International Shipping Into Canada (Customs, Duties, Brokerage and Taxes!)
This post documents some guidelines on the frequently discussed subject of international shipping into Canada. So many deals out there come from other nations, typically the USA, Hong Kong, UK, which naturally means that buyers’ shipment will be exposed to scrutiny from the Canada Border Services Agency (CBSA). This is the agency that can add on taxes and duties.
The fees you pay will fall into three categories:
Taxes will be charged on all orders valued over CAD $20 (not including shipping.) The taxes are equal to Federal and Provincial taxes in your province.
Duties that depend on the type of goods and where the goods were made will be charged. For US and Mexico-made items, no duties apply due to NAFTA. Outside of that, the calculation is not simple and beyond the scope of this post.
Brokerage is the fee charged by the shipping company to deal with the paperwork and administrative process of clearing and accounting for the items through the CBSA, and paying the duties and taxes up front so the shipment can move on.
If the value of your order (not including shipping cost) is under $20 and it’s shipped by regular postal mail, you will not have to pay anything.
If you have to pay any of these things, the shipping guy will show up at the door asking for money before you get the package. (Some exceptions are listed below.) Have a cash or cheque ready, or give it to the front desk of your condo. If you’re not home or the receiver does not have money available, the shipment will fail and they will have to try again.
I came across this great little calculator that helps in calculating the actual dollar amounts paid depending on the shipping method: The Final Cost.
- There’s nothing you can really do to get out of taxes and duty, unless you feel like committing fraud, or trying your luck driving to a mailbox service in the USA.
- Taxes and duty are determined by the government, so they will not vary from one shipper to another.
- Brokerage is what can really catch you off guard. NEVER ship by UPS Ground! They have extremely expensive brokerage fees. UPS Worldwide Express Plus, UPS Worldwide Express, UPS Worldwide Express Saver, and UPS Worldwide Expedited Services do not have this problem (but tend to have a greater upfront cost.)
- Update (1): Please see the comments for a legal but labour-intensive method of avoiding paying courier brokerage.
- Update (2): Please see comments #96-#110 below from “Andy,” who has done a fantastic job of investigating the difference between “self-clearing” and “accounting” for your goods crossing the border. This very detailed chronicle will probably help numerous readers.
- Be careful of DHL as sometimes they will not ask for cash at the door, but the customs bill will arrive half a year later in the mail.
- Fedex and Purolator are more reasonable than UPS.
- If you or the receiver do not have cash on hand, you may be able to phone the courier company and pay the extra fees over the phone by credit card before the shipment arrives. It definitely works for UPS, but I don’t know about the others. Just be sure to do this after the shipment has cleared customs, otherwise the duties and taxes will not be known.
- Cheapest alternative is shipping by USPS because the brokerage will be done by Canada Post for a fixed cost of $9.95. (Price updated 2013)
- The CBSA can and will open your packages for screening purposes from time to time.
Stupid Things To Avoid
Here are some extra tips (aside from avoiding UPS Ground) that can save you from trouble.
- Don’t ship porn or gay/lesbian interest materials. The CBSA people arguably fancy themselves to be some kind of morality police.
- There’s a lot of other categories of sexual products they will reject, but I won’t get into the details or argue about whether or not the government should be the morality police in this blog. You can find this information if you need it. Just use your common sense.
- If the seller of some eBay or other forum item is promising to unconditionally pay the customs / duty fees, it’s probably a scam and the seller will likely vanish right after you make payment.
- Don’t get caught trying to get shippers to make false declarations, such as incorrect dollar values or gift declarations for non-gifts. The CBSA can re-assess the values of things, and will not believe your gift declaration unless certain conditions are met. If you get caught trying to scam something across the border, you may get onto the CBSA hit-list and be subject to more frequent and stringent screening.
Here are a few exceptions to the rules above:
- Shipments from Amazon.com into Canada for items that are actually shipped and sold by Amazon.com have all customs-related charges included in the checkout price, so you won’t be paying extra at the border. Be careful here because many items at amazon.com are actually sold by and shipped from other companies. Read the listing carefully.
- TireRack.com is in the same category as Amazon.com.
- A few other companies fit this profile, and you can find this out from their own FAQs.
- Products shipped into Canada due to repair / replacement / warranty / etc. will not be charged duties or taxes because they are not a new item. However you can still be charged brokerage on these $0 fees. (Beware UPS Ground as usual.)
- If the taxes and duties added on were genuinely incorrect, you can appeal the fees. If you shipped through USPS / Canada Post, the form is on the back of the CBSA papers attached to your shipment. Otherwise, follow the dispute procedure, which should lead you to Form B2G.