How Much Does it Cost to Import Goods from Canada?

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Estimating import costs is an important part of your business strategy. Find out what to prepare for when bringing in goods from Canada to the USA.
June 2, 2023
Last Modified: November 27, 2024
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The main costs involved when importing or shipping from Canada are the duties and taxes, permit applications, and brokerage fees. 

Key Takeaways:

  • Products imported from Canada for sale in the U.S. are subject to tariffs and duty tax.
  • Imported products only being sold in the U.S. are exempt from the Goods and Services Tax (GST) or the Provincial Sales Tax (PST) applied in Canada. 
  • The USMCA FTA states that many goods enter the U.S. duty-free or under a preferential rate. 
  • New importers should be aware that several popular products are subject to import quotas. 

USA Customs Clearance has customs brokers licensed in both the United States and Canada that can help importers and exporters on either side of the border.

November 2024 Update: Potential Impact of Tariffs on Imports from Canada

President-elect Trump has announced plans to implement new tariffs on key U.S. trade partners, including Canada, which could disrupt established trade patterns and raise costs for American businesses and consumers.

The proposed tariffs include a 25% duty on all goods imported from Canada and Mexico. Trump has framed these tariffs as a response to illegal immigration and drug trafficking, stating that they would remain in place until these issues are resolved. 

The United States and Canada currently trade under the United States-Mexico-Canada Agreement (USMCA), which allows for tariff-free trade across the borders of the three nations. However, it is unclear how the new tariffs could be enforced without violating the agreement. The USMCA is up for potential renegotiation in 2026, adding further uncertainty to the future of cross-border trade.

Canada’s most common exports to the U.S. include oil, cars, machinery, raw materials, and plastics. In 2023, the U.S. accounted for approximately 75% of Canada’s exports, highlighting the deep economic ties between the two countries. A 25% tariff on Canadian goods could significantly increase costs for U.S. importers, particularly in industries like automotive manufacturing and energy.

While the specifics of the proposed tariffs remain uncertain, their potential implementation could lead to significant changes in trade practices with Canada as early as January 2025. Businesses reliant on Canadian imports should stay informed and prepare for potential cost increases in their supply chains.

Related: How Trump’s Tariff Policies May Impact International Trade

Do I Have to Pay Import Duties From Canada?

Yes, U.S. importers do need to pay import duties and taxes when bringing products from Canada. Trade agreements do make cross border trade easier, and in some cases allow for duty-free products, but it doesn’t apply to everything.

This is important because product pricing is often comparable to U.S. costs, even if things like shipping are easier to arrange. Making a profit means taking all related costs into consideration. 

The most common imports costs from Canada are related to:

With some careful planning and the right guidance, you can handle these costs and make the most of the opportunities that cross border trade presents.

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Different Commodities and Their Related Costs

Not all goods are created equal, especially when it comes to import costs. The type of commodity you're importing plays a big role in the fees you’ll need to prepare for. Import duties are determined by the Harmonized Tariff System (HTS) code applied to every commodity entering the country.

For calculating the fees between the U.S. and Canada specifically, you’ll also need to reference the United States-Mexico-Canada-Trade Agreement (USMCA). A number of items are still subject to import tax. I’ve gathered a list of the more common ones along with a range of base tariff rates. 

A table shows the base rate import duty based on HTSUS codes for different commodities imported from Canada. Next to each listed commodity is the Base rate tariff range. First is dairy products with a range from 31 cents to $2.27 per kg plus 17% of value. Next is sugar preparations with a range of 17 cents to 40 cents per kg plus 10.4% of value. Next is chocolate with a range of 22 cents to 53 cents per kg plus 8.5% of value. Next is peanuts with a range of 131.8% to 163.8% of value. Next is baby formula which is $1.04 per kg plus 14.9% of value. Last is cotton, with a range of 8 cents to 31 cents per kg. Data comes from the U.S. Trade Representative.

Source: U.S. Trade Representative 

When you’re looking at the base rate, keep in mind that these are estimates based on the wide variety of products in those general categories. The above is only a small sample of the possibilities. These are presented based on weight, but for certain liquid commodities, the range can be based on volume in liters.

At times, the price per kilogram is all you’ll need to cover. Other times it will be that weight plus a percentage of the overall value. I’ve provided you with the highest possible percentage you’re likely to need to pay within each category as applicable. 

Products in the dairy category, like various cheeses, are also subject to tariff rate quotas. These require special permits issued by the U.S. Department of Agriculture and limit the amount of products that can be imported. 

