If you picked up a newspaper this past summer, chances are you came across a headline (or ten) about the new NAFTA agreement. Hotly debated, and tensely agreed upon, the new agreement emerged under the newly minted name USMCA (United-States-Mexico-Canada Agreement) at the end of September, and it contains within it some good news for online shoppers.
Whereas before, consumers had to pay GST, HST and duties on purchases from the United States over $20 – a threshold set way back in 1985, and unchanged until now – the new threshold (for duties) has been set at a much more reasonable $150. It’s a move meant to bring Canadian consumerism in the 21st Century, and it will impacts on both consumers and merchants.
Consumer Benefits
What was immediately clear to all who heard the news was that this was a big win for Canadian consumers. When shopping online before, Canadians had to pay duties on all but the least expensive items, but with the new USMCA deal in effect, Canadians will be able to shop for bigger ticket items without incurring an additional cost.
For those in more remote parts of this giant country, the news ensures that they can buy basic items online from US merchants for less than before. Couple the higher threshold for duties with netParcel’s economy international shipping services – offering the cheapest rate on cross border courier shipping – and there’s never been a better time than the present to be an online consumer.
Merchant Benefits
If you are an online merchant based in the US, you can expect an uptick in international business coming from Canada. Whereas the de minimis threshold’s taxes and duties were a strong deterrent for Canadian buyers in the past, with the threshold higher, Canadians are more likely to browse international options. As always, netParcel is here to help: using our service, your online business will have access to the cheapest shipping options from the USA to Canada, which can further improve sales and reduce shopping cart abandonment.
“Express Shipments” Stipulation
It’s as yet unclear what this part of the deal actually means, but the new deal states that the higher thresholds will apply to “express shipments”. Some, including a spokesperson for eBay, have speculated that this means the $150 limit won’t apply to shipments made through standard mail. While consumers might have cause to worry that this will mean higher shipping costs (potentially offsetting savings on duties), netParcel reminds you that we still offer the cheapest international shipping from Canada and the US through express carriers. Even if the deal excludes regular mail, you will still have the option to ship cheaply.
With deal agreed upon, there will still be review period of 60 days, so you can expect the higher de minimis threshold to kick in sometime around the beginning of December, just in time for your holiday shopping. And while the news means that Canadian retailers will have to work a bit harder to entice Canadian consumers, it’s still a net positive step for Canadian buyers. If you want to add cheap shipping to the reduced threshold for duties, visit our netParcel site and sign up!
