and communities.”
Barbara Barrett, the association’s executive director, described the economic fallout as devastating, with serious implications for workers, local suppliers, and municipal revenues. Unlike other retail sectors, duty-free businesses are reliant entirely on outbound travelers and have seen minimal recovery due to persistent disruptions and new trade-related challenges.
The group is asking Ottawa for immediate liquidity assistance, a formal reaffirmation of their export status, and updates to excise tax regulations that better reflect their unique business model. They argue these changes are essential to compete with U.S. duty-free shops that operate under less restrictive rules.
Support for the industry is growing among local leaders, including Niagara Falls Mayor Jim Diodati and Sarnia Mayor Mike Bradley, both of whom signed the letter calling for action. They warn that without urgent government intervention, many family-run duty-free businesses could close their doors permanently in the coming weeks.
Recent data from Statistics Canada paints a bleak picture. Vehicle arrivals from the U.S. dropped 8.7 percent in March 2025 compared to the previous year, and trans-border air travel was down 5.8 percent in April—still 12.5 percent below pre-pandemic levels from 2019.
As Ottawa crafts its response to rising tariffs from Washington, border communities are urging the federal government not to overlook the economic emergency already unfolding on Canadian soil. For many duty-free retailers, time is running out.