If you go above your assigned limit, there is a drastically increased import tariff added to everything over the limit. If you’re not careful, going even a little bit over will cancel out any profit you would have made.

Political and Economic Factors Affecting Costs

The type of commodity isn’t the only factor affecting the costs. Any number of international trends and political situations can cause changes.  

Key considerations to keep in mind include: 

  • Supply and Demand Dynamics: The basic principle of economics applies here. If a commodity is in high demand but short supply, the price is going to go up. These increases can then bump up your import costs since most tariffs are based on a percentage of total value. The percentage doesn’t change, but what you’ll have to pay for the exact same amount of product goes up. 
  • Currency Exchange Rates: Exchange rates between the U.S. Dollar (USD) and the Canadian Dollar (CAD) can directly impact your import costs. If the Canadian dollar strengthens against the USD, the domestic cost of your goods goes up, increasing your overall import costs. On average, $1 USD is equal to $1.70 CAD. 
  • Global Market Conditions: The overall economic relationship between the U.S. and Canada is mostly positive, but nothing is guaranteed. In recent years there have been trade disputes involving dairy products, softwood lumber, auto parts, and energy. These can result in either semi-permanent price hikes, or possibly tax breaks, depending on what side of the issue the U.S. lands on. 

Planning for these costs isn’t easy, but it is possible. The more you know, the higher the chance of making good decisions, and the more successful your importing business can be. Remember, in international trade, knowledge truly is power.

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Do US Importers Have to Pay Canadian Sales Tax?

As a general rule, U.S. importers do not pay Goods and Services Tax (GST) or Provincial Sales Tax (PST) in Canada on goods they are importing into the United States. Another type of sales tax, referred to as the Harmonized Sales Tax (HST), is treated the same way.

While GST/HST technically applies, the rate is set to zero, so no tax is actually charged. This is based on the principle that consumption taxes should apply only in the jurisdiction where goods and services are consumed.

The exceptions to this rule generally involve imported goods that might have been used in Canada before being exported, such as a used car. Others involve the import of energy sources. 

It's important to note that the specifics vary greatly. Always consult with a tax professional or licensed customs broker for advice about your specific circumstances.

Calculating Your Total Landed Costs

While paying import taxes does cut into your bottom line, it's just part of the process. After all, there is usually more to your business than just getting the goods through customs.  

We’re talking about the costs related to:

  • Hiring professional import help
  • Permit applications
  • Document processing
  • Shipping and insurance
  • Warehousing and packaging

Depending on where along the supply chain your business operates, your shipping expenses can include getting goods both across a border and delivering them to clients. 

Hiring A Customs Broker 

Even experienced importers will often work with licensed customs brokers because of their ability to manage a variety of processes. Among other things, brokers can:

  • Accurately calculate customs duties
  • Ensure goods are correctly classified under the HTS code system
  • Arrange the payments to the proper authorities
  • File documents with Customs and Border Protection

You aren’t legally required to use the services of a customs broker whether you’re operating out of the United States or Canada. Choosing the DIY approach, however, has landed many a new importer in hot water with the CBP. 

Wrong HTS code? Say hello to a reclassification fee. Document errors causing a delay at the border crossing? You’ll need to pay for additional storage time, document resubmission, and possibly a CBP inspection fee. 

In the end, it’s usually more cost-effective to hire a professional. 

As both a CBP-Licensed Customs Broker and a Qualified Canadian Customs Broker, USA Customs Clearance can seamlessly facilitate your imports and simplify costs between the U.S. and Canada. 

Permit Applications

These can be difficult to calculate because each agency within the U.S. that oversees an imported product has their own fee schedule. 

As an example, we’ll focus on two Canadian commodities that require permitting, dairy and lumber. 

  • Lumber: The USDA’s Animal and Plant Health Inspection Service (APHIS) issues the Timber and Timber Products Import Permit (PPQ form 585). Now, APHIS doesn’t actually charge you for the permit itself; you can go online and download it for free. However, there is a processing fee of $150 once you’ve submitted the permit. If you’re having your supplier or other reputable source fill out the actual permit to ensure accuracy, they may also charge you a completion or endorsement fee. 

Both the permits for dairy and lumber are to be renewed annually. These are just two examples. There are hundreds of goods that pass between the U.S. and Canada, all subject to a variety of partner government agencies (PGAs) that would love to catch you making a mistake. 

Document Processing

If you’ve hired a customs broker, they can handle most necessary documentation on your behalf. Most, if not all, have access to the online submission systems like the Automated Clearing House (ACH) and others. 

