Canada’s duty-free shops, once bustling hubs for cross-border travelers, are teetering on the edge of collapse as U.S. tariffs and trade tensions choke off customer traffic in 2025.
From small family businesses to community anchors, these stores face an unprecedented crisis, with sales plummeting up to 80% in some locations.
As the federal election looms, shop owners and industry advocates are pleading for urgent government aid to weather this economic storm.
Here’s the full story of their struggle, why it matters, and what could save them.
Table of Contents
A Border Business in Crisis
Across Canada, the 32 duty-free shops dotting the U.S. border—from British Columbia to New Brunswick—are sounding the alarm.
These stores, which sell tax-free goods like alcohol, cosmetics, and souvenirs to travelers leaving the country, rely entirely on cross-border traffic.
But since U.S. President Donald Trump’s tariff threats began in January 2025, that traffic has dried up, plunging the industry into what owners call “survival mode.”
Éric Lapointe, who owns a duty-free shop in Quebec’s Beauce region, has seen it all in his 35 years in the business—except this.
“I’ve never witnessed such a sharp drop in customers,” he said in an April 2025 interview.
Sales at his store have crashed by 50% this year, a decline he attributes to Canadians shunning U.S. travel amid tariff-fueled tensions.
“We’re caught in the crossfire with no way out.”
The Frontier Duty Free Association, representing Canada’s land-based duty-free stores, paints a grim picture.
A recent survey revealed that one in three shops could shutter within months without immediate help.
Some locations report sales drops as high as 80%, echoing the darkest days of the COVID-19 pandemic when borders were all but closed.
Why Are Duty-Free Shops Hurting?
The root cause lies in Trump’s aggressive trade policies.
Starting in January, he threatened steep tariffs on Canadian goods, prompting a patriotic wave across Canada.
Politicians and influencers urged citizens to “buy local” and boycott U.S. travel, a call that resonated deeply.
A Quebec Tourism Industry Alliance survey found nearly half of Quebecers who planned 2025 U.S. trips have canceled or reconsidered—a trend mirrored nationwide.
This shift has gutted duty-free shops, which depend on Canadians crossing into the U.S. for shopping, vacations, or even quick errands.
“Our Canadian customers have vanished,” Lapointe said, echoing a sentiment shared by owners like Philippe Bachand of the Philipsburg duty-free store.
Bachand, who employs 20 staff, had hoped for a post-COVID rebound this summer.
Instead, his Canadian shoppers dwindled, leaving him scrambling to keep the lights on.
The numbers tell a stark story. U.S. Customs and Border Protection reported nearly 500,000 fewer Canadian travelers crossing the land border in February 2025 compared to last year. Duty-free shops felt the hit immediately.
Unlike airports, where international flights still draw crowds, land-based stores rely solely on border-hoppers—a group now staying home in droves.
The Tariff Fallout: A Perfect Storm
Trump’s tariffs, which hit Canadian exports like steel, aluminum, and autos, sparked Canada’s retaliation with 25% surtaxes on U.S. goods.
This tit-for-tat trade war has inflated costs for cross-border shoppers, erasing the savings that once lured Canadians to U.S. stores like Walmart or Target.
Add a weak Canadian dollar—hovering near historic lows—and the math no longer adds up for many.
For duty-free shops, the timing couldn’t be worse.
Many were still recovering from the pandemic’s border closures, which forced temporary layoffs and loan reliance.
“We were almost back to normal last summer,” Bachand said.
“Now, it’s like starting over, but worse.”
The uncertainty of ongoing trade talks, with Trump’s 90-day tariff pause for most nations (excluding China) announced April 10, only deepens the gloom.
Owners fear a prolonged boycott could be fatal.
Voices from the Front Lines
Behind the statistics are real people fighting to save their livelihoods.
Lapointe, who took over his Beauce shop in 2022, employs a tight-knit team and supports local suppliers.
“These aren’t just jobs,” he said.
“They’re families, communities.” His store, a fixture since the 1980s, promotes Canadian products like maple syrup and ice wine—ironic, given the patriotic push keeping customers away.
Bachand’s Philipsburg shop, another family-run mainstay, faces similar woes.
While some American travelers still stop by, they’re not enough to offset the loss of Canadian regulars.
