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. For goods valued between $40 and $150, only tax will be collected and after $150 both duty and taxes will apply.
Some have argued that this would hurt the Canadian retail sector while 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 provides an alternative to increase the Canadian presence in the e-commerce world. By enabling cross border shipping, Canadian online sellers are able to expand their marketplace with low-cost, fully tracked shipping options with Chit Chats.