The "new NAFTA" is now a reality for shippers in Mexico, Canada and the United States. One of the focuses of the new North American Free Trade Agreement is e-commerce parcel imports to Canada. E-commerce online orders can be more shipped to Canada and benefit from preferential duty free clearance.
In this blog, we focus on the benefits for e-commerce parcel shippers to Canada from the US and Mexico.
Key CUSMA benefits for e-commerce orders shipping to Canada from Mexico and US:
- Higher low value duty free / tax free threshold to Canada to $40 CAD*
- Higher low value duty free threshold $150 CAD*
- Higher value for shipments to qualify for LVS parcel processes to $3,300 CAD
- Easier certification of origin for LVS shipments to Canada from US and Mexico
For a shipments shipped via USPS & Correos Mexican Post for import via Canada Post: The duty is free threshold is different than for parcels shipped via parcel carriers/ courier (mentioned above):
- CA $20 (around US$14.75) and under: duty and tax free
- Above CA $20 duties and taxes apply
Disclaimer: The information in this blog is for general information only. Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities prior to shipping.
Different Names, one North American Free Trade agreement
In this blog, we refer to the new North American Free Trade Agreement as CUSMA as it focuses on the new opportunities for e-commerce shipping to Canada and shipping from Canada to Mexico and the US.
Increased low value thresholds for duty free entry to Canada from Mexico and USA
Canada has substantially increased their low value threshold for goods imported from Canada and USA. This is particularly helpful for Canadian parcel imports cleared under the LVS system. Parcels containing goods less than CA$150 can be cleared duty free (but are subject to provincial sales tax). Goods valued under CA$50 benefit both from duty free and duty tax free.
Canadian duty free import from Mexico and the US is possible under USMCA/ T-MEC/ CUSMA.
CUSMA LVS Parcel Clearance Process to Canada Expanded
Canada parcel clearance processes or LVS (Low Value Shipments) System has been expanded to include parcels valued up to CA$3,300. Shipments valued under CA$3,300 (and not containing goods otherwise restricted) benefit from simpler LVA processes including not being subject to formal entries processes. A statement certifying the imported goods originate from the US or Mexico may be required.
USMCA CUSMA T-MEC makes it easier to ship individual orders to and from Canada to Mexico and the US.
New Certificate of origin updates of CUSMA:
The essential elements of duty free entry under NAFTA have been preserved under CUSMA.
NAFTA, USMCA, CUSMA, T-MEC Rules of Origin: Basically, if the item is grown, raised or made in the three North American countries, it can be transited duty free between the three North American Countries.
The rules of origin can get complex - especially when the goods contain non-North American origin parts and labour. The importer, exporter or producer are three parties than can certify origin. All should confirm with CUSMA experts to ensure their goods qualify as originating before shipping.
CUSMA has the added benefit of not requiring a separate Certificate of Origin. Rather, a "Certification of Origin" /COO can be included with the shipping documents (such as the invoice).
Required Date Elements for CUSMA Certification of Origin/ COO include:
- Indicate the status of the certifier (importer, exporter or producer)
- Certifier name, full address and contact details
- Exporter name, address and contact info (if different than certifier)
- Producer name, address and contact info (if different than certifier)
- Importer name, address and contact info (if different than certifier)
- Description of goods including HS tariff classification number
- Origin criterion
- Blanket date range of certificate (up to 12 months is permitted)
- Signed and dated by the certifier and accompanied by the following statement: “I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification.”
CUSMA COO process for parcels to Canada with low-value shipments
For low value shipments (see graphic below), a COO as outlined above is not required. In its place, customs will accept a shorter certifying statement added to the commercial invoice (or any shipping document):
“I hereby certify that the goods covered by this shipment qualifies as an originating good for the purposes of preferential tariff treatment under USMCA/T-MEC/CUSMA.”
CUSMA for direct order parcel shipments to Canada
The benefit of duty free entry for parcels to Canada from Mexico and the US is significant. Jet can assist shippers to send economy express from Mexico and the US to Canada and include reverse logistics processes.
Shipping to Canada from the US via low cost express with customs entry included can be the best solution for US origin goods valued under $3,300 CAD with a CUSMA certification of origin statement.