Shopping Online and Shipping to Canada

Costs to Watch When You're Having Goods Shipped Across the Canadian Border

Shopping online
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If you're on the Canadian side of the border and shopping online on U.S. sites, hidden costs may catch you by surprise. There are things you should check before you give out your credit card number.

First, check that the shopping site offers international shipping or at least shipping to Canada. There is nothing more irritating than going through an online store, filling your shopping cart and then discovering that the vendor does not ship outside the continental United States.

Shipping Charges to Canada

Good sites will list their shipping policies and procedures up front, usually under the customer service section or the help section. Shipping charges are determined by weight, size, distance, speed, and number of items. Be sure to read the details carefully. Don't forget to factor in the exchange rate for the shipping charges as well as for the cost of the merchandise. Even if the exchange rate is in your favor, your credit card company will likely also add a charge for currency conversion.

The shipping charges and methods of shipment (usually either mail or courier) aren't the total of the costs you'll have to pay to get that package across the Canadian border though. If goods are coming across the border, you will also have to consider, and be ready to pay, Canadian customs duties, taxes and customs brokerage fees.

Canadian Customs Duties

Because of the North American Free Trade Agreement (NAFTA), Canadians do not have to pay duty on most American and Mexican manufactured items. But be careful. Just because you buy an item from a U.S. store does not mean it was made in the United States. It's quite possible it was imported into the United States first and, if so, you may be charged duty when it comes into Canada. So check before you buy and if possible get something in writing from the online store in case the Canada Customs people decide to be particular.

Duties on goods vary widely, depending on the product and the country in which it was manufactured. In general, on goods ordered from a foreign retailer, there is no assessment unless Canada Customs can collect at least $1.00 in duties and taxes. If you have specific questions about Canada customs and duties, contact the Border Information Service during business hours and speak to an officer.

Canadian Taxes on Goods Imported Into Canada

Just about everything individuals import into Canada is subject to the Goods and Services Tax (GST) of five percent. The GST is calculated after customs duties have been applied.

You will also have to pay the applicable Canadian Provincial Sales Tax (PST) or Quebec Sales Tax (QST). The provincial retail sales tax rates vary from province to province, as do the goods and services to which the tax is applied and how the tax is applied.

In Canadian provinces with a Harmonized Sales Tax (HST) (New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario and Prince Edward Island), you'll be charged the HST, rather than separate GST and provincial sales tax.

Customs Brokers Fees

Fees for customs brokers services are the charges that can really catch you by surprise. Courier companies and postal services use customs brokers to get packages processed through Canada Customs at the Canadian border. Fees for that service will be passed along to you.

Canada Post is authorized to charge the recipient a handling fee of $5.00 for mail items and $8.00 for express mail items for collecting duties and taxes assessed by the Canada Border Services Agency (CBSA). If there is no duty or tax owed, they don't charge a fee.

Customs brokers fees for courier companies vary but are usually much higher than the Canada Post fee. Some courier companies may absorb the custom brokers fees (including them in the courier service price), depending on the level of courier service you have selected. Others will add the customs brokers fees on top and you will have to pay those before you can get your parcel. If you select a courier service for shipping to Canada, check whether the level of service provided includes customs brokers fees. If it is not mentioned on the online shopping site you are using, you can check the service guide on the individual courier company site or call the local number of the courier company to find out their policies.