How to Calculate Customs Duty on Goods Shipped from the US to Canada
US-Canada trade is the world's busiest bilateral trade relationship — $2 billion a day crosses that border. For most US-made goods going north, the duty rate is 0%. USMCA (the NAFTA replacement, in effect since July 2020) eliminated tariffs on virtually everything that meets the origin rules. Our calculator uses 5.0% as the baseline for non-USMCA shipments — goods that don't qualify for preferential treatment pay Canada's MFN rates, which average around 5% for general merchandise.
Zero duty doesn't mean zero cost. Canada levies a 5% federal GST on the duty-paid CIF value regardless of USMCA status. And depending on where your customer lives, provincial sales taxes stack on top.
The Duty + GST Formula — How CBSA Does the Math
Canada Border Services Agency calculates in two steps. Duty on CIF, then GST on the duty-paid total:
- CIF Value = Goods Value + Shipping + Insurance
- Customs Duty = CIF Value × Duty Rate (0% USMCA or 5% MFN for non-qualifying goods)
- Federal GST = (CIF Value + Customs Duty) × 5%
- Provincial Tax = (CIF Value + Customs Duty) × Provincial Rate (varies, see below)
- Total Landed Cost = CIF Value + Customs Duty + GST + Provincial Tax
Example: $500 US-made goods (USMCA-qualifying) with $60 shipping. CIF is $560. Duty is $0 (USMCA). GST is $28 (5% of $560). If shipping to Ontario, HST is 13% of $560 = $72.80. Total tax: $100.80. Landed cost: $660.80.
Same shipment without USMCA: CIF $560, duty at 5% = $28, GST at 5% of $588 = $29.40, Ontario HST at 13% of $588 = $76.44. Total tax: $133.84. Landed cost: $693.84. USMCA saves you $33 on a $500 shipment — worth doing the origin paperwork.
USMCA Rules of Origin — The Paperwork That Saves You 5%
USMCA zero-tariff treatment isn't automatic. You need to certify that the goods meet the agreement's origin rules, and you need to be ready to back it up if CBSA audits the entry.
For most products, the test is one of two things: the goods are wholly obtained or produced in the US (raw materials mined, grown, or manufactured entirely within the US), or they meet a regional value content (RVC) threshold — typically 60% under the transaction value method. The RVC test matters most for manufactured goods that incorporate some non-US components. If at least 60% of the product's value came from US-sourced materials and labor, it qualifies.
What doesn't qualify: goods made in China, shipped to a US warehouse, and then forwarded to a Canadian customer. A Chinese-made power tool sitting in a US fulfillment center doesn't magically become US-origin just because it shipped from Buffalo. CBSA looks at where the product was made, not where it shipped from.
The certification itself doesn't need a specific form anymore under USMCA — a statement on the commercial invoice or a standalone certification document works. Minimum info: certifier details, exporter/producer details, product description and HS code, origin criterion met, and a signed certification statement. Keep these on file for at least five years after the entry.
USMCA is the North American replacement for NAFTA. For a completely different FTA regime, see our EU-UK TCA Rules of Origin guide — the TCA uses a similar concept (sufficient processing + origin certification) but in a post-Brexit UK-EU context.
CBSA De Minimis — More Complicated Than the US Flat $800
The US gives you one number: $800. Canada splits it into tiers:
- Under CAD $40: No duty, no tax. Clean entry, no paperwork.
- CAD $40 to $150: Duty-free (regardless of origin), but GST/HST applies on the full value. The duty exemption is automatic; the tax isn't.
- Over CAD $150: Full duties and taxes apply. Origin and classification matter. USMCA certification needed if you want zero duty.
These are per-shipment thresholds. A $39 order from a US online store crosses without any charges. A $200 order gets the full treatment — duty (if non-USMCA) plus GST plus provincial tax. The $40 tier is for postal shipments specifically; courier shipments may have slightly different treatment at the low end, though the same de minimis values generally apply.
Canada's layered de minimis system — CAD $20 for duty, CAD $40 for gifts, CAD $150 for courier imports — is one of the most complex in the developed world. Our De Minimis Value Guide breaks down the thresholds for every major trade corridor, including the USMCA-specific CBSA tiers.
Provincial Sales Tax — Where Your Customer Lives Changes the Total
Federal GST is 5% everywhere. Provincial tax depends on the destination province. CBSA collects both at the border:
- HST 15%: New Brunswick, Newfoundland & Labrador, Nova Scotia, PEI — these provinces harmonized at 15% (5% federal + 10% provincial component)
- HST 13%: Ontario — 5% federal + 8% provincial
- GST 5% + QST 9.975%: Quebec — technically the QST is calculated on the GST-inclusive amount, so the effective provincial rate is slightly higher than 9.975%
- GST 5% + PST 7%: British Columbia and Manitoba
- GST 5% + PST 6%: Saskatchewan
- GST 5% only: Alberta, Northwest Territories, Nunavut, Yukon — no provincial sales tax
For B2C e-commerce, the destination province determines the tax. A shipment to Vancouver costs more in tax than the same shipment to Calgary, even though both cross the same border. Your checkout system should calculate tax by province — Canadian customers expect it.
