Canadian airports must wait for arrivals duty-free

Gavin Lipsith

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The Canadian government’s budget has omitted recommendations for the national Excise Act to be amended to allow for airport arrivals duty-free shops

The Canadian government has ignored a recommendation by the House Standing Committee on Finance to amend the country’s Excise Act to allow for arrivals duty-free shopping at airports. The proposal was left out of the country’s budget announcement for 2008.

The Canadian Airports Council (CAC) had submitted several proposals to the committee, including one that arrivals duty-free be allowed as it would have tax benefits of up to C$10m for the government and increase the competitiveness of Canadian airports. The finance committee accepted the proposal and recommended it as part of its submission to the government ahead of the 2008 federal budget, but the government did not include it in their budget plans.

CAC president and CEO Jim Facette welcomed budget provisions for aviation and border security funds, but said that Canada’s airports “face significant competitive challenges…and reform to the C$300m a year airport rent regime and the introduction of arrivals duty-free are two notable ways in which the government could have addressed these challenges”.

Canada charges airports a rent based on the revenues they generate, and CAC is arguing for the definition of revenue to be altered to make the rent less burdensome for airports.

CAC director of communications Daniel-Robert Gooch told DFNIonline that the omission from the budget—which follows similar omissions in previous years—did not necessarily mean that the arrivals duty-free would be off the agenda for another year. He said: “It is a recommendation to amend the Excise Act that can be taken up at any time—although the budget is a natural place for it to be contained in.”