Clearit.ca's Blog on Customs Brokerage and News Updates
If you’re Canadian that frequently shops online, chances are that you’ve been slapped with a (sometimes unexpected) customs duty and tax bill on your purchase. Well, we have good news for you! Chances are likely that your future orders may not be subject to the same fees.
The ongoing renegotiations for NAFTA will likely bolster some benefits for Canadians. One of these benefits may be the raising of the de minimis threshold. The de minimis threshold is a duty free threshold on imported goods. In Canada, it is currently $20, whereas there is speculation that it may be raised to $200.
The Trump administration has made it clear that there is much to be renegotiated within NAFTA, even overtly stating their interest in the raising their own de minimis threshold. This is in the United State’s interest as American merchants have long been insisting on an increase in the threshold, and with that, it’s likely that Canada will increase their threshold as well during this process.
The de minimis threshold is intended to smooth transactions for imported goods at the border by reducing the burden of the paperwork involved with charging duties and taxes on all shipments, including very small orders. In essence, it takes more time and money to go through the administrative process of collecting duties/taxes than what the overall earnings would be worth from doing so.
Many countries have been raising the threshold recently, in the advent of online shopping. In 2016, the Obama Administration significantly raised the US threshold from $200 to $800.
Of course, you might have guessed, and research shows, that Canadians are very much in favor of raising the threshold, as these duties and fees have thrown a wrench in the recent online shopping boom for Canadian shoppers. For now, we can only speculate on what will come of the NAFTA renegotiations.