Thursday, November 13, 2008


The American President, George W. Bush, hosts the highest ever level of G-20 Leaders in Washington this weekend in ongoing efforts to resolve the economic crisis facing the world. The Prime Minister, Mr. Harper, will be representing Canada, fresh out of an early exit from the currently underway Conservative Party policy convention being held in Winnipeg.

They are not on the agenda of neither the G-20 Summit, nor even the Tory love-in in Manitoba's capital city. Still though the Canadian Border Services Agency is grappling with some thorny issues involving Canada's "duty-free shops" which eventually may appear on the Government's legislative or regulatory agenda.

I am not a terribly frequent user of duty-free shops. I recall perhaps one, two or three occasions when I have actually been inside one as a purchaser rather than a browser waiting for a delayed flight. The shops first appeared at Canadian airports around 1965. Shops adjacent to land-border crossings began in 1982....therein lies a large part of the problem: In the ensuing 20 years, regulations and rules affecting one sector became totally different from the other.

Forty years after airport shops first opened, the Canadian Border Services Agency is planning to strip-away many of the silly regulations, and inject more competition into the business. Duty-free shops are a $300-million a year business in Canada. The Border Agency now wants to allow "arrivals" duty-free shops; abolishing Canadian content regulations; allow large corporations to own the shops; there could be more than one competing shop at a site; and stores could operate at ferry terminals and railway stations.

There are 180 designated "international" airports in Canada. The biggest proposal, allowing "arrivals" duty-free shops, would mean estimated additional revenues of about $50-million for those locations. There are 28 existing land-border shops. They are neither keen on the issue of large scale take-overs from corporate entities...even less tickled by the proposal to allow competing shops on the existing sites.

Already in the works may be some legal challenges to the proposals which are being developed by the Border Agency. For sure, none of the proposed changes will be in place for this year's up-coming Canadian holiday and winter travel period south into the U.S., Mexico, the Caribbean, and elsewhere. The radical reforms are still being worked on, and as our economic conditions shake down it may be both some time before the Government deals with the issue...or for that matter Canadian travellers have enough confidence to travel much beyond our borders.

1 comment:

  1. The Duty Free on arrival proposal in Canada is a positive development as it overcomes a number of problems for travellers, least of all the need to carry goods halfway round the world to bring home. We hope it is approved and are ready for the challenge.