American companies are increasingly looking North to Canada with a huge opportunity created online purchases. The "new NAFTA" USMCA/ CUSMA contains the important provisions to facilitate e-commerce orders shipped from the US to Canada duty free.
Canadian duty free import is possible thanks to the USMCA Free Trade Agreement.
* See note below on the new$150 duty free low value threshold to Canada from the USA under the USMCA.
NAFTA / CUSMA/ USMCA
While the new NAFTA - and its potential successor CUSMA/ USMCA - languishes for approval by the relevant legislatures, it remains the most important free trade agreement for the USA. Despite all the political rhetoric, the likely successor to NAFTA is essentially a minor update to a decades old agreement.
In this blog, we use the USMCA CUSMA wording interchangeably. The different names are a legacy of how much rancour there was in negotiating even the smallest elements of the new agreement. Read about the New NAFTA/USMCA/ CUSMA/T-MEC EFFECTIVE JULY 2020
New Certificate of origin updates of CUSMA
Shippers will benefit from new rules of CUSMA that replaces the need for a separate Certificate of Origin with a "Certification of Origin" that can be more easily implemented into existing shipping documents such as the commercial invoice. This easier administrative aspect is already available for US shippers sending goods to Canada valued under CA$3,300.
CUSMA for direct order parcel shipments
The benefit of duty free entry can be significant as Canadian import clearance costs can be substantial IS now more accessible for online orders shipped to Canada from the USA
At Jet Worldwide, we encourage our customers to consider taking advantage of the preferential duty free treatment when goods qualify as US origin.
CUSMA ADVANTAGES FOR SHIPPING E-COMMERCE ORDERS TO CANADA:
- Duty free and tax free entry for goods valued $50 CAD to Canada
- Duty free entry for goods valued under $150 CAD
- Simplified certification of origin statement for US origin goods valued under $3,300 CAD
For commercial goods valued at less than (CAN $3,300) the exporter may provide a statement certifying that the goods qualify as originating goods.
CUSMA COO process for parcels to Canada with low-value shipments
For low value shipments (mentioned above), a COO a shorter certifying statement added to the commercial invoice (or any shipping document) can be included to request preferential duty free status.
“I hereby certify that the goods covered by this shipment qualifies as an originating good for the purposes of preferential tariff treatment under USMCA/ CUSMA.”
Note: US Origin goods does not mean shipped from the US
The country of origin in USMCA CUSMA refers to where the goods are grown, raised or manufactured. In other words, goods made in China and sold online from a US website to Canada does not qualify as being of US origin under USMCA CUSMA rules.
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.
Duty free for Shipments valued under $150 CAD from the USA to Canada!
As mentioned above, 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 times, businesses can claim this charge back). This higher duty free threshold helps businesses and e-commerce merchants in the United States ship to Canadian customers.