(Update) 'It's very grim': Duty-free shops see sales plummet as travellers shun U.S.

Philippe Bachand was in his mid-20s when he helped open his family’s duty-free store an hour south of Montreal.

In the 37 years since, he has never seen such a drastic drop-off in traffic and sales while the Canada-U.S. border was open.

After U.S. President Donald Trump launched his trade war and mused about annexing Canada, revenue began to plummet in lockstep with shrinking traveller volumes.

“January was not too bad. February was starting to slow down, and then March, with the new tariff and all that, my Canadian traffic was down 50 per cent,” said Bachand, 63, whose shop sits in Philipsburg, Que.

“It’s not fun.”

His experience reflects a blow felt by duty-free store owners across the country as Canadian travellers steer clear of the United States amid anger over tariffs, fears about treatment by border guards and demeaning comments from Trump about Canada as a potential "51st state."

Sales at duty-free stores have fallen between 40 and 50 per cent across the country since late January, with some remote crossings reporting declines of up to 80 per cent, according to the Frontier Duty Free Association.

"It just dropped off the cliff," said executive director Barbara Barrett, whose association represents 32 stores. "It's very grim."

The mom-and-pop shops, which sell products tax-free ranging from maple cookies to Canadian Club whiskey, were just starting to bounce back from the COVID-19 pandemic when the trade war struck, owners said.

“I just woke up from my COVID hangover, and I’m having a tariff nightmare,” said John Slipp, while driving to the duty-free outlet in Woodstock, N.B., that his father founded in 1985.

While duty-free stores at land crossings number fewer than three dozen, they can be cornerstones of the local economy in rural areas.

Layoffs loom as a possibility if business fails to turn around.

“I have not made them yet, but I’m going to be," Slipp said.

The Frontier Duty Free Association, whose tightly regulated members do not have the option to pivot to delivery or online sales, is calling on the federal government to offer support in the form of grants or loans to ride out the disruption.

"We are 100 per cent dependent on that travel over the border," Barrett stressed. "You have to be travelling over to the United States to enter into our stores."

The number of Canadians returning by car from the U.S. fell nearly 32 per cent last month compared to March 2024, the third consecutive month of year-over-year declines and the steepest plunge since the pandemic, according to Statistics Canada.

At some crossings, Americans going back home make up the bulk of the buyers. But car visits by U.S. residents dropped 11 per cent last month versus a year earlier, the second straight month of year-over-year declines.

"It's like the Americans are shy to come to Canada," said Bachand. He pointed to the boos that American sports teams have received in Canada over the past two months.

"It's not welcoming."

This report by The Canadian Press was first published April 11, 2025.