Canadians made 22.9 million trips to the U.S. in 2025, a 28% decrease from the previous year, primarily due to tariff disputes and political discouragement of U.S. travel. This decline has severely impacted duty-free shopping, with many stores reporting revenue drops of 30% to 75% since 2019. For example, the Emerson Duty Free in Manitoba has reduced its staff from 35 to just four employees as cross-border traffic dwindles. The remaining 31 duty-free shops in Canada are struggling, with one store shutting down last summer due to low sales. Duty-free owners express frustration over the lack of government support, contrasting their situation with access to relief programs during the COVID-19 pandemic. The situation has also affected U.S. duty-free businesses, highlighting a broader decline in cross-border commerce.
Why It Matters
The significant drop in Canadian trips to the U.S. is reshaping the landscape for duty-free shops on both sides of the border. Duty-free businesses, which can only sell to travelers heading into the U.S., are feeling the pinch as cross-border travel decreases. The decline in Canadian travel has broader implications for local economies that rely on these shops, and many owners are facing financial instability without government support. Historical patterns show that fluctuations in travel, often tied to political relations and economic conditions, directly impact retail sectors across borders, highlighting the interconnectedness of the Canadian and U.S. economies.
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