“People hear ‘don’t go to the U.S.’ from every angle—government, media, neighbors,” he said.
“They’re listening, and we’re paying the price.”
Nationwide, the Frontier Duty Free Association’s 32 stores employ hundreds and anchor border towns.
Barbara Barrett, the association’s executive director, calls them “pillars of Canadian tourism.”
Beyond selling tax-free goods, they offer travel info, rest stops, and local pride.
“These are small businesses woven into the fabric of their communities,” she said.
“Losing them would ripple far beyond the border.”
A Plea for Help as Elections Loom
With Canada’s federal election set for April 28, 2025, duty-free owners see a chance to be heard.
Last week, Barrett took the stage in Ottawa, urging all political parties to act.
Her group’s three-point plan demands:
Financial Aid: Grants or interest-free loans to offset tariff-driven losses.
Loan Forgiveness: Relief from lingering COVID-era debts, like Canada Emergency Business Account loans.
Policy Support: Recognition of duty-free shops’ unique role in border economies.
“We’re not asking for a bailout—just a lifeline to weather this storm,” Barrett said.
She draws parallels to the pandemic, when government aid kept many shops afloat.
Without similar help now, she warns, entire border communities could suffer—shops are often major employers in small towns.
The association’s plea comes as candidates hit the campaign trail.
Prime Minister Mark Carney, facing a tight race, has vowed to protect Canadian businesses from U.S. tariffs.
But duty-free shops want specific promises.
“We’re not invisible,” Barrett said.
“We need leaders to see us and act.”
The Bigger Picture: Trade and Travel
The duty-free crisis reflects broader strains in Canada-U.S. relations.
The $2.5 billion in daily trade between the two nations supports millions of jobs, but Trump’s policies—coupled with his “51st state” taunts—have soured ties.
Former Prime Minister Justin Trudeau’s call to “choose Canada” for travel and shopping, echoed by current leaders, has fueled a boycott that’s both economic and emotional.
For Canadians, skipping U.S. trips feels like standing up to a bully. But for duty-free shops, it’s a death knell.
“I get why people are staying home,” Barrett said. “But we’re collateral damage.
We sell Canadian goods, keep dollars here—yet we’re hurting most.”
Even if tariffs ease, rebuilding traveler confidence could take months or years.
What’s at Stake?
If duty-free shops close, the fallout would hit hard. Border towns could lose jobs, tourism dollars, and community hubs.
Shops like Lapointe’s and Bachand’s aren’t just retailers—they’re employers, sponsors of local events, and showcases for Canadian brands.
A third of the 32 stores closing would mean dozens of families out of work and towns like Osoyoos, B.C., or Emerson, Man., facing economic voids.
Consumers feel it too.
Duty-free shops offer savings on high-tax items like liquor and perfumes—deals that stretch budgets.
Without them, travelers lose a perk, and Canada’s tourism brand takes a hit.
“We’re the first ‘hello’ for Americans and the last ‘goodbye’ for Canadians,” Barrett said.
“That’s worth saving.”
Hope Amid the Hardship
Despite the gloom, there’s a flicker of optimism.
Some owners are adapting—promoting online sales (where allowed) or pitching to American visitors.
Others bank on election promises turning into action.
Barrett’s group is lobbying hard, meeting MPs and rallying border mayors.
“We’ve survived tough times before,” she said. “With help, we can again.”
Lapointe holds out hope for a trade thaw.
“If Canadians start crossing again, we’ll rebound,” he said.
“But we need to hang on until then.”
Bachand, meanwhile, is cutting costs but refuses to give up.
“This is my family’s legacy,” he said. “I’ll fight for it.”
What Can You Do?
The duty-free crisis isn’t just a business story—it’s a Canadian one.
Here’s how to help:
Shop Local, Including Duty-Free: If you’re crossing the border, stop at a Canadian duty-free shop. Your purchase supports jobs.
Spread the Word: Share this story to highlight the shops’ plight.
Push for Change: Tell your MP to back aid for border businesses before the April 28 vote.
As Canada navigates this trade war, duty-free shops are a reminder of what’s at stake when borders become battlegrounds.
Their survival depends on action—yours, the government’s, and travelers’ alike.
Will they make it? Stay tuned with CTC News, and let’s keep the conversation going.
