Although the U.S. and Canada are among the world’s largest trading partners, parcel shipping and clearance are subject to a unique set of rules and Canadian customs mandates. The new NAFTA (USMCA/ CUSMA) makes shipping orders to Canada easier than ever.
Parcel Shipping to Canada from the USA: Navigate USMCA/CUSMA Regulations and Optimize Cross-Border Logistics
In this post, we review the following things to know when shipping to Canada:
- Free Trade, USMCA/ CUSMA and duty free import to Canada
- Common Import Fees for ecommerce and parcel imports to Canada
- CBSA assessment and revenue management (CARM)
- Common carrier options for shipping Canada from the USA
- Reverse logistics and leading Canadian domestic carriers
- Additional resources for shipping to Canada and shipping from Canada
Disclaimer: The information in this blog is for general information only.
Shipping orders US to Canada Duty Free
As part of the USMCA (the "new NAFTA), Canada has raised their low value duty threshold to $150 CAD (around $110 USD). Local sales taxes will still apply (but often times, businesses can claim this charge back). This higher duty free threshold helps businesses and e-commerce merchants in the United States ship to Canadian customers. Read about USMCA/ CUSMA/T-MEC North American Free Trade
CUSMA/USMCA Shipping to Canada from the USA
Key provisions for parcel shipping via CUSMA USMCA (i.e. new NAFTA) include:
- Duty free and tax free entry for most US origin parcels valued under CA$40
- Duty free entry for most parcels shipped from the US valued under CA$150
- Simplified "Certification of Origin" for shipments valued under CA$3,300
For low value shipments (under CAD $3,300 to Canada) a certifying statement added to the commercial invoice or any shipping document. The requirement on the importer to maintain records (for example, commercial invoice and B3) applies even if the CBSA does not require a certification of origin or if a requirement for a certification of origin has been waived.
A sample certification of origin statement:
“I hereby certify that the goods covered by this shipment qualifies as an originating good for the purposes of preferential tariff treatment under USMCA/T-MEC/CUSMA.”
This statement can be included on the commercial invoice or other shipping document.
Useful information regarding a certification of origin
Shipping between USA and Canada via Jet Worldwide
- A trusted carrier providing international shipping solutions for over 40 years.
- Shipping between Canada and USA for parcels, pallets and online orders.
- Transparency and world class logistics support.
View Video: Benefit from North American Free Trade Agreements
Carrier Options for Shipping USA to Canada
- Local post options are generally best for individuals shipping small packages and personal items to Canada
- Air freight: This is the fastest option with economy air options to Canada
- Trucking:A good options for shipping less than truck load (LTL) and full truck loads between Mexico, USA and Canada,
- FedEX , DHL:Well known brands with air options and international ground
Benefit from LTL truck load between USA and Canada
Sending parcels to Canada via the US postal Service / USPS
Canada is the largest international destination for the USPS. The USPS offers the lowest cost for small parcels sent to Canada.
The USPS is the preferred option for individuals shipping small packages to Canada
Shipping to Canada via FedEx and UPS
FedEx and UPS are North America's largest carriers and offer reliable transport from the USA to Canada. UPS and FedEx ground services are especially popular for their low costs but are subject to the added expense of entry preparation fees - see below.
Shipping to Canada from the USA via Purolator International
Purolator's USA offices provide delivery to Canada for large bulk shippers. They can develop unique low cost services for US companies who have large regular "north bound volume."
PDF Presentation: Shipping Guide to Canada from the USA
Export declaration (EEI) and USMCA for shipments to Canada?
Electronic Export Information (EEI)
US Foreign Trade Regulations (FTR) mandates export declarations be done via the Automated Export System (AES).Specified timeframes and shipment data is required prior to export. This information was formerly called the Shipper's Export Declaration (SED). EEI’s are used for statisticaldata collection and to enforce export regulations.
EEI’s are not required for most shipments destined to Canada via exception code 30.36.The exemption does not apply for shipments otherwise requiring an export permit or ultimately destined to a third country.
Customs clearance information for parcels imported to Canada from the USA
Parcel shipments shipped from the United States to Canada must comply with Canada Border Services Agency (CBSA) and Canada Revenue (CRA).
