Cutting Out the Duties

Despite an immense growth in ecommerce on a global scale, the Canadian market today is still largely dominated by traditional brick and mortar retail. Statistics Canada estimates that ecommerce accounted for roughly 2.3% of all sales made in Canada during 2016. While it’s clear that the traditional retail sector in Canada will not be replaced anytime soon by the online world, increasing digital adoption continues to expand, offering customers added variety and convenience.

De Minimis in the Canadian Context: To Raise or Not to Raise

So where do we, in Canada, start? One key concept impacting both businesses and consumers in Canada when it comes to online retail is the threshold value of foreign goods that are subject to duties or taxes. Trade gurus refer to this as “de minimis” — a Latin expression meaning, literally translated: trivial things. The Canadian de minimis threshold — one that has remained unchanged since the early 1980s — is subject to fractious debate. On the one hand, some in the Canadian retail sector argue that a low de minimis is necessary to protect the Canadian marketplace. On the other hand, advocates for raising the de minimis indicate that increased online retail would help small businesses, boost productivity in other sectors of the economy such as the postal service or transportation, while simultaneously offering benefits to customers.