Posted January 11th, 2017 at 9:00 AM Filed in: General Announcements
Today, eBay Canada launched the next step in our ongoing efforts to encourage the Canadian government to increase our customs de minimis threshold: We have issued a call to Canadian eBay members to sign a letter to Finance Minister, Bill Morneau.
The customs de minimis threshold is the value above which goods shipped into Canada are assessed for duties and taxes. Canada’s threshold has been set at $20 for more than 30 years.
EBay Canada has been consistently supportive of an increase in the de minimis because the low threshold hurts our economy:
- The $20 threshold prevents Canadian consumers from fully participating in ecommerce. This is particularly problematic for Canadians who rely on ecommerce to meet their daily needs – Canadians in remote and northern communities and those that are underserviced by traditional retail.
- The $20 threshold creates extra costs for Canadian small businesses. Most small businesses – including eBay sellers – rely on inputs from domestic and foreign suppliers. When a US seller can import $800 of supplies duty- and tax-free, while a Canadian seller has to pay duties starting at $20, it’s clear that the Canadian seller is at a competitive disadvantage. Similarly, Canada’s low de minimis creates extra costs when it comes to accepting international returns. While some taxes and duties charged to businesses can be recouped from the government, doing so creates an administrative burden that also increases the cost of doing business.
- The $20 threshold wastes Canadian taxpayers’ money. The CD Howe Institute, an independent think tank, studied the cost of collecting duties and taxes on low-value shipments. They found that the Canadian government spends approximately $166M to collect $39M in duties and taxes on shipments valued between $20 to $80. Canadian taxpayers are subsidizing this outdated policy.
Canada’s $20 threshold is also out of step with our international peers: In 2016, the United States raised its de minimis threshold from US$200 to US$800, Mexico’s threshold stands at US$300 for postal shipments, and the EU’s duty threshold is €150.
eBay Canada’s ongoing efforts to increase the de minimis are part of a broader set of activities aimed at supporting Canadian small business trade. They also align with work being carried out by eBay teams around the world to reduce frictions on small and medium business trade. Learn more.
I encourage you to support this initiative by signing the letter to Minister Morneau.
Managing Director, eBay Canada