The United States-Mexico-Canada Agreement (USMCA) [also known as the Canada-United States-Mexico Agreement (CUSMA) or Tratado entre México, Estados Unidos y Canadá (T-MEC)] will go into effect July 1, 2020. This will supersede the 26-year-old North American Free Trade Agreement (NAFTA).
The USMCA comes with a new de minimis threshold for Canada that only applies to shipments from either the U.S. and Mexico that are facilitated by express carriers and customs brokers, not the postal network. For instance, shipments sent from the U.S. via USPS and brought in through Canada’s postal service (Canada Post) will continue to be subject to the current de minimis threshold under NAFTA ($20 CAD). Therefore, any item shipped via Canada Post with a value that exceeds $20 CAD will be subject to both duties and taxes.
The changes to the de minimis for Canada and Mexico include:
- $20 CAD for postal shipments (unchanged)
- $40 CAD for tax and duty relief for express shipments (new)
- $150 CAD for duty-only relief for express shipments (new)
- $300 USD for postal shipments (unchanged)
- $50 USD for tax and duty relief for express shipments (unchanged)
- $117 USD for duty-only relief for express shipments (new)
These changes will impact you if you are shipping cross border and importing goods to Canada and/or Mexico from within North America. Keep in mind that there may be some goods which do not qualify for this tax and duty relief.
- Canada Border Services Agency
- U.S. Customs and Border Protection
- Government of Canada