Courier Brokerage Fees — The Hidden Cross-Border Cost
Duty and GST are what the government gets. Brokerage fees are what the courier gets for clearing your package. And for low-value cross-border shipments, brokerage can be the most painful line item:
- UPS Standard (Ground): Aggressive brokerage fees. A CAD $100 shipment might carry $30-$50 in brokerage alone — more than the GST. UPS Worldwide Express/Expedited includes brokerage in the air rate.
- FedEx Ground: Similar to UPS Standard — brokerage billed separately and can sting. FedEx Express air services include it.
- USPS / Canada Post: Cheapest brokerage by far. Canada Post charges a flat $9.95 handling fee on anything that attracts duty or tax. For sub-$150 shipments (duty-free tier), often no fee at all.
- DHL Express: Usually includes brokerage in the rate. Disbursement fee of 2% of duty/tax amount or $11 minimum if DDU.
If you're shipping B2C from the US to Canada and the goods value is between $40 and $200, USPS/Canada Post is almost always the cheapest door-to-door option. UPS Standard looks cheaper on the shipping label and then clobbers the recipient with brokerage — which generates chargebacks and returns. USPS costs a few dollars more on postage and saves $50 in brokerage. Your customers will thank you.
Customs Paperwork for US-to-Canada Shipments
Every commercial shipment crossing into Canada needs a customs invoice — either a Canada Customs Invoice (CCI, Form CI1) or a standard commercial invoice with the same information: seller and buyer details, detailed product description, quantity, unit and total value, country of origin, and HS code (first six digits minimum). For USMCA preferential treatment, add the certification statement.
For shipments over CAD $3,300 (or any shipment requiring a formal entry), you'll need a Business Number (BN) from the CRA if you're the importer of record. This is separate from the customs broker's BN — the importer needs their own. Free to obtain through CRA's Business Registration Online. Takes about 10 minutes.
Most US businesses use a Canadian customs broker to handle the entry. The broker files electronically with CBSA, pays the duty and GST on your behalf (or your customer's behalf, for DDU shipments), and bills you the duties plus their fee. For regular shippers, set up a broker relationship before your first shipment — the border crossing is smoother when your broker already has your BN and preferred payment method on file.
Related Calculators
For cross-border comparisons: our China to Canada calculator covers the non-USMCA lane (Chinese goods pay full MFN rates), and our China to US Electronics calculator shows the parallel US import regime for comparison.
Frequently Asked Questions
Do US goods shipped to Canada pay import duty?
Most don't. USMCA eliminates tariffs on goods that meet the origin rules — at least 60% US/Canadian regional value content or wholly obtained in the US. For qualifying goods: 0% duty.
Non-qualifying goods (including Chinese-made products shipped from US warehouses) pay Canada's MFN rates, averaging around 5%. Even at 0% duty, 5% federal GST still applies. And provincial sales tax adds another 0% to 10% depending on the destination province.
What is the de minimis threshold for shipping from the US to Canada?
Three tiers: under CAD $40 — no duty, no tax, completely free entry. $40–$150 — duty-free but GST/HST applies on the full value. Over $150 — full duties and taxes kick in.
These are per-shipment, assessed on the goods value. Shipping cost isn't counted toward the de minimis threshold. A $38 item with $25 shipping = under $40 threshold = clean entry. A $42 item with $1 shipping = over $40 = GST/HST applies.
How do I avoid surprise brokerage fees when shipping from the US to Canada?
Ship USPS/Canada Post for anything under $200. Canada Post charges a flat $9.95 handling fee, and for items under $150 (duty-free tier) there's often no fee at all. UPS and FedEx Ground charge brokerage that can exceed the actual duties, especially on low-value shipments. Their air/express services include brokerage, but the shipping rate is higher.
For B2B or higher-value shipments, ship DDP (Delivered Duty Paid) through your broker — you pay the duties and taxes upfront and the recipient gets a clean delivery. The brokerage fee gets bundled into your broker's rate rather than billed as a surprise to your customer.
How does US-to-Canada duty compare to Canada-to-US duty?
The rates are different in each direction. US-to-Canada: 0% under USMCA for qualifying goods, 5% MFN for non-qualifying, plus 5% federal GST and provincial taxes. Canada-to-US: 2.5% average MFN (the US has generally lower base MFN rates than Canada), no USMCA-equivalent for most categories since USMCA covers both directions equally. The practical difference: Canadian importers face higher base MFN rates plus GST; US importers face lower MFN rates and no federal sales tax at customs. See our US to Canada and UK to US calculators for the reverse-direction math.