If you're on the Canadian side of the border and shopping online on American sites, hidden costs may catch you by surprise. There are things you should check before you give out your credit card number.
First, ensure that the shopping site offers international shipping or at least shipping to Canada. There's little more irritating than going through an online store, filling your shopping cart, and then discovering that the vendor doesn't ship outside the United States.
Shipping Charges to Canada
Good sites will list their shipping policies and procedures upfront, usually in the customer service or help sections. Shipping charges are determined by weight, size, distance, speed, and number of items. Read the details carefully. Don't forget to factor in the exchange rate for the shipping charges as well as for the cost of the merchandise. Even if the exchange rate is in your favor, your credit card company will likely add a charge for currency conversion.
The shipping charges and methods of shipment, usually mail or courier, aren't the total cost you'll have to pay to get that package across the border. You'll also have to pay Canadian customs duties, taxes, and customs brokerage fees.
Canadian Customs Duties
Because of the North American Free Trade Agreement, Canadians don't have to pay duties on most American and Mexican manufactured items. But just because you buy an item from a U.S. store doesn't mean it was made in the United States; it's possible it was imported into the United States first. If so, you may be charged duty when it comes into Canada. So check before you buy and if possible get something in writing from the online store in case the Canada Customs people decide to be particular.
Duties on goods vary widely, depending on the product and the country where it was manufactured. In general, on goods ordered from a foreign retailer, there is no assessment unless Canada Customs can collect at least $1 in duties and taxes. If you have questions about Canada customs and duties, contact the Border Information Service during business hours and speak to an officer.
Just about everything individuals import into Canada is subject to the Goods and Services Tax (GST) of 5 percent. The GST is calculated after customs duties have been applied.
You'll also have to pay the applicable Canadian Provincial Sales Tax (PST) or Quebec Sales Tax (QST). The provincial retail sales tax rates vary between provinces, as do the goods and services to which the tax is applied and how the tax is applied.
In Canadian provinces with a Harmonized Sales Tax (HST) (New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario, and Prince Edward Island), you'll be charged the HST rather than the separate GST and provincial sales tax.
Customs Brokers Fees
Fees for customs brokers services can really surprise you. Courier companies and postal services use customs brokers to get packages processed through Canada Customs at the Canadian border. Fees for that service will be passed along to you.
Canada Post is authorized to charge the recipient a handling fee of $5 for mail items and $8 for express mail items for collecting duties and taxes assessed by the Canada Border Services Agency (CBSA). If there is no duty or tax owed, they don't charge a fee.
Customs brokers fees for courier companies vary but are usually much higher than the Canada Post fee. Some courier companies include the custom brokers fees in the courier service price, depending on the level of courier service you select. Others will add the customs brokers fees on top and you'll have to pay those before you can get your parcel.
If you select a courier service for shipping to Canada, check whether the level of service includes customs brokers fees. If it isn't mentioned on the online shopping site you're using, you can check the service guide on the individual courier company website or call the local number of the courier company to find out their policies on international shopping.