Parcels shipped from the USA that are valued over $40 CAD, are subject to Canadian duty and taxes.
For parcels from the USA cleared using USMCA duty free status must be accompanied by a certification of origin. (See note above on New NAFTA / USMCA)
- Goods and Services Tax: Most goods entering Canada are subject GST (Good and Services Tax) of 5%.
- Shipments to Canada from the USA valued under $40 CAD can be cleared duty free and tax free
- Shipments from the US to Canada under $150 CAD can be cleared duty free (but still subjected to federal and provincial sales tax).
- Shipments sent to the provinces of Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, and Ontario from the USA are subject to a “harmonizes” provincial sales tax (HST). For parcels to these provinces, the GST is combined with the provincial tax rate to form the HST. See chart below for applicable rates. HST is administered by the CRA and Canadian businesses that collect GST/ HST must be registered.
- Provincial Sales Taxes / PST: Most of the "non HST provinces" process and impose their own taxes and not via the Canada Revenue Agency/ CRA.
Duty rates to Canada for goods shipped from the USA
Although parcels containing goods made in the USA (US origin) may qualify for preferential duty free entry, most e-commerce goods shipped to Canada are made elsewhere (usually Asia) and thus not eligible for duty free entry under CUSMA. Furthermore, shipments sent via ground to Canada are subject to customs entry preparation fee (see below).
Parcels imported from the USA to Canada are subject to classification via the international Harmonized System(HS) code. For imports to Canada, the six-digit harmonized system code is supplemented by a four-digit code unique to Canada.
USMCA / CUSMA allows for duty free import to Canada for goods valued under $150 CAD. But higher value e-commerce orders are subject to duty.
Read More: Country from where goods were shipped versus country of origin
Common Canadian Import Fees for Shipments from the US
Common import fees for consignments shipped via air to Canada can include duty, taxes and carrier disbursement fees.
De minimis refers to the maximum threshold below which no duty or tax is charged on imported items. U.S. companies shipping to Canada should be aware that Canada’s de minimis threshold is C$40 for taxes and C$150 for duties.
Registration with Canadian Customs via CARM for Imports to Canada
CBSA demands all importers register in the CARM system.This system facilitates all aspects of importing.Registering in CARM requires importers to assign a customs broker and to have a surety bond (or deposit) to guarantee payment of duty and taxes. How to register for CARM.
Shipping your parcel ground to Canada from the USA:
Ground shipping to Canada is often the most cost effective method for shipping to Canada. The advantages of ground can be mitigated, however, by entry preparation fees (that may otherwise be included for express) and longer transit times. Contact Jet for a quote on economy express.
American companies becoming a Canadian Importer or Record
Canada’s non-resident importer program enables United States exporters to obtain a business number and act as the “importer of record.” Being able to act as the importer of record removes the burden of customs clearance from the Canadian customer and can facilitates the sale.
Reverse Logistics: Simply having a Canadian Address:
A challenge for many US companies is handling Canada returns. Jet Worldwide has enterprise sized solutions as well as low volume return solutions. For many, they just need a Canada address for returns and a standard operating procedure for managing the returned goods.
Ecommerce sellers to Canada often inquire as to alternative shipping options within Canada. We have created this post to assist with these inquiries we get on this subject.
Read More: Useful Information Regarding a Certificate of Origin
Canadian Carriers to Consider For Domestic Shipping
- Canada Post: Most well know and leader for Canadian e-commerce deliveries.
- GLS (formerly Dicom): A division of Royal Mail attempting to capture a greater share of business to consumer market.
- Purolator: A division of Canada Post and leading Canadian carrier. Purolator offers access to Canada for large US shippers to Canada via their Purolator International subsidiary.
- Nationex: A privately held firm specializing in business to business ground shipping in eastern Canada.
- TFI Carriers: A financial holding company of the Saputo family, TFI parcel carriers (representing around 15% of total revenue) include Canpar, ICS and , Loomis.
- Intelcom: Primarily serving major e-commerce sellers with independent "gig economy" drivers offering low cost parcel delivery.
- FedEx and UPS: Well known carriers offering ground and express across Canada
