How to Avoid Customs Charges When Ordering Items From the US to Canada

Nobody likes to pay extra fees. It is frustrating to order something and get hit with extra shipping and customs charges, especially if you frequently purchase international items. Online shopping has increased by 117% in the last three years and is expected to continue to grow. While online shopping gives you seemingly endless options for purchasing different items, if you purchase from foreign countries, you may end up paying more in fees than the product is actually worth. This article will review how to avoid customs charges from the USA to Canada.

Customs charges

Customs charges vary greatly depending on the type of item you purchase and the country you order it from. Before you purchase any item from outside of Canada, check the import fees you’ll have to pay. Some items may be cheaper from the US versus buying them locally, or you may just prefer a brand or product from the US. However, be sure to calculate the cost after you add shipping and customs fees. Some of the most commonly imported items and their charges include; clothing (18%), cookware (8%), furniture (9.5%), textile articles (18%), auto parts (8%). Paying a 9% additional charge on a piece of furniture or 18% on a large order of textiles can add significantly to your costs. In some cases, it might be better to purchase items locally. 

A customs agent’s job is to inspect items brought across the border. Each item must be inspected carefully to ensure it is safe. This is especially true for botanicals and produce, since bringing new organisms into a country can cause major problems. Inspections are also conducted to ensure that no prohibited items such as illegal drugs are brought into the country. To cover the cost of this work, duty fees are applied to all items shipped into Canada. Almost every country charges duty fees. These fees are also a way to encourage consumers to purchase items locally, supporting their home economies rather than purchasing products made overseas. 

How to avoid customs charges from the USA into Canada

Send products as a gift

Gifts are not subject to the same duty fees as other items. Keep in mind that gifts over $60 do not qualify for this rule. If you are ordering several items, ship them separately so that you are not sending more than $60 per day worth of items. If you send multiple items as gifts at the same time and the total cost exceeds $60, you’ll have to pay fees on the entire shipment. If you choose to send items as gifts to avoid fees, make sure that the recipient will receive less than $60 worth of items each day, even if they are all shipped separately. Tobacco and alcohol cannot be sent as gifts and are subject to import fees regardless of the cost of the items. 

Order items worth less than $20

Items that are worth less than $20 or less are not subject to duty fees. Similar to gifts, the rule applies to the entire shipment, not individual items. If you ship two $20 items at the same time, you’ll have to pay fees on all $40 worth of products. This rule does not apply to tobacco or alcohol. 

Get an invoice

If you do send an item worth less than $20 or a gift worth less than CAN$60, make sure the seller includes an invoice with your item. Otherwise, customs agents will use their own guide and rules to determine the value of your items. 

Some people lie on customs forms about the value of items to save money. However, you can face heavy fines or jail time if you are caught doing this.

Purchase products made in the USA

The North American Free Trade Agreement (NAFTA) is an agreement between Canada, the United States, and Mexico that allows for textile, footwear, leather, and clothing products to be shipped duty-free between the three countries. In order for a product to qualify, it must be manufactured entirely in the USA. This means all materials must be produced, assembled, packaged, and shipped directly from the U.S. 

Self-clear items 

It is possible to self-clear items through customs to save money. All it takes is some paperwork and a visit to a customs office. You will need the invoice for your item, the manifest or waybill, and valid identification to pick up your item. You’ll simply go to the customs office closest to the warehouse storing your item and present your paperwork. Picking up your own items can save you money on delivery and brokerage fees. 

Bringing items to Canada

If you have a U.S. address or are moving to Canada, you may have to pay fees on new items that you bring into the country. However, you can bring several things with you without having to pay an import fee. These items include books, linens, clothes, jewelry, antiques, furniture, silverware, musical instruments, hobby tools, private collections of coins, stamps or art, and appliances. You can also bring cars for personal use without paying import fees. New items can be brought to Canada without paying customs fees if they are wedding gifts from a marriage that was legalized less than three months before moving to the country.  

Items that do not ship to Canada

Some U.S. companies do not ship to Canadian addresses. They may not want to deal with the hassle of customs or may worry that they cannot meet promised delivery times.  For example, you may want to use a U.S. credit card for the rewards points, but they will not deliver to your address in Canada. You can overcome this problem by using a package forwarding service. These services allow you to purchase a product from a U.S. retailer and have it sent from the company to a domestic address. From there, the package forwarding service re-packages the item and sends it to you in Canada. These services do charge a small fee, but allow you to receive items that you would otherwise not have access to in the country. 

How to avoid customs charges from the USA to Canada using different shipping companies

UPS, DHL, FedEx, and USPS all charge different rates for shipping. You can use a cost calculator to determine each company’s shipping prices, however, most estimates do not include duty fees. This is because the duty fees are determined by customs authorities. Since these companies will not know the price of duty fees until the item crosses the border, you do take a small risk when importing items. Before your item can be released to you, shipping companies will require you to pay all taxes and fees. You can work with the seller of your item to split the cost of duty fees or get them to pay the fee. However, these costs must be agreed upon before the item is shipped. 

While you cannot guarentee the exact cost of the duty fees you’ll have to pay, you can calculate the shipping cost and price of the item to make an educated estimation. Shipping through the Canada Post is almost always the cheapest option. 

Other fees

Brokerage fees

Some international delivery companies like DHL and UPS charge heavy brokerage fees to deliver items straight to your door. This makes them significantly more expensive than Canada Post. 

Sales tax 

Most countries charge a fee when importing an item across borders. In Canada, imported items are also subject to a goods and service tax (GST) of 5%. Some goods and products are also subject to excise duty or excise tax on luxury items. You may also be subject to a provincial service tax (PST) of up to 8%. Harmonized sales tax (HST) is used by some provinces to combine fees. 

The fees you pay depend on your particular province. British Columbia, Manitoba, Quebec, and Saskatchewan charge GST and PST. New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island charge HST. Alberta, Northwest Territories, Nunavut, and Yukon only charge GST.