By: David Cameron
The main hurdle to Canadian online shopping is the uncertainty of shipping costs. These costs are predictable and you shouldn't fear them. In most cases the shipping, taxes and duty are unavoidable but at least there will be fewer surprises if you read this page carefully.
Before you even start shopping on a merchants web site, there are a few things that you should check right away! Does the merchant ship to Canada? You can usually find this information by looking at the Customer Service, Help or Shipping page. If the merchant doesn't mention that they ship internationally or to Canada - stop shopping on that site. Some merchants will clearly state that they do not ship to international destinations. These merchants obviously don't want your business. (All merchants on CanBuy.ca ship to Canada - but some are better than others. Just read on...)
1) What Taxes and Duties to expect when shipping to Canada
(go there now)
2) What is a brokerage fee? (go there now)
3) How to avoid the Brokerage Fee (go there now)
4) Shipping Fees (go there now)
5) What if it's a Gift? (go there now)
6) Shipping Methods You Should Avoid (go there now)
7) CanBuy.ca Preferred Shippers (and why) (go there now)
8) What to look for when investigating a merchant (go there now)
9) Free shipping to Canada (go there now)
Any goods entering into Canada will be subject to the Federal Goods and Services Tax (GST) as well as the applicable Provincial Sales Tax (PST). In Quebec this is also known as the Quebec Sale Tax (QST). In Nova Scotia, New Brunswick, and Newfoundland and Labrador the GST and PST is replaced by the Harmonised Sale Tax (HST).
Currently the Goods And Services Tax (GST) is currently 5%. This may go even lower in years to come. Provincial Sales Taxes vary from province to province but just be aware that it will be added at the border. If you live in Nova Scotia, New Brunswick, or Newfoundland and Labrador you will pay a flat 13% Harmonised sales tax.
Thanks to the North America Free Trade Agreement (NAFTA), Canadians do not have to pay extra Duties (tax or tariff) on most goods that are manufactured in the United States or Mexico. Sounds great right? Well be very, very careful. The items that you are purchasing from that American online store may not have been produced in the USA or Mexico so it will be eligible for international duties. It is a very good idea to check with the online store that you are buying from and determine if the product has been imported from a country other than the USA or Mexico. If it was in fact produced in the USA try to get something in writing from the online Merchants just in case Canada Customs decides to investigate your purchase closely.
Duties on various goods and products will be different depending on what it is and where it was produced. There may also be additional excise duty or excise tax on luxury items such as Jewelry. If you have any questions, it is best to contact the Canada Border Service Agency Office or the Canada Border Information Service directly.
Brokerage Fees are usually the biggest surprise for most people when their online purchase finally arrives at their front door. A Customs Broker is a middleman who represents you by being the person who brings your package across the border. Essentially he is your employee. You pay him a percentage of the shipment's value or a minimum handling fee. The Customs Broker completes the paperwork (usually a single form stating the package's contents and value) and sends this form and the applicable duty and taxes to the Government. If you ship by air, the Brokerage Fee is usually included in the air shipping fee. (Shipping by air is usually always more expensive)
There is a little known fact that it is possible to not pay the Brokerage fee! If you live close to a major border crossing, you can save the Brokerage Fee by clearing your package through Canada Customs yourself! It will take a little extra time but depending on how the package has been shipped, you could save yourself a lot of money. All you need to do is fill out the paperwork yourself and take it to a Canada Customs Office and pay any applicable tax or duty.
Here is what you will need:
1. The Waybill from the courier company
2. Invoice for the Goods being delivered (to prove the value of your delivery)
3. A piece of Photo ID (to prove who you are)
4. Money (You will still need to pay tax/duty charges)
Here is what you do:
1. When you know that your purchase is on the way, get the tracking number from the seller
2. Call the courier company and tell them you want to broker it yourself
3. When the item arrives, pick up the waybill and paperwork from the courier
4. Go to your local Canada Customs (list of Canada Customs Offices here), they'll process it, stamp the forms, and you can return to the courier company and pick up your package
Most American merchants do not offer free shipping offers outside of the USA. Do not assume that a large FREE SHIPPING promotion on an American Merchants site means that you will be receiving free shipping to Canada. You should be aware that the Merchant will probably add some sort of shipping fee onto your order.
Gifts that are sent to individuals in Canada are exempt from duties and taxes if the item is worth less than $60 (Canadian dollars) and the item includes a card or notice indicating that it is a gift.
Simply put, AVOID UPS, FedEx and DHL ground shipping. These three companies charge unreasonably high Brokerage Fees. If you must use UPS or FedEx- request FedEx Priority or UPS Expedited as these shipping options have brokerage fees included.
Choose United States Postal
Service (USPS) as your shipping option.
It may surprise you but good old Canada Post is by far the least expensive way to ship a purchase into Canada. Look for merchants that offer the United States Postal Service (USPS) as a shipping option. Canada Post will handle the purchase when it reaches the border. Canada Post will only charge a small brokerage fee! This brokerage fee will be payable when you pay any applicable taxes due on the shipment. When USPS isn't available, try to use FedEx Priority or UPS Expedited. They are more expensive than ground but these shipping options have brokerage fees included. Avoid UPS/FedEx Ground.
It goes without saying that when you are investigating what merchants to buy from, your best bet is to buy from a merchant that is located in Canada. This will save you a great deal of money on duty and brokerage fees because your purchase will not have to cross the border. If you must deal with an American merchant, try to find one that has a shipping warehouse located in Canada - there are more and more merchants doing this to enter into the Canadian online market.
Free shipping to Canada is pretty well unknown right now but CanBuy.ca is working with out merchants to offer free shipping to Canada in the form of coupons and price-drops so take a careful look at each merchant detail page to see if they are one of the rare few...