Duty-free Shops

The Canada Border Services Agency (CBSA) licenses duty-free operators, which sell goods to travellers leaving Canada. Duty-free shops are located at 52 land border and international airport locations across Canada. They sell goods free of certain duty and taxes normally levied on goods sold in Canada.

Duty-free shops at international airports have been in existence since the 1960s followed by the expansion to land border locations in 1982.

How they work

Duty-free shops are intended only for customers who are about to leave Canada. Goods purchased at a duty-free shop must be immediately exported. Apart from selling duty- and tax-free goods, these shops also provide information on duty-free exemption limits to travellers to the United States and to returning residents of Canada.

The CBSA oversees the licensing of duty-free shops, primarily to ensure duty-free goods are properly accounted for and exported. The CBSA also monitors duty-free shops to ensure they comply with government requirements, and modifies related regulations and policies.

Strategic Review - Duty-Free Shop Program

Under Strategic Review, all government programs are reviewed on a regular basis to ensure they are effective and efficient, that they respond to the priorities of Canadians and that they are in line with core federal responsibilities.

In 2010, a Strategic Review decision was made to minimize the CBSA's oversight of the duty-free sector by simplifying the regulations and granting duty-free operators increased autonomy. For the Canadian taxpayer, there is no public policy value or requirement to impose a strict regulatory regime on duty-free shops.  

The CBSA has been reviewing its Duty-free Shop Program to create a more effective program that meets today's business needs at the border. Results of this review will enable the duty-free sector to be more autonomous, thus allowing the CBSA to better focus its resources on its core mandates of safety, security and the facilitation of legitimate trade and travel. Through compliance monitoring, the CBSA will continue to ensure that duty-free products are for immediate export only and are not resold in the Canadian marketplace.

Consultations will continue with other federal and provincial government departments to determine the best approach to ensure a smooth transition. Similarly, ongoing discussions will continue with industry stakeholders to collaboratively work through any potential challenges.

Until the review of the Duty-free Shop Program is complete and the recommendations made public, the CBSA has placed a temporary moratorium on the issuance of new duty-free shop licences. However, existing licences will be renewed under the current legislation.