Importing e-commerce orders to Canada is growing with new technologies and import processes. It is important for both e-commerce sellers and buyers to understand the potential imports costs to Canada.
Even though Canada has free trade agreements with most major countries, duty free access is limited based on value and country of origin. Canadian import fees beyond duty include entry preparation, federal and provincial taxes and carrier disbursement fees. All are covered below.
In this post, our team reviews the issues that can affect your import fees to Canada, including:
- How does the value of the goods affect duty status for shipments to Canada
- Import benefits from USA and Mexico versus from rest of world
- Importing printed matter to Canada
- Duty free threshold for shipments from the US and Mexico
- Valuation for e-commerce and parcel imports from rest of world
- Free Trade Agreements and preferential duty free import for e-commerce
- Country of Origin and preferential duty import to Canada
- Other fees and costs related to import costs
- A consolidated list of common import fees to Canada
- Canadian customs CBSA assessment and revenue portal (CARM)
- About Jet Worldwide
- Information needed for an international shipping quote to / from Canada
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Factors that affect import fees to Canada
The factors that can affect import fees to Canada can include:
- From where the goods are shipped (see chart below)
- Value of the consignment (read more about valuation)
- Country of origin (where the goods were made)
- Harmonized code of the goods (read more about HS Codes)
- Final destination of Canada (provincial sales tax)
- Carrier and and method of shipping
Importing from the USA versus from Rest of World
The key difference when importing to Canada from the USA (and Mexico) versus the rest of the world is the USMCA/ CUSMA free trade provisions related to the duty free threshold. The default duty free threshold to Canada is CA$20 , but goods shipped from the USA and Mexico benefit from higher duty free and tax free threshold.
The advantages of USMCA/ CUSMA for goods imported from the USA and Mexico include:
- Duty free and Tax free eligibility for imports valued under CA$40
- Duty free eligibility for imports valued under CA$150
- Duty free eligibility for goods that qualify as USA and Mexican origin regardless of value*
* Note: In addition to USMCA, Canada has major free trade agreements with most of the world's leading economies. See section below for more details.
Even with the USMCA / CUSMA North American free trade, all shipments from the USA are subject to import clearance, duty and taxes.
The Most Favoured Nation (MFN) tariff rates of Canada are generally applicable to imports from all countries.However, shipments that meet rules of origin can qualify for preferential duty free import via the terms of the trade agreement.The MFN tariff rates of Canada apply to goods imported to Canada that do not meet the rules of origin (non-originating goods) under a Canadian free trade agreement. See section below on Canada's other free trade agreements.
Importing documents, books and other printed matter to Canada
Shipments containing printed matter or documents are not subject to Canadian duty. Provincial sales tax may apply when items with a commercial value, such as books, are being imported.
When shipping documents to Canada, it is best to use a minimal declared value (see next section on duty free import).
Printed matter including books, brochures and leaflets can be imported to Canada duty free.
- Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets: HS Code 4901.00.00.00
- Dictionaries and encyclopaedias: HS Code 4901.91.00.00
Local Print and ship services: Contact Jet's team if you wish to have a file printed and shipped within Canada for a single document or on demand printing options
Duty Free Threshold for importing parcels e-commerce orders to Canada
The default "duty free threshold" to Canada is CA$20. But - as mentioned above - can be higher if shipped from the USA or Mexico.
Duty Free Threshold to Canada for goods shipped from Mexico and USA
Thanks to Canada's free trade agreement (USMCA/ CUSMA/T-Mec), the duty free threshold for goods shipped via courier from the USA and Mexico to Canada is CA$150. Goods valued under CA$40 from the USA and Mexico can be cleared free of both duty and taxes.
As part of the USMCA (the "new NAFTA), Canada has raised their low value duty threshold ( de minimis threshold) to $150 CAD (around $110 USD). Local sales taxes will still apply (but often businesses can claim back for sales tax).
The duty free threshold for goods shipped via USPS and Mexican post remains at CA$20.
