The de minimis threshold is the value below which goods can be shipped into the country before duties and taxes are assessed. Canada’s de minimis threshold was $20 CAD. Compared to the U.S. threshold of up to $800 USD, Canada was among the lowest globally.
On November 30, 2018, Canada, the United States, and Mexico signed an agreement to replace the North American Free Trade Agreement (NAFTA) with the Canada-United States-Mexico Agreement (CUSMA). In this, Canada agreed to increase the de minimis threshold for goods shipped to Canada to $40 CAD. Only tax will be collected for goods valued between $40 and $150. After $150 both duty and taxes will apply.
Some have argued that this will hurt the Canadian retail sector. Others have seen this in a more favorable light. A higher threshold would allow small Canadian businesses access to international supply chains. This would also help level the playing field by promoting seamless access to the global marketplace.
Only time will tell the long term impact this will have on the Canadian retail sector. While U.S. retailers have a dominant online presence, Chit Chats helps level the playing field for Canadian online businesses. We provide low-cost, fully tracked shipping options for our clients so they can expand their market.
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