Duty-free shops facing ‘full-blown crisis’ with no relief in sight

John Slipp is seen at his closed duty-free store, at the Canada-U.S. border crossing between Woodstock, N.B., and Houlton, Maine, on Thursday, Aug. 14, 2025. THE CANADIAN PRESS/Stephen MacGillivray

John Slipp took over his father’s duty-free store in 1994, which had been started more than a decade earlier.

This month, he closed the Woodstock Duty Free Shop Inc. as lower traffic at the U.S.-Canada border dealt the final blow to a business already weakened by the COVID-19 pandemic. Now, at 59, Slipp says he will have to find another source of income and is advocating for more government support for stores like his.

Fewer Canadians have been heading south in recent months in response to U.S. President Donald Trump’s trade war with Canada, his comments about annexing the country and because of fears among travellers about treatment at the border. In the duty-free industry, Slipp said less border traffic directly correlates to fewer sales.

“It was very difficult. The business had many good years. I certainly didn’t want to be in the position of calling an end to a business career, giving up, calling it quits, both personally and in terms of my late father,” Slipp said.

At the store’s peak in the early 2000s, Slipp said there were about 15 people on staff. In March 2020, he said he laid off four people and reopened after the pandemic with two employees.

Late in the summer of 2021, Slipp said duty-free stores were “all starting from zero to rebuild again.” By the end of 2024, his business was still down about one-fifth from where it was in 2019.

Then Trump returned to the White House. From January to April this year, things got worse for Slipp’s store, and he ultimately decided to close based on declining sales and traffic numbers.

“Just realizing that even after the U.S. administration changes down the road, in our industry, we do not expect the border traffic to change overnight as a result of that. We believe it’s going to take years,” he said.

Recent figures from Statistics Canada noted that return trips from the U.S. dropped again in July as Canadians continue to shun travel to the U.S.

The number of Canadian residents returning from the U.S. by automobile was down 36.9 per cent on an annual basis in July, marking the seventh consecutive month of year-over-year declines.

Barbara Barrett, executive director of the Frontier Duty Free Association, said the stores her association represents have been feeling the decline in traffic for months.

“I would describe our industry as being in a full-blown crisis, and we’ve been saying that for a number of months now,” she said.

Sales at duty-free stores have fallen between 40 and 50 per cent year-over-year across the country since late January, with some remote crossings reporting annual declines of up to 80 per cent, the association said.

Barrett added that duty-free stores are often a microcosm of what is happening at the border.

“This should be our busy season during the summer, but it is not; it is pandemic-level traffic in the parking lots, and it has led to one store closing in the east. We are unfortunately afraid that we will likely see more closures as we draw to the end of the summer,” she said.

Unlike airport stores, which are often owned by international companies, Barrett noted all of the land border stores are independently owned and are often family-run businesses.

While Canadians shun U.S. trips, travel expert Claire Newell said many are opting for domestic and other international destinations.

“We live in a country where it’s still very expensive to travel domestically. And while there are many people who are choosing to travel within Canada, we also see more people heading to popular destinations,” she said.

She said she doesn’t see Canadians changing their travel habits back to normal until there is a trade deal “that feels fair.”

As lower border traffic weighs on the industry, Barrett said she is advocating for “small regulatory changes.”

“We have some taxes on our products that, believe it or not, in a tax- and duty-free industry that our U.S. competitors don’t have. So we’re asking for those to be changed so we can be more competitive,” she said.

“Also, we’re asking to qualify for some of these tariff relief programs or pandemic-level supports along the lines of what they did during the pandemic with wage subsidy or rent subsidy.”

Barrett said the government is the landlord for many duty-free stores and said a rent deferral or subsidy would help the industry until travel patterns normalize. She added that there have been conversations between her organization and senior government officials.

Barrett said those officials agreed the association was putting forward “small asks” to support the industry.

An Aug. 2 release announcing the Woodstock Duty Free Shop’s closure mentioned that the federal and provincial governments had promised tariff relief support programs to help businesses impacted by trade tensions.

“I pinned a lot of hopes on those when both levels of government made those announcements. I was reminded of the pandemic support programs,” Slipp said, adding that his business had benefited from such programs.

His attention has now turned to advocating for rent deferral programs for duty-free shops renting land from either the federal government or from a bridge authority as well as loan programs for duty-free stores.

When he looks at the future of the industry, he said the prospects “are not bright.”

“I’m grieving the loss of my business, but I’m also accepting the reality that the business environment has changed and there is nothing in the bag of tricks that would suggest positive changes in this industry in the short to medium term,” Slipp said.

“I’m feeling bad that I was not able to succeed in the end and that I am having to lay to rest this business that my father and I have built and spent so many years working so hard on.”

This report by The Canadian Press was first published Aug. 17, 2025.

Daniel Johnson, The Canadian Press