If you’re selling products online and shipping into Canada or importing goods to fulfill orders understanding duties and tariffs isn’t optional. Get it wrong and you’re looking at delayed shipments, surprise costs, and unhappy customers. Get it right, and you’ve got a competitive edge most sellers overlook.
This guide breaks down everything Amazon and Shopify sellers need to know about Canadian import duties and tariffs, in plain language.
What Are Duties and Tariffs?
Let’s start with the basics.
Customs duties are taxes applied by the Canadian government on goods imported from other countries. The amount depends on what the product is and where it was made (its “country of origin”).
Tariffs refer to the rates at which those duties are charged essentially the percentage applied to the value of the goods. These rates are set out in Canada’s Customs Tariff, a schedule managed by the Canada Border Services Agency (CBSA).
In practice, people use the terms interchangeably, but technically:
- A tariff is the rate or schedule
- A duty is the actual tax you pay
How Are Duties Calculated in Canada?
Canadian customs duties are typically calculated as a percentage of the customs value of the goods which is usually the price you paid for them (also called the transaction value).
Basic formula:
Customs Duty = Customs Value × Tariff Rate
For example, if you’re importing $1,000 worth of apparel with a 18% tariff rate, you’d owe $180 in customs duty.
On top of that, GST/HST is applied on the total of the customs value plus the duty. So the tax calculation layers on after duties are assessed something many sellers don’t realize until they get a surprise bill.
HS Codes: The Key to Finding Your Tariff Rate
Every product imported into Canada must be classified under a Harmonized System (HS) code a globally standardized 6-digit (or in Canada, 10-digit) product classification code.
Your HS code determines:
- What tariff rate applies
- Whether any trade agreements reduce your rate
- Whether your goods are subject to special rules, quotas, or restrictions
Getting your HS code wrong is one of the most common (and costly) mistakes importers make. It can lead to underpaying duties (triggering audits) or overpaying (hurting your margins). When in doubt, work with a licensed customs broker.
You can look up Canada’s tariff schedule at the Canada Border Services Agency (CBSA) website or use the Canadian Trade Index.
Canada’s Trade Agreements: Your Rate May Be Lower Than You Think
Canada has free trade agreements with dozens of countries, meaning goods that qualify can enter at a reduced or zero duty rate. Key agreements include:
| Agreement | Key Partners |
|---|---|
| CUSMA / USMCA | United States, Mexico |
| CETA | European Union |
| CPTPP | Japan, Australia, New Zealand, Vietnam, and others |
| CCFTA | Chile |
| CKFTA | South Korea |
To claim a preferential rate, goods must meet the rules of origin requirements – meaning they must be sufficiently produced or transformed within the partner country. Simply shipping through a partner country doesn’t qualify.
For Amazon and Shopify sellers sourcing from the US or EU, this is worth paying close attention to. You may be paying duties you don’t legally owe.
The De Minimis Threshold: When Duties Don’t Apply
Canada’s de minimis threshold the value below which duties and taxes are not collected is CAD $20 for most commercial imports.
Yes, $20. That’s one of the lowest thresholds in the world.
This matters enormously for cross-border e-commerce sellers. Unlike the US threshold of USD $800, nearly all commercial shipments into Canada will be subject to duties and GST/HST, no matter how small the order.
Key takeaway for sellers: Don’t assume low-value orders slip through duty-free. Budget for it, communicate it to customers, and price accordingly.
Duties vs. GST/HST: What’s the Difference?
These are two separate charges, and sellers often confuse them.
- Customs duties are import taxes specific to the product category and country of origin. They go to the federal government as a trade measure.
- GST/HST is Canada’s consumption tax (Goods and Services Tax / Harmonized Sales Tax), applied on most goods and services sold in Canada including imports.
For imported goods, GST is charged on the customs value + duty at the border. If you’re a registered business, you may be able to claim input tax credits (ITCs) on this GST. End consumers cannot.
If you’re a foreign seller registered for Canadian GST/HST, you also need to collect and remit GST/HST on your sales separate from what’s collected at the border. These are two different obligations that can overlap in confusing ways.
Who Pays: Seller or Buyer?
This depends on your shipping terms (also called Incoterms).
- DDP (Delivered Duty Paid): You (the seller) handle all duties, taxes, and customs clearance. The customer receives the package with no surprise charges. Better customer experience, but more complexity for you.
- DDU / DAP (Delivered Duty Unpaid / Delivered At Place): The buyer is responsible for paying duties and taxes on delivery. Easier for you, but can result in frustrated customers who weren’t expecting extra charges.
For marketplaces like Amazon, the rules vary by program. Amazon’s FBA Import and Seller Fulfilled models handle customs differently, and it’s worth understanding exactly where your liability starts and ends.
Special Import Categories to Know
Certain product categories face additional scrutiny or higher duty rates in Canada:
- Textiles and apparel – Often carry higher tariff rates (10–18%)
- Food and agriculture – Subject to tariff-rate quotas (TRQs) and supply management rules (dairy, poultry, eggs)
- Steel and aluminum – Subject to surtaxes depending on country of origin
- Goods with CFIA requirements – Certain food, plant, and animal products require permits or inspections
- Consumer products – Must meet Canadian safety standards (Health Canada, Transport Canada, etc.)
If your product falls into a regulated category, duties are the least of your worries, compliance requirements can hold shipments indefinitely.
Common Mistakes Amazon & Shopify Sellers Make
- Misclassifying products under the wrong HS code
- Ignoring rules of origin and missing preferential tariff rates
- Assuming the de minimis threshold is higher than CAD $20
- Confusing duties with GST/HST and under-budgeting for landed costs
- Using DDU shipping terms without warning customers about potential charges
- Not registering for GST/HST when crossing the $30,000 CAD annual revenue threshold
How to Stay Compliant (Without Losing Your Mind)
Here’s a practical checklist for sellers shipping into Canada:
- ✅ Classify all products with the correct 10-digit HS code
- ✅ Determine your tariff rate and check for applicable trade agreements
- ✅ Calculate your full landed cost (product + shipping + duty + GST/HST)
- ✅ Decide on DDP vs DDU and communicate clearly with customers
- ✅ Register for Canadian GST/HST if you exceed the $30,000 CAD threshold
- ✅ Work with a licensed customs broker for complex or high-volume imports
- ✅ Keep documentation (commercial invoices, certificates of origin) organized and accurate
Final Thoughts
Canadian customs duties and tariffs aren’t designed to catch sellers off guard, but they will if you’re not prepared. The good news is that once you understand the system, it’s manageable. Know your HS codes, understand which trade agreements apply to your supply chain, and build duty costs into your pricing from day one.
And remember: duties are only one piece of the Canadian tax compliance puzzle. GST/HST obligations for e-commerce sellers are a whole other layer and one that carries real penalties if ignored.
Canadian Sales Tax Solutions specializes in Canadian tax compliance services for Amazon, Walmart, and Shopify sellers expanding into Canada. We help non-resident e-commerce businesses with federal GST registration, provincial tax registration and filing, tax payment support, import GST and ITC recovery, audit support, and ongoing compliance management. From Amazon FBA inventory imports to cross-border e-commerce sales, our team helps online sellers remain compliant while reducing administrative burden and minimizing tax risk in Canada.
To learn more about Canadian GST, HST, provincial filing requirements, and e-commerce tax compliance services, contact Canadian Sales Tax Solutions: