Emerson duty-free shop owner urges feds to step up as plunging cross-border travel 'evaporates' sales

The owner of the duty-free shop in Emerson, Man., says his family's business is at risk of shutting down if the federal government doesn't step up with financial relief, as plummeting cross-border travel has dried up sales at those stores across Canada.

The Emerson Duty Free Shop, located near the Manitoba-U.S. border, is used to seeing many Canadians flocking south around this time of year, according to owner Simon Resch. But he says business during this past spring break looked similar to when the COVID-19 pandemic halted trips into the United States.

Duty-free stores rely completely on cross-border travel to sell products, including tax-free booze, to travellers, and are legally unable to pivot to deliveries or online sales. They're licensed by the Canada Border Services Agency at 52 land border crossings and international airports in Canada.

"There is no tax with us, you know, so you can save a lot of money and still buy your favourite Canadian products before entering the United States," said Resch.

But tensions between Canada and the U.S. have caused some in Canada to reconsider travel south of the border, directly impacting Resch's store and others across the country.

Resch says he's had to lay off five full-time employees since February. The Emerson shop is a big employer in the town, which according to 2021 census data has a population of 660 people.

Canadians make up about 80 per cent of Resch's customers, he said. He wants to see the federal government provide a financial support package for businesses like his while sales are down.

"The customer base evaporates — through no fault of the duty-free operator — but many are still stuck with these huge occupancy costs," he told CBC News on Tuesday.

'Trump is a moment in time'

The number of return trips among Canadians travelling to the U.S. in March plummeted compared to the previous year, according to Statistics Canada. Air travel dropped by 13.5 per cent while land travel fell by about 32 per cent.

There are 32 land border duty-free stores across Canada, operating in seven provinces, according to a 2024 report by the Frontier Duty Free Association.

Since late January, sales have dropped between 40 and 50 per cent at duty-free stores across the country, the association said in a Monday news release.

The shops were just beginning to recover from the COVID-19 pandemic when new economic pressures unravelled as U.S. President Donald Trump's tariff threats against Canada created uncertainty and hurt cross-border traffic, the association said in the release.

The association is asking all of Canada's national political parties to include financial support for duty-free stores to their election platforms.

It's also calling for regulatory changes and tax alignment measures that it says would help level the playing field with U.S. competitors.

CBC has reached out to the federal government for comment.

Resch says he needs help to pay his remaining staff.

"During the pandemic we took out loans, we borrowed money in order to cover, in part, our payroll expenditures," he said. "That was a bit of a hit to us. We're still carrying those burdens."

No matter what happens, Resch says his hope is that the historic friendship between Canada and the U.S. is not permanently fractured.

"It's important that we as Canadians understand the value of the relationship with our southern neighbour, and don't get too far removed from the benefits that that relationship brings us," he said. 

"Trump is a moment in time. Canada and the U.S. will endure."