Government delivers blow to Duty Free

    OTTAWA, March 20 /CNW Telbec/ - The Frontier Duty Free Association
representing duty free shops across Canada says getting rid of the individual
traveler component of the GST/HST Visitors' Rebate program in the 2007 Budget
is a serious blow to retailers and communities that rely on tourism for their
    "Our studies show that the Visitor Rebate Program generated significant
tourist spending in Canada" says Chuck Loewen, Vice President of the Frontier
Duty Free Association and General Manager of Peace Bridge Duty Free Shop, "and
to border communities and retailers such as duty free shops, the loss of the
individual traveler rebate is devastating. The new Foreign Convention and Tour
Incentive Program announced in the budget in no way replaces the Visitors'
Rebate Program provision for rebates to individual travelers."
    Over the past several months, the FDFA has been part of a coalition that
fought a pitched battle to save the VRP. Presentations to government and a
series of press conferences held across the country sought to demonstrate how
canceling the program would hurt jobs and communities.
    "It is disheartening that the government did not hear us on how critical
the VRP is to encouraging tourist spending in Canada," adds FDFA Executive
Director Laurie Karson. "Not only did the program provide a powerful incentive
for tourists to make purchases in Canada, but over half the visitors who
received instant rebates spent the money immediately putting cash right back
into the Canadian economy. The loss of that revenue alone is going to have a
huge impact."
    The cancellation of the program effective March 31, 2007, right at the
beginning of the summer tourist season, could not come at a worse time. The
number of U.S. visitors to Canada has fallen 34% in the last twelve months,
and U.S. traffic to Canada is now at its lowest level since record-keeping
started in 1972. Canada's travel deficit - the difference between spending by
Canadians abroad and spending by foreigners in Canada - has hit an all-time
high of $7.2 billion. Cancellation of the program is not calculated to improve
these results.
    At a time when other countries competing for tourist dollars are
expanding their rebate programs, Canada now has the dubious distinction of
being the only OECD country to cancel a value-added tax rebate program.

For further information:

For further information: Laurie Karson, Executive Director, Frontier
Duty Free Association of Canada, (613) 233-1946, Cell: (613) 868-6369,; Chuck Loewen, Vice-President, General Manager, Peace Bridget
Duty Free, Fort Erie, Frontier Duty Free Association of Canada, (905) 871-5400
ext. 106,

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Frontier Duty Free Associaton

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