Tariffs, lack of traffic put Canada’s first duty-free shop at risk of closing, threatens Emerson economy By: Tyler Searle Posted: 1:24 PM CDT Tuesday, Apr. 15, 2025 Last Modified: 12:13 PM CDT Wednesday, Apr. 16, 2025 Updates

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Canada’s first duty-free shop, and one of only two in Manitoba, is at risk of closing as fewer Canadians head south thanks to the political fallout from U.S. President Donald Trump’s tariffs on imports.

“The uncertainty surrounding our future has deeply affected the store my family has operated for over 40 years,” said Simon Resch, the owner and operator of the Emerson Duty Free Shop.

”It no longer feels like a place of stability, but one of constant stress and crisis. These days — or maybe I should say, these years — all of the reward has been removed, the risk has been enhanced. It’s demoralizing, it’s deflating and the real impacts of it are people are losing their jobs. People, like me, are losing their homes, we’re losing our livelihoods, our life investments.”

Resch and his counterparts at the Frontier Duty Free Association, which represents Canada’s 32 land border duty-free shops, issued a plea for federal support Tuesday as their revenue dipped to critical levels.

The businesses were hit hard by pandemic border closures and were beginning to recover when Trump’s tariffs and Canada’s retaliatory measures led to reduced cross-border traffic, Resch said.

The association urged Canada’s federal political parties to promise targeted financial support to address immediate trade-related impacts, issue a directive to ensure consistent application of export status and align excise taxes to level the playing field with U.S. competitors.

A national membership survey, conducted at the beginning of the tariff crisis, found one-third of duty-free shops could close within months if the trend continues. Some businesses are experiencing revenue declines exceeding 80 per cent, said association executive director Barbara Barrett.

“We are in a crisis, there is no other way to put that. Our stores are completely reliant on border crossings…. We have no way to pivot our business, we can’t sell domestically, we can’t sell online,” Barrett said.

“Given that we are at a pandemic-level crisis, we are asking for pandemic-level support from the government.”

Many duty-free stores, such as the one in the RM of Emerson-Franklin, are critical to the economies of rural border communities. They are often long-standing family owned and operated businesses, Barrett said.

“The uncertainty surrounding our future has deeply affected the store my family has operated for over 40 years.”–Simon Resch

They exist, in part, to “repatriate” Canadian dollars from travellers before they cross into the U.S., she said.

In the case of Emerson, financial support from the duty-free shop has supported community festivals and events in past years. It has contributed funding to develop a local curling club and a seniors centre, Resch said.

“We just can’t do those things anymore. Literally, we’ve got no money, no ability,” he said.

The business was started by Resch’s parents in the early 1980s, when the Canadian government announced it was launching a duty-free program and solicited proposals from entrepreneurs to develop an initial six stores.

Resch’s parents seized the opportunity and applied. They became the first licensed duty-free store to open in the country, he said.

Over the decades, Resch estimated the business has employed more people than the entire population of Emerson- Franklin (home to 2,437 residents, according to the 2021 Census).

There are, typically, more than 50 staff members in the summer, but Resch said it will not be possible to hire that many people if traffic remains down.

“Given that we are at a pandemic-level crisis, we are asking for pandemic-level support from the government.”–Barbara Barrett

Currently, he is operating with a skeleton crew of five after several long-term employees opted to retire and others were laid off, he said.

“There aren’t that many opportunities out here. Everybody my age, many of their parents and almost all of their children have had a job at the Emerson Duty Free at one point,” Resch said.

“I feel almost an obligation to ensure there is a beneficial employment opportunity for them, and I can’t do that anymore.… It’s not the Canadian dream. I don’t want to sound political at all, but this is not what anybody signed up for.”

Beyond temporary financial supports, Resch would like the government to update regulations to either remove excise taxes on certain goods exported by duty-free operations or give such businesses a way to recover those taxes.

U.S.-based duty-free stores are not subject to the same regulations, which places Canadian competitors at a disadvantage, he said.

Kent Turner, who has operated the Peace Garden Duty Free shop near Boissevain for 34 years, said traffic is also down at his business. Some longtime customers have warned him they are unwilling to cross into the U.S. during the trade war, he said.

Fortunately, the border crossing he serves is a hot spot for semi-trailer drivers, which is helping to keep him and one part-time employee afloat. He said he is not at immediate risk of closure because he supplements his store income through farming.

“I’m not going to say I’m not in trouble.… I don’t even pay myself,” Turner said.

“I was asked by my association how long I could manage like that; I said maybe three months, maybe four.”

Turner stressed that other duty-free businesses with larger staffs might not be so resilient. He expressed hope that traffic will return in the coming months.

tyler.searle@freepress.mb.ca