Ottawa, March 6, 2009
Archived - Government Launches Consultations on a Proposed Arrivals Duty-Free Program at Canada's International Airports
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The Honourable Jim Flaherty, Minister of Finance, today launched consultations on the possible introduction of arrivals duty-free shops in Canada's international airports.
"During our consultations prior to Budget 2009, we heard suggestions that implementing an arrivals duty-free program could enhance the competitiveness of Canada's international airports and generate new sales and jobs at those airports," said Minister Flaherty. "To help us determine the feasibility and desirability of implementing this proposal, we would like to hear from those who have views on such an initiative and its likely effects."
Currently, individuals leaving Canada can buy goods at duty-free shops. The goods are relieved of taxes and duties otherwise applicable if they are immediately exported from Canada. Under the arrivals duty-free proposal, persons arriving in Canada on international flights would also be able to buy goods in duty-free shops. These goods would be subject to existing limits on the amount of duty- and tax-free goods that travellers can import into Canada. A backgrounder attached to this press release explains in more detail how duty-free shops currently operate and how an arrivals duty-free program might function.
All interested parties wishing to comment on the possibility of allowing arrivals duty-free shops in Canada's international airports should submit their views in writing by May 5, 2009 to:
Arrivals Duty-Free Consultations
Department of Finance Canada
Sales Tax Division, 16th Floor
140 O'Connor Street
Ottawa, ON K1A 0G5
Submissions should include, at a minimum, the following information:
- The name, address and telephone number of the person making the submission.
- The organization, if any, on whose behalf the person is making the submission.
- Reasons for the expressed support for, or opposition to, an arrivals duty-free program, including any potential economic benefits and other potential benefits or costs that the introduction of an arrivals duty-free program might have.
Following the consultation period, the Government will review the submissions that it has received, consider the issue carefully and announce its decision at a future date.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
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Duty-Free Shops and Proposed Arrivals Duty-Free Program
Duty-free shops are private sector retail stores that are located at various land border crossings and international airports across Canada. Duty-free shops in Canada are authorized to sell certain goods that are relieved of federal and provincial duties and taxes otherwise applicable to them, if the goods are sold to persons who are immediately leaving Canada. Tobacco products sold in duty-free shops are subject to a special federal duty. Examples of other products sold in duty-free shops include perfume, alcohol and jewellery.
The Canada Border Services Agency (CBSA) is responsible for administering the duty-free shop program in Canada.
Arrivals Duty-Free Shops
It has been suggested that the Government should allow duty-free shops to sell tax- and duty-relieved goods in the arrivals areas of international airports in Canada (arrivals duty-free shops). Under the proposal, both resident and non-resident air passengers arriving in Canada on an international flight would be able to buy these tax and duty-relieved goods after they disembark from the airplane but before they reach the customs entry point. The range of goods available in arrivals duty-free shops would be similar to the range of goods currently sold in duty-free shops, and tobacco products sold in arrivals duty-free shops would be subject to the same special federal duty that applies to tobacco products sold in departure duty-free shops.
Goods purchased in arrivals duty-free shops would be treated as imported goods when they are subsequently brought through a customs entry point and would be subject to existing monetary limits on the amount of goods that can be imported without paying applicable duties and taxes. For example, residents returning to Canada after an absence of at least seven days can import $750 worth of goods on a tax- and duty-relieved basis. In addition, goods purchased in an arrivals duty-free shop and brought to a customs entry point would be subject to existing restrictions on the amount of tobacco and alcohol that an individual can import into Canada without paying applicable duties and taxes. More information on these limits and importing goods into Canada can be found on the following CBSA Web page: http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html.