Other documents often required include:

  • A PAPS number for trucking: Since goods from Canada are most often shipped by truck, a Pre-Arrival Processing System (PAPS) number may be needed. 
  • Customs Bond: Imports that are valued over $2,500 or regulated by a PGA must have their import duty amount covered by a bond issued by a bank or surety. 
  • ISF Filing: For those that are importing from Canada by ship, Importer Security Filing (ISF) must be handled before the ship leaves. Ocean travel between the two countries is quick, so it doesn’t leave much room for error. 

There are fees related to each of these documents, either directly to the issuing agency or as set by the brokerage firm assisting you with importing. 

Domestic Logistics

I’ve grouped up the various other transport-related services here to keep things simple. In this case, domestic logistics costs include shipping, warehousing, and possibly packaging. 

These can technically be handled by separate entities, but let’s be honest, who wants to keep track of that many companies? Therefore, when calculating your final landed costs, include the costs of hiring a reliable third party logistics company (3PL). 

A 3PL often serves multiple channels in the logistics industry, including shipping and warehousing. In many cases, they can help with many of the needs we’ve already discussed. 

  • Customs brokerage
  • Freight forwarding
  • Warehouse fulfillment and distribution
  • Cargo insurance
  • Truckload shipping

USA Customs Clearance can actually help you with several of these, as we have an established relationship with R+L Global Logistics, a nationwide 3PL provider.

Strategies For Minimizing Trade Costs

A big part of saving on import costs from any nation involves complying with regulations and working with an experienced customs broker. 

In the case of goods from Canada, importers also benefit from the various trade agreements that have been brokered with the United States. Primary among these is the United States Mexico Canada Free Trade Agreement (USMCA)

Work Within Existing Trade Agreements

The current Free Trade Agreement benefiting U.S./Canada trade is the 2020 USMCA, formerly known as the North American Free Trade Agreement (NAFTA). Its creation improved the import process between the participating nations by modernizing provisions and reducing different trade barriers.

  • Lower de minimis shipment values
  • Reciprocal duty-free market access
  • Digital trade provisions
  • Well-defined criteria to minimize classification errors

By choosing imports that are largely protected from harsh import fees, businesses can save thousands of dollars.

Look For High Volume Shipments

Knowledge about Canada’s top exports can give you a competitive edge in minimizing import costs. Commodities that are traded in high volume often have established supply chains, which can reduce shipping and handling costs. Plus, high-volume commodities are more likely to have specific trade agreements in place, which can lower tax and duty rates. 

Consider the following:

  • Vehicles and Auto Parts: These are traded in large volumes between Canada, the U.S., and Mexico. Thanks to trade agreements, certain vehicles and parts manufactured in Canada can be imported duty-free. 
  • Agricultural Products: Many Canadian agricultural products can be imported duty-free as well. Plus, the supply chains for these products are well established, which can reduce logistical costs, especially for goods requiring refrigeration.  

However, not all top exports are a good fit. Some can be more challenging and have costly import requirements:

  • Crude Oil: While it's a top export, importing crude oil can be complex and costly due to the specific equipment and infrastructure needed for transport. Plus, oil is subject to wildly changing global market prices. If you’re a new importer, it’s not a field we would recommend.
  • Machinery and Equipment: The import duties and regulations for heavy machinery can be complex, as they often depend on the specific type of equipment, its intended use, and the country of origin for its various components. Origin plays a huge role in the USMCA, so special care needs to be taken.

Understanding the pros and cons of different commodities can help you find good opportunities when looking for import ideas. This will help you minimize certain costs and grow your import business in stages.

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Imports from Canada Made Possible With USA Customs Clearance

A clear understanding of the costs associated with importing from Canada, or any other country, makes for easier business planning. Yet, it's equally clear that this process is also complex and time-consuming. That's where we come in.

At USA Customs Clearance, we're dedicated to simplifying your importing process. Our services are designed to empower you to navigate import costs with confidence, giving you more time to focus on what truly matters – your business. 

Don't let the complexities involved in import costs keep you from maximizing your business potential. With USA Customs Clearance by your side, you can turn these challenges into success stories.
As both a CBP-Licensed Customs Broker and a Qualified Canadian Customs Broker, we can seamlessly facilitate your imports and simplify costs between the U.S. and Canada. Give us a call at (855) 912-0406 for a risk-free brokerage services quote. Let's turn your importing journey into a smooth and successful venture, together.

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I am considering the purchase of a 1976 Cessna 177B aircraft based in Hawksbury, Ontario and understand that importing and aircraft into the US from Canada is somewhat complicated. I am interested in learning whether your firm handles such transactions.

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