Emerson Duty Free Shop Owner Demands Urgent Regulatory Changes

The owner of the Emerson Duty Free Shop in Canada, Simon Resch, is advocating for significant regulatory changes as his business grapples with declining cross-border traffic. Resch’s plea comes in light of a series of closures among duty-free stores across the country, including the recent shutdown of the Woodstock Duty Free Shop in New Brunswick and the insolvency of the Peace Bridge duty-free store at one of Canada’s busiest land border crossings.

In recent months, fewer Canadians have been making trips across the border, with statistics revealing a 36.9 percent year-over-year decline in Canadian motorists returning from the United States as of July. This downward trend has persisted for seven consecutive months, prompting concern among duty-free store owners. Factors contributing to this decline include travel boycotts stemming from political tensions and fears regarding treatment in the United States.

Resch expressed frustration with the current regulatory environment, stating that the Canadian government has effectively left duty-free stores “out there for the wolves.” He noted that the operational challenges have led to a significant reduction in staff at his store, which once employed over 30 seasonal workers but now has only six employees. Additionally, he has decreased his inventory purchase volume by approximately 75 percent.

In an effort to survive, Resch is considering whether to pivot his business model entirely. “For me, it really is a consideration — do we continue with duty-free, or do I try to repurpose our land?” he asked, highlighting that converting the store into a grocery outlet is not a viable option.

In his appeal for support, Resch pointed to discriminatory regulations that hamper the viability of his business, particularly the excise taxes on products such as tobacco, which represent a significant portion of his sales. He remarked that American duty-free stores do not face similar tax burdens, leading to a competitive disadvantage. This situation has also resulted in illegal products becoming more prevalent, as evidenced by the presence of discarded cigarette packages on his store’s premises.

Resch is not alone in his concerns; other duty-free store owners have rallied together. In June, Canadian border mayors and the Frontier Duty Free Association (FDFA) sent a letter to the federal government requesting financial assistance for duty-free stores and clarity regarding export regulations. The FDFA, which represents 32 duty-free stores across Canada, is particularly alarmed by the potential for further closures without government intervention.

Barbara Barrett, executive director of the FDFA, emphasized the urgency of the situation, stating, “We’re in a crisis, and the crisis is not of our making.” Sales at duty-free stores across the country have plummeted between 50 to 80 percent, with Barrett underscoring the need for government support to navigate this challenging period.

The Canadian government’s stance on excise taxes involves balancing revenue generation with public health goals, particularly for tobacco and vape products. A spokesperson for the Department of Finance Canada, Caroline Feggans, highlighted that taxing these products is aimed at discouraging consumption. However, she refrained from commenting on potential future policy adjustments.

Ted Falk, the Member of Parliament for Provencher, acknowledged the role of duty-free stores in providing employment in border communities. He indicated that the government must consider aligning excise taxes to support these businesses moving forward. “This is something Prime Minister Mark Carney needs to address sooner than later,” Falk stated.

Resch’s family has a longstanding history in the duty-free industry, having established Canada’s first land duty-free shop more than 40 years ago. He believes that without immediate regulatory changes, the future of the industry remains uncertain. “Change is critically important to keep the industry from folding,” he asserted, as he continues to call for government action to support struggling businesses like his own.

The situation at the Emerson Duty Free Shop highlights the broader challenges facing duty-free retailers in Canada and underscores the urgent need for government intervention to ensure their survival in an increasingly competitive landscape.