Border Shops In Canada Combat For A Slice Of $400 Million Tourism Fund

The border between Canada and the USA has been closed to tourist traffic since March 2020.

getty

Canada’s border duty-free retailers are asking the Trudeau government for a $ 400 million (CAD 500 million) stake in a newly created tourism relief fund to give them a chance to survive 16 months after the Covid-19 pandemic give.

ADVERTISING

These independent businesses are on their last legs, according to the Frontier Duty Free Association (EDA), which represents Canada’s 33 land border stores. Duty-free sales here surpassed CAD 150 million annually in the recent past but plummeted in 2020, with retailers seeing sales declines of more than 95% and sometimes 100%.

The association is now asking Ottawa to apply for a small portion of the new tourism fund – approximately $ 6.6 million and $ 200,000 for each business. The appeal has come now because critical funding is coming through the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) programs began to relax Beginning of July. There are no sales proceeds to replace it as cross-border tourism to the US by road does not remain, but some easing of the restrictions from July 21st looks possible.

In a Zoom appeal on Wednesday, FDFA Executive Director Barbara Barrett said: “Without CEWS and CERS we will be decimated and may never fully recover. This means that small border communities can no longer support tourism and will ultimately disintegrate. Without exaggeration, our stores are in critical condition. ”

“A question of fairness”

Duty-free retailers on the border argue that they closed to protect Canadians and it is now up to the government to protect the fragile businesses on “fair grounds,” Barrett said. She told me: “So far, no border shops have had to close permanently, but many are on the sidelines.”

The FDFA also requires export labeling. As a highly regulated pure export company, every product and person entering duty-free border stores must travel to the United States. However, the shops are subject to national guidelines – for example with regard to strict regulations on alcohol labeling – which can be annoying and often unnecessary and can also lead to lost sales.

Philipsburg Duty Free on the Quebec-Vermont border only does 2% of its regular business.

Philipsburg Duty Free

Right now, border shops are also stuck with hundreds of thousands of dollars worth of inventory that must be destroyed when the products expire because the shops have no way of selling them. “We can’t even donate it at no substantial cost,” Barrett said. While other retail businesses have been able to open or switch to online pickup, delivery, or curb pickup at different times over the past year, borderline stores have not had these options due to their unique status.

ADVERTISING

Philippe Bachand, a shop owner in Philipsburg on the Quebec-Vermont border, said, “We closed in March 2020 and reopened in June. We only do 2% of our regular business, mostly from truckers making important trips, so we need support to pay our bills and some salaries to survive. That’s it.”

Falling through the rift between retail and tourism

A major hurdle for the FDFA’s campaign is that its members are seen as part of the retail trade, not as the tourism industry, and at first glance do not have a right to support from the tourism aid fund. “I only found out about that yesterday in a conversation with my MP, although 98% of my customers are tourists,” said Bachand, dismayed. “We are arguing about this point and want to discuss it with Mélanie Joly, the tourism minister.”

The FDFA added: “As long as the government keeps the land border closed, our members cannot do business. Duty free retailers and their employees are an integral part of tourism and border communities and we urge the government to step up and save them. ”

ADVERTISING

on Monday, the Coalition of Hardest Hit Businesses, of which the FDFA is a member, called on the federal government to protect tourism businesses as subsidies begin to run dry. Beth Potter, President of the Tourism Industry Association of Canada, said, “Our latest survey in June shows that nearly 60% of the hardest-hit Canadian businesses will not survive if the CEWS and CERS are not renewed. That means we could see a possible collapse of our industry. “

At the Hotel Association of Canada, CEO Susie Grynol added, “Our members who are directly connected to international and business travel need ongoing wage and fixed cost support to ensure we get to the other side.”