Duty-free shops struggle to make ends meet as Canadians steer clear of U.S. 

If business doesn't pick up soon at his duty-shop, Éric Lapointe says he's going to have to lay people off. 

"I've had three customers today so far," the store owner told As It Happens host Nil Kӧksal on Friday afternoon. "It's a fraction of what we normally have at this time of the year."

Lapointe says business is down 60 per cent over the same time period last year at the Boutique Hors Taxes de la Beauce near Quebec's border with Maine. 

He's not alone. Duty-free shops across the country, still recovering from pandemic travel restrictions, are reporting massive drops in business in recent months as Canadians increasingly avoid travelling to the U.S.  

Licensed by the the Canada Border Services Agency at 52 land border and international airports in Canada, duty-free stores sell products, including tax-free booze, to cross-border travellers, and are legally unable to pivot to deliveries or online sales. 

"If we have nobody that travels in the U.S., we have no customers," Lapointe said.

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, which represents 32 such stores.

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

The number of return trips among Canadians travelling to the U.S. in March plummeted compared to the previous year, according to Statistics Canada. Air travel dropped by 13.5 per cent while land travel fell 32 per cent.

The drop coincides a pivot to domestic tourism as U.S. President Donald Trump launches a trade war with Canada and other countries, and makes repeated threats to Canada's sovereignty. 

Several Canadians also told CBC they've cancelled trips because they fear heightened scrutiny by U.S. border guards, something the Canadian government has warned travellers about. 

Canadian Jasmine Mooney was recently locked in a U.S. detention facility for 11 days over difficulties with her U.S. visa renewal application, and has since described being kept in harrowing conditions. Two German tourists and a backpacker from Wales have also been detained in recent months. 

What's more, the dip in cross-border land travel goes both ways. Car visits by U.S. residents dropped 11 per cent last month compared to a year earlier, the second straight month of year-over-year declines.

"It's like the Americans are shy to come to Canada," said Philippe Bachand, who runs a duty-free store south of Montreal, pointing to the boos that American sports teams have received in Canada. "It's not welcoming."