Canada and USA have always been each other’s biggest trading partners. With the Canadian dollar hitting a multi-year high at 0.965 USD, there are definite potentials for bargains south of the border. But do stores ship to Canada? And how much would we really save once the taxes, duties, exchange, and brokerage are all factored in? I want to share some insights on frequently asked cross-border shopping questions so we can better understand the rules of the game and play to win.

Do they ship to Canada?
An increasing number of stores in the US have realized that Canada is an important market and would be glad to ship items here. However, you should still find out as soon as possible to avoid disappointment. The best way to do this is go through check out with the exact item you want. This will tell you whether they ship here and how much it is going to cost. Note that some merchants have agreements with their suppliers that prevent them from exporting certain products or brands, so if they do not ship one item to Canada, it doesn’t mean they won’t ship something else you want. Finally, if you see something you absolutely cannot live without and the store doesn’t know what Canada is, you can still get it with the help of proxy shippers. These companies will set you up with a US address that you can use, and then forward the package to you in Canada.

Exchange and payment
You can usually pay using your Canadian credit cards without too much trouble when cross-border shopping online. The exchange rate is usually fair, but you may be subject to 2-3% foreign transaction fee that will be applied even if the purchase is denoted in CAD. Some US merchants will accept CAD as an option, but their exchange rate tends to be outdated. Generally, exchange and payment are not a big issue, but if you plan to do a lot of cross-border shopping, it may be worthwhile to get a US based credit card.

Cross-border fees and exemptions
Once you have determined that a store ships to Canada and found a way to pay them, the next step is to understand the cross-border fees such as duties, taxes and brokerage. Unlike trips you personally take, different rules for exemption apply when doing cross-border shopping online. Generally, items under $20 CAD are exempt from all taxes, duties and brokerage. Items marked as a personal gift are usually exempt up to $60 CAD. It is not unheard of for people to request an item marked as a gift in an attempt to take advantage of the higher exemption, this is especially true for purchases from classified or auction type sites.

Duties
Duties are special import taxes collected by the government that apply to items entering the country. They can range from nothing at all (0% for digital cameras) to seriously expensive (20% for rubber boots). The rate varies depending on the category of item, material it is made with, where it is from, and its intended use.  Canada Border Services has a 1700+ page document detailing duty rules for everything from computers, to fertilizers, and even battleships. Fortunately, the team at Wishabi has done the work and the estimated duties are included in all cross-border deals from US merchants.

GST/PST/HST
All non-exempt items shipped from the US are subject to GST and HST. They may not be subject to PST if they entered the country in a province different from the one you live in. However, since you do not usually control or even know where the items enter Canada, it would be safer to assume that you would be responsible for the entire GST+PST or HST when cross-border shopping.

Brokerage or clearance Fees
Unlike duties and taxes which go to the government, brokerage fees are charged by the shipping company for the privilege of carrying the goods for you across the border. Yes, I know you’ve already paid shipping fee, but this is just how they spin it. It is something you have to pay special attention to as it is often not included in the checkout page break down and will be demanded when you receive the item. Brokerage fee depends on the cost of item, the shipping company and, the type of service used. It can range from nothing at all (Fedex International Priority), to a small reasonable fee (USPS), to something that will make you cry (UPS standard). Here’s the clearance fee rate table for Fedex and UPS. Always call to confirm if the brokerage fee is not explicitly stated.

None of us know just how long the high Canadian dollar will last. So arm yourself with the proper knowledge and take advantage of the savings and selections south of the border while you still can.