Arrivals Duty Free

Around 50 countries around the world have Arrivals Duty Free (ADF), which allows international travellers to by products free of duty upon arrival at their destination.  Canada does not currently have ADF, but would be realize economic and tax revenue benefits by implementing it.

Canadian airports depend on retail operations to maintain their global competitiveness and duty free sales at Canadian airports have been hard het by the liquid and gel bans on carry on items, as well as the growth in ADF overseas.

Currently, Canadian Federal duty-free related laws and regulations (the Customs Act and Duty Free Shop Regulations) do not permit the sale of duty free goods upon arrival at Canadian airports.  Duty free sales in Canada are only available for travellers who are about to leave Canada.  This creates a competitive disadvantage for Canadian airports and reduces the potential revenue that could be generated from international arriving passengers.

Looking at the experience in Australia and other markets with ADF, the CAC believes that the introduction of ADF primarily would result in the repatriation of duty free purchases that would otherwise take place at the foreign departing airport.  If given a choice between having to carry a foreign-purchased duty free goods on their trip or purchase the item on arrival, most travellers would choose the latter.

Airports believe the introduction of ADF would have immediate benefits for the Canadian economy and tax base.  Duty free sales are estimated to increase $61 million a year, resulting in 400 new Canadian jobs, about $12 million a year in increased wages and $3.7 million in increased taxes.