If you’re a Canadian looking at purchasing products in the United States you know how confusing all this talk about taxes and duties can be. So to help you navigate through the fog I’ve put together a handy little guide so you can find what you really want to know.
Taxes – Every Canadian crossing the border back into Canada must pay the applicable taxes and duties on the products they wish to import. (NOTE: If you ship to a KinekPoint along the border and bring back the item yourself, instead of shipping it across, you are much less likely asked to pay duty) The taxes you pay depend on the province you are crossing back into:
- Alberta – 5%
- Saskatchewan – 10%
- Manitoba or British Columbia – 12%
- Quebec – 12.875%
- Ontario or New Brunswick – %13
Duties – Duty may also be levied on items that you wish to import into Canada. If the product was made in Canada, the United States or Mexico there will be no duty because of NAFTA. But if the product was made in any other country there could be duties imposed ranging from 5-30%. There are also many items which are always exempt from duty including gifts valued under $60, video games, cellphones, downhill skis, and fish egg incubators. Some other common items and the applicable duty percentages (if not manufactured in a country we have a free trade agreement with) are as follows:
- Automobile tires – 7% (however motorcycle and bicycle tires are duty free!)
- Car parts – ~6%
- televisions – typically 5%, if made in South Korea (e.g. Samsung) 3%
- clothing – 6.5% to 13%
You can take a look at the complete list of duty percentages for every imaginable item provided in the Customs Tariff Depertmental Consolidation 2010 PDF file, or if you’d prefer not looking through over 1800 pages of mind numbing data I’d recommend calling Border Information Services toll-free at 1 (800) 461-9999 to ask about specific items.
Personal Exemption – However depending on how long you have been in the States you may qualify for a personal exemption (The value of goods you can bring back duty free and tax free to Canada)
- 24 hours – $50 exemption
- 48 hours – $400 exemption
- 7 days – $750 exemption.
This Canada Border Services Agency website will have some other helpful info and the most up to date exemption information.
Shipping into Canada – One way to get products from the US into Canada is through the mail or courier. Your order will arrive at your doorstep but there are some downsides including expensive international shipping and exorbitant brokerage fees. Here is a link to UPS brokerage fees, note that on top of the brokerage fee they charge a 2.7% disbursement fee (minimum $5.85) and another $4.25 that they will collect on delivery because you’re paying for these services after the fact. Say you buy a couple books for $45, you will pay $19.45 in brokerage, $5.85 in disbursement and $4.25 for COD. Your $45 of books just became $74.55, and that doesn’t include shipping! FedEx doesn’t have any fees listed on their website. These fees are one of the many reasons why Kinek’s border locations are becoming so popular.
Small to Medium-Sized Businesses
When you get into importing goods into Canada for commercial purposes there are a host of other rules and regulations you have to take into consideration. Without cluttering this post I will simply direct you to the Canadian small and medium-sized enterprise center on the Canada Border Services Agency website that will either show or link you to everything you need to know. One thing you won’t find there is a mention of the brokerage fees charged to get your item across the border. Once again, just like for the consumers, shipping your goods to a KinekPoint location and picking them up to clear customs yourself is a viable solution for small businesses looking to make their money go that much farther.
Related Article: Importing a Vehicle into Canada