How Canada’s New Import Rules Impact Holiday Shopping & Retailers

The holiday shopping season is a high-stakes time for both consumers and retailers. This year, a significant change is looming that could alter the landscape of online shopping in Canada. The federal government is moving forward with a plan to scrap the long-standing $20 duty-free exemption for cross-border online purchases, a policy known as “de minimis.” For decades, this rule has allowed Canadians to import goods valued under $20 without paying duties, taxes, or handling fees. Its potential removal is sparking a major debate, pitting small Canadian retailers against bargain-hunting shoppers and international e-commerce giants.

What is the De Minimis Threshold and Why is it Changing?

In simple terms, the de minimis threshold is the value below which imported goods are exempt from tariffs and taxes. Canada’s threshold has been $20 for over 40 years, one of the lowest among developed nations. The United States, by comparison, has an $800 de minimis.

The push to eliminate this exemption is driven by two main arguments from Canadian retailers and labor groups:

The government has signaled that adjusting this rule is a priority, framing it as a matter of tax fairness and support for homegrown businesses.

The Direct Impact on Holiday Shoppers

For consumers, the end of the $20 exemption could mean a noticeable change in the cost and convenience of online shopping.

Higher Costs at Checkout

The most immediate effect will be financial. That $15 phone case, $18 book, or $10 pack of socks ordered from an international site may no longer arrive with just the listed price and shipping. Once the exemption is gone, these items could be subject to:

Suddenly, a bargain can become significantly more expensive. The carrier’s fixed handling fee, in particular, could make small purchases economically impractical.

Shipping Delays and “Customs Surprise”

Your holiday packages might also take longer to arrive. Without the blanket exemption, more parcels will need to be processed by the Canada Border Services Agency (CBSA). Furthermore, shoppers may face the dreaded “customs hold” notice, requiring them to pay fees before their package is released for delivery—an unwelcome surprise during the busy holiday season.

Winners and Losers in the Retail Landscape

This policy shift creates clear divisions in the retail world.

Canadian Brick-and-Mortar and Online Retailers

For local businesses, this is largely seen as a victory. The hope is that by removing the tax advantage for low-value foreign goods, consumers will be more inclined to “shop local,” both online and in physical stores. Sectors that heavily compete with direct-to-consumer imports from Asia, like apparel, accessories, and small electronics, could see a boost.

E-Commerce Giants and Marketplaces

Companies like Amazon, Shein, Temu, and Alibaba’s AliExpress, which thrive on high volumes of low-cost goods shipped directly from overseas warehouses, are poised to be most affected. Their business model relies on fast, cheap, and predictable delivery. Adding taxes, duties, and potential fees complicates the checkout process and could dampen consumer enthusiasm. They may be forced to adjust strategies, potentially by absorbing some costs or establishing more Canadian-based fulfillment.

Logistics and Courier Companies

Carriers like Canada Post, UPS, and FedEx will face a massive administrative burden. They will be responsible for collecting taxes and duties on a vastly increased number of small parcels, a complex and costly process.

Navigating the New Rules: Tips for Savvy Holiday Shoppers

With change on the horizon, a proactive approach can help you save money and avoid frustration this holiday season.

The Bigger Picture: Fairness vs. Consumer Choice

The debate over the de minimis threshold is ultimately a clash of principles. On one side is the argument for tax fairness and sovereign retail policy, ensuring all businesses operating in the Canadian market contribute equally. On the other is the principle of consumer choice and access to global markets, where shoppers benefit from competition, variety, and often lower prices.

As Canada moves to align its policies with its economic priorities, the 2024 holiday season may serve as a pivotal test. Will consumers readily shift their spending to domestic retailers, or will they absorb the higher costs and continued complexity of cross-border shopping? The outcome will shape the future of Canadian e-commerce, redefine the meaning of a “good deal,” and determine whether the goal of a more level playing field has been achieved.

One thing is certain: the days of tax-free, fee-free small purchases from abroad are numbered. For both shoppers and businesses, adapting to this new reality will be the key to navigating a successful and less stressful holiday season.