Duty Free Threshold to Canada for goods not shipped from Mexico and USA
The default duty free threshold of CA$20 (mentioned above) applies to imports to Canada. Shipments valued above this threshold are subject to both duty and taxes.
Valuation of e-commerce orders for Import to Canada
The valuation of goods - especially e-commerce orders - to Canada is getting more attention. Experts estimate that the majority of e-commerce orders from Asia are undervalued to ensure they benefit from the CA$20 duty free threshold. So far, Canadian authorities are surprisingly accepting of this process but we anticipate enforcement will start in much the same way it has in Europe and the UK.
Free Trade Agreements and Duty Free Canadian Import for E-commerce
Canada has free trade agreements with most of the world's major economies. In addition to the USMCA/CUSMA mentioned above, Canada's major free trade agreements include with Europe (CETA), UK (UKTCA), Asia Pacific region (CPTPP), along with agreements with individual countries such as South Korea (CKFTA).
Canada's newest trade agreements make it easier to request preferential duty free import for qualifying origin goods. In most cases, an origin declaration can be included on the shipping paperwork (most often as part of the customs invoice).
Read More: Canada's free trade agreements
E-commerce orders and parcels imported from countries that have a free trade agreement with Canada can benefit from preferential duty free import. Goods valued under CA$3,300 benefit from less burdensome certification of origin declarations and processes.
It is important to mention that goods that are shipped from a country does not automatically qualify them for duty free import under a free trade agreement.
Ship from ≠ Country of Origin
Each trade agreement has different rules related to country of origin but, generally speaking, the country of origin refers to where the goods were manufactured, grown or raised (in the case of agriculture). For example, an item shipped from Australia that was made in China would not quality for duty free status even though Australia and Canada share a free trade agreement (CPTPP).
Duty and other Import Fees to Canada
Canadian import duties are based on the following three factors:
- Value of the goods (read more about valuation)
- Commodity/ HS code (read more about HS codes)
- Country of origin (refers to where the goods were made, grown or raised)
Even if the goods imported qualify for duty free status, the other fees to consider are the entry preparation fee, Canadian federal/provincial sales tax and carrier fees.
For goods imported via express courier, the entry preparation fee is usually included. Goods shipped to Canada via FedEx or UPS ground are subject to an entry preparation fee.
Common Canadian Import Fees for E-commerce
Common import fees for consignments shipped via air to Canada can include:
- Duty: Items that do not otherwise qualify for preferential or MFN duty free import are assessed duty (see section above).
- Tax: All imports to Canada are subject to both federal and provincial sales tax.
- Entry preparation fee: This fee is included for most shipments sent via express courier to Canada. Consignments that require non-standard entries or shipped via ground or surface are most often subject to entry preparation fees, import bond and other brokerage charges. See graphic below for representative entry preparation fees for ground shipments from the USA.
- Carrier Disbursement Fee: Most carriers charge a fee for prepayment of duty and tax between 2-3% of the amount paid on behalf of the consignee (with a minimum charge between CA$10 and CA$20).
Note: The above chart are sample entry preparation fees for ground shipments from the USA to Canada. The actual fees vary by carrier and can be negotiated lower for high volume importers. Check with your carrier for details.
The Canadian Customs online portal which is designed to streamline processes and a useful too for Canadian importers.
Other things to consider when shipping to Canada include:
- Importer of record: The importer of record includes having to obtain an importer number. If to direct to consumers, the consumer can be the importer of record
- Provincial licenses may be required even if selling direct to consumers.
- Health Canada approvals for related products
- Safe Foods for Canadians Act certifications for some food items
- Federal and provincial sales taxes (read about Canadian import fees)
- Tariff classification for all imports (read more about HS Codes)
- Country of Origin must be declared for all imports.
- Valuation is an important part of the declaration to the CBSA (read more about valuation).
- Labeling for goods to Canada may require both French and English.
- Certification of origin if duty free import requested under a FTA
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