Shipping to Canada
More than ever, Canadian companies want to find better ways to connect with their suppliers while international companies are seeking access to the Canadian market.
Categories of Shippers to Canada include:
- Individuals Shipping to Friends and Relatives in Canada
- Canadian companies who are ordering from an international supplier
- International Companies seeking access to the Canadian market
For many small businesses and individuals, the process of receiving international orders to Canada happens largely behind the scenes. For many, receiving international orders is simply a matter of paying import fees charged by the post officer or carrier. However, it is important – especially for growing Canadian businesses – to understand the import process in order to find ways to minimize costs.
All shipments to Canada must clear Canadian Customs. Individual orders from online suppliers are often imported on the importer’s behalf using the Canadian Border Services Agency’s Courier Low-Value System (LVS) system. The LVS processes allow for goods to be conditionally released for delivery prior to final processing and payment of import fees,. Most parcels shipped via courier valued under CA$3300 are eligible for LVS clearance.
If you are a foreign company wishing to ship to Canada, you may be able to integrate the import process into your regular shipping by registering as a "foreign importer of record". In doing so, you can more easily ship goods in bulk to your Canada customers.
Carrier Options for Shipping to Canada
As it is in all shipping, the “what” determines the “how”. At Jet Worldwide, our specialty is the import of individual orders shipped via air parcels or pallets by companies of all sizes; large companies that need processes to complement their logistics and small companies who need innovative solutions.
The global options for International shipping to Canada include:
- Parcel Post: This is the best option for individuals shipping to Canada, especially if you’re making small shipments. Importing to Canada via the postal service is often less subject to oversight and fees. However, as technology evolves, increased security and intellectual property protection efforts are regularly changing the process.
- Global Carriers: FedEx, UPS and DHL are global brands that offer international air shipping to Canada with integrated pickup, delivery and clearance.
- Freight Forwarders: When shipping large commodities and ocean containers, freight forwarders and "third party logistics" (3PL) providers are often the best option.
- Specialized Carriers and; Resellers: Jet Worldwide has the global and regional partnerships as well as the international expertise, to assist you with low cost solutions for your specialized imports and distribution services.
- Customs Brokers: Customs brokers are licensed by the Canadian Border Services Agency (CBSA) and are allowed to submit an entry on behalf of an importer who grants them that authority. Brokers can be particularly useful for higher value shipments and complex entries. It is important to note that companies do not have to use a customs broker.
Often international suppliers have preferred shipping options that can be bundled with the order. Alternatively, Canadian companies often are responsible for arranging for transport or prefer at least to get a comparison quote.
Regardless of the carrier or method of transport or carrier, the receiver of the goods are responsible for the proper import declaration and payment of duty and taxes.
Describing Your Items
It’s useful to research the items you are purchasing and understand the relevant data points for import, including the item’s:
- Product Description and; HS Code: Canada adheres to the globally recognized Harmonized Tariff System which manages the widely used Harmonized Tariff System Code. An item’s HS Code determines its duty, admissibility, and whether or not it should be physically examined. Check out our blog on HS Codes.
- Country of Origin: Depending on the country where the goods were manufactured, they may qualify for preferential duty free import to Canada under one of Canada's many Free Trade Agreements.
- Export Requirements: Even though export requirements are the responsibility of the international seller or shipper, it is useful to understand that some goods shipped to Canada may be subject to export requirements.
- An important example of export requirements, is the shipping of personal protective equipment (or PPE) from China, like masks, gloves and gowns. In an effort to ensure the quality of these goods, the Chinese government has imposed specific export processes that can cause significant delays and costs.
- Valuation: More often than not, when you are asked for the value of the goods you are shipping, you’re being asked for the item’s Transaction Value or Declared Value. Meaning, the actual cost of the item. The declared value to Canada customs is most often the Transaction Value - or the price paid. The valuation can become less clear when, for example, a supplier is shipping you free samples or warranty parts. In this case, it’s best to use the value of similar items, as a zero dollar value won’t be accepted at customs.
Understanding Import Fees
- Canadian Duty: Canadian duty is assessed primarily on the item’s HS Code, Country of Origin and Valuation. Canadian duty rates can be obtained through the CBSA and other websites.
- Provincial and Federal Taxes to Canada: The Goods and Service Tax (GST) is the Canadian national tax and is about 5%. Depending on the importing province, and their taxes, you’re looking at a total of up to 15% in Provincial and Federal taxes.
- Brokerage Fees: Customs brokers import fees may include entry preparation, bond and disbursement.
- Carrier Disbursement Fees: Goods shipped via air courier typically include entry preparation but are subject to a Disbursement Fee paid on behalf of the importer, which is usually around 2.5% on the duty and taxes. The minimum Carrier Disbursement Fee is $15.
In most cases, items ordered to Canada are sold Delivery Duty Unpaid (or DDU*). The Canadian buyer is responsible for payment of import fees even if shipping is included. International shippers who send, for example, samples or warranty parts to Canada may want to consider shipping their goods Delivery Duty Paid (or DDP*).
*DDU and; DDP are terms known as Incoterms®., a registered trademark of the International Chamber of Commerce / ICC. It is useful to at least understand the existence of Incoterms and visit ICC’s website if further explanation is needed.
Shipping to Canada from the USA and; Mexico
Due to the sheer volume of trade (billions of dollars each day!), the NEW North American Free Trade Agreement between Canada, the USA and Mexico works a little differently. Much of the trade that happens between the three countries is large commodity trade via truck and rail under the specific rules and guidelines of the New NAFTA (also known as the USMCA/CUSMA/T-MEC). The proximity between them enables low-cost ground shipping, allowing shippers to choose between Parcel Post and Global Carriers.
Shipping to Canada from the Rest of the World
As international e-commerce has grown, so has the demand for shipping to Canada from the rest of the world. Canada's largest trading partners beyond the US and Mexico include: China, India, Japan, South Korea, Saudi Arabia, the European Union, the UK and Australia. Fortunately, Canada has Free Trade Agreements with most of world's leading economies:
- Germany, France, Italy and European Union countries: CETA
- Japan, Australia, Singapore and other Asia Pacific Countries: CPTPP
- South Korea: CKFTA
- Individual Trade Agreements with many other countries
Importing to Canada has never been easier. Online e-commerce technologies and ever evolving Free Trade Agreements are connecting suppliers and customers across borders. Jet Worldwide is proud to continue our mission of connecting people, parcels and businesses around the world.
Managing Canadian Returns
International companies shipping to Canada need a solution to manage returns. This can be as simple as having a Canadian address to where the goods can be sent to for full logistics support including restocking, product kitting, repacking and reconditioning.