Custome and Duties Brief (For Canada Buyers)

When shipping from the USA to Canada, customers can expect to pay several types of duties, taxes, and fees, which are determined by the Canada Border Services Agency (CBSA). These costs depend on factors like the item’s value, type, origin, and shipping method. Below is a breakdown of the expected fees and strategies to minimize them, based on current regulations and practices as of June 2025.

*Skip to end (Conclusion) for what we think is best based on data*

1. Customs Duties

• What Are They? Customs duties are tariffs imposed on goods imported into Canada. The duty rate varies based on the item’s Harmonized System (HS) code, which classifies goods, and the country of origin.
• Exemptions:
• Goods valued under CAD $20 are generally duty-free (except for items like alcohol or tobacco).
• Goods valued under CAD $40 shipped via courier from the USA or Mexico may be duty-free.
• Gifts valued at CAD $60 or less are duty-free, but duties apply to the amount exceeding CAD $60.
• Example: A CAD $100 clothing item made in China but shipped from the USA may incur a duty of 18% (CAD $18) unless it qualifies for CUSMA exemptions.

2. Goods and Services Tax (GST) and Other Sales Taxes

• GST: A 5% federal tax applies to most goods imported into Canada, calculated on the item’s declared value (including duties).
• Provincial Sales Tax (PST) or Harmonized Sales Tax (HST):
• PST applies in provinces like British Columbia (7%) or Saskatchewan (6%), varying by province.
• HST, a combination of GST and provincial tax, applies in provinces like Ontario (13%) or New Brunswick (15%).
• Exemptions: Goods valued at CAD $20 or less are GST/PST/HST-free, as are gifts under CAD $60 (except alcohol/tobacco).
• Example: For a CAD $100 item with no duty, GST would be CAD $5. In Ontario, HST (13%) would be CAD $13 instead of GST.

3. Brokerage and Handling Fees

• What Are They? These are fees charged by couriers (e.g., UPS, FedEx) or Canada Post for processing customs clearance, including paperwork and payment of duties/taxes.
• Costs:
• Canada Post: Charges a CAD $9.95 handling fee per dutiable/taxable item.
• Couriers: Brokerage fees can range from CAD $10 to $100 or more, often based on the shipment’s value. For example, UPS may charge CAD $36 for a small package.
• Avoiding High Brokerage Fees: Customers can self-clear parcels at a CBSA office to avoid courier brokerage fees, paying only the applicable duties and taxes.

4. Shipping Costs

• Shipping fees vary by carrier (e.g., USPS, UPS, FedEx) and method (air, ground, expedited). These are separate from customs duties and taxes but contribute to the total landed cost.
• Ground shipping (e.g., UPS Ground) often incurs higher brokerage fees than postal services like USPS/Canada Post, making the latter a potentially cheaper option despite similar shipping rates.

5. De Minimis Thresholds

• Duty-Free: Goods valued under CAD $150 via courier from the USA may be duty-free, but taxes (GST/HST) still apply if over CAD $40.
• Tax-Free: Goods under CAD $40 via courier or CAD $20 via mail are typically exempt from both duties and taxes, except for restricted items like alcohol.
• Note: Splitting a single order into multiple shipments to stay under these thresholds is not allowed and may lead to penalties.

6. Additional Considerations

• Recent Tariffs: As of 2025, Canada has imposed 25% tariffs on certain US goods in response to US tariffs on Canadian steel and aluminum. This affects items like vehicles, auto parts, alcohol, and consumer goods with non-CUSMA content, increasing costs.
• Prohibited/Restricted Items: Items like firearms, certain foods, or luxury goods may face additional excise taxes or restrictions, leading to higher fees or confiscation.
• False Declarations: Understating the value of goods to avoid fees can result in fines (25-80% of the item’s value) or seizure.
• Currency Conversion: Duties and taxes are calculated in Canadian dollars, so exchange rates affect the final cost.

7. Strategies to Minimize Costs

• Leverage CUSMA: Ensure goods qualify for duty-free status under CUSMA by confirming their origin and including a Certificate of Origin.
• Use Postal Services: Canada Post often has lower handling fees (CAD $9.95) compared to courier brokerage fees.
• Self-Clear at CBSA: Visit a CBSA office to clear parcels yourself, avoiding courier brokerage fees.
• Plan Shipments: Keep shipment values under CAD $40 (or CAD $150 for duty-free courier shipments) where possible, but avoid splitting orders to game thresholds.
• Use Shipping Platforms: Platforms like Easyship or Shippsy can calculate duties/taxes upfront and offer package consolidation to manage costs.
• Delivered Duty Paid (DDP): Opt for services like GlobalPost’s Canada DDP, which prepays duties and taxes for a flat fee (e.g., CAD $9.95 for USPS shipments up to CAD $500), avoiding surprises at delivery.

8. Example Calculation

• Scenario: A customer buys a CAD $100 electronic device (made in the USA) shipped via UPS Ground from the USA to Ontario, Canada.
• Duty: 0% (CUSMA-eligible, made in USA).
• HST: 13% (Ontario) = CAD $13.
• Brokerage Fee: Approx. CAD $20–$36 (based on UPS rates).
• Total Fees: CAD $33–$49 (HST + brokerage), plus shipping costs (e.g., CAD $20–$50).
• Total Landed Cost: CAD $153–$185 (item + fees + shipping).

9. Practical Tips for Customers

• Check CBSA’s Duty and Taxes Estimator: Use the CBSA’s online tool to estimate costs before purchasing.
• Request Seller Transparency: Ask US sellers to provide a detailed commercial invoice with accurate HS codes and declared values to avoid delays or disputes.
• Consider Cross-Border Pickup: Ship to a US address near the border (e.g., Champlain, NY) and clear customs yourself to avoid brokerage fees, declaring the item under personal exemptions if applicable (e.g., CAD $200 for 24+ hours abroad).
• Contact CBSA for Disputes: If you believe duties/taxes were miscalculated, contact CBSA at 1-800-461-9999 or request an adjustment via their website.

10. Sentiment from X Posts

• Recent posts on X highlight frustration with high brokerage fees (e.g., CAD $36 on a CAD $35 item) and surprise charges at delivery, particularly with couriers like UPS. Customers feel “extorted” by fees that sometimes exceed shipping costs and prefer postal services or self-clearing to avoid them.

Conclusion

Customers shipping from the USA to Canada should expect to pay GST/HST (5–15%), potential duties (0–25%, depending on CUSMA eligibility and item type), and brokerage/handling fees (CAD $9.95–$100). Exemptions apply for low-value items (CAD $20–$40) or gifts (CAD $60).To minimize fees, use postal services, self-clear at CBSA, or leverage CUSMA exemptions. Always check CBSA guidelines or use platforms like Easyship for accurate cost estimates. 

 

Data: