Import Duty Calculator Canada

The underlying calculation

Canadian duty is assessed on the value for duty, normally the transaction value at the place of direct shipment, effectively an FOB basis, so international freight is generally excluded. Duty = value for duty × the rate in the Customs Tariff for the tariff classification and origin.

GST at 5% is then charged on the duty-paid value. Provincial sales tax or the provincial portion of HST is handled separately and varies by province, which makes the total rate depend on where the goods are destined.

Worked through

Goods valued at C$24,300 with duty at 6.5%: C$1,579.50. GST at 5% on C$25,879.50: C$1,293.98. Federal total C$2,873.48.

Into Ontario at 13% HST rather than 5% GST, the tax becomes C$3,364.34 and the total C$4,943.84, though for a registered business the whole tax component is recoverable as an input tax credit.

Now the same goods qualifying as US-origin under CUSMA: duty falls to zero and only the tax applies. The C$1,579.50 of duty is the entire difference, and it turns on origin documentation rather than on where the goods shipped from.

Where it goes wrong

Origin under CUSMA is not the same as shipping from the United States. Goods manufactured elsewhere and warehoused in the US do not qualify, and a US supplier's invoice is not by itself evidence of origin, a certification of origin meeting the agreement's requirements is.

The relief thresholds also differ by mode and origin. Courier shipments from the US and Mexico have higher thresholds under CUSMA than shipments from elsewhere, and postal shipments have a much lower one, so the same goods can be treated three different ways.

Making it useful

Obtain a CUSMA certification of origin from any US or Mexican supplier whose goods qualify, and keep it for the retention period. It is a free document that removes the duty entirely, and it is the single highest-return piece of paperwork in Canadian importing.

Then check the province of destination for the tax calculation. A national landed cost using 5% GST understates the tax in every HST province, and while it is recoverable for a registered business, it is not for a consumer-facing one that is not registered.

Registration, and the non-resident importer question

A business importing into Canada needs a Business Number with an import-export account, which is straightforward and free. Without it, entries cannot be filed in the business's name.

The non-resident importer programme lets a foreign business act as importer of record into Canada, clearing goods in its own name and delivering duty-paid to Canadian customers. That removes the customer-facing duty demand entirely, which is the largest single cause of cross-border refusals into Canada.

It also allows recovery of the GST through registration, which a foreign seller shipping DDU cannot achieve. For any business with meaningful Canadian volume, becoming a non-resident importer usually pays for itself within a few months on the combination of recovered tax and reduced refusals, and it is a materially better customer experience than the alternative.

Canada's rules of origin under CUSMA can reduce duty to zero for qualifying goods, and qualifying is more restrictive than shipping from a member country. The certification requirements are specific and the claim has to be supported by records. Goods manufactured elsewhere and merely transhipped through a member country do not qualify, which is the misunderstanding that produces retrospective assessments.