So long, Trader Joe’s, T.J. Maxx, gasoline by the gallon. We hardly knew you.
Since U.S. President Donald Trump’s imposition of 25 per cent tariffs on Canadian goods went into effect Tuesday, and the imposition of retaliatory tariffs by the Canadian government, Canadians who choose to cross-border shop and individuals returning from travel in the U.S. will be paying a hefty surtax at the border on top of regular duties and taxes.
Casual U.S. imports by travellers who exceed their personal exemption limits — whether it’s a carry-on full of Disney souvenirs or a load of groceries — are subject to a surtax of 25 per cent on the “value for duty,” in accordance with the Canadian government’s “United States Surtax Order (2025).”
For example, if your items are $1,000 over your personal exemption, you would be charged applicable duties, GST and a $250 surtax.
Here’s what to expect if you bring goods across the border:
Who does border surtax apply to?
The surtax applies to individual travellers and cross-border shoppers, as well as commercial shipments, and goods purchased online and imported by mail or courier.
How much can I bring in without having to pay surtax?
Travellers exemptions allow returning residents of Canada to bring back goods up to a specified dollar limit on a duty- and tax-free basis when returning to the country. Canadians are still allowed to bring goods worth up to $200 if they have been out of the country for 48 hours, or $800 if they have been out of the country for more than 48 hours.
Who do I pay?
For personal goods, the surtax is assessed by the Canada Border Services Agency at the port of entry. Individuals travelling with the goods will pay at the port of entry and individuals shipping goods through the mail or courier will pay upon delivery, according to the CBSA.
The CBSA recommends all travellers have their purchase receipts “in-hand” to avoid delays at the border.
What if I purchase American-made goods online?
The surtax also applies to online purchases by individuals. The CBSA explained that they’re working with trade partners like customs brokers, couriers and financial institutions, to implement the surtax changes, as quickly as possible, in all streams of importation, including with the Universal Postal Union for the postal stream.
What is subject to surtax?
The surtax will be applied on goods if a traveller doesn’t qualify for or exceeds their personal exemption, said the CBSA. The list of goods ranges from poultry and pig fat to bombs, torpedoes and aircraft.
What if I come home by plane?
The surtax will be applied no matter what your point of entry into Canada is.
Are there any exemptions?
The surtax will not apply to U.S. goods that are in transit to Canada on or before March 4, and a few other select items.
How long will it remain in place?
The point-of-entry surtax will remain in place until the U.S. eliminates its tariffs against Canada, said the CBSA.
Could there be further changes?
Yes. The CBSA said it works “in an operating environment that changes on a daily basis and we are ready to respond and adapt as needed.”
Craig Patterson, the founder of Retail Insider, said this will have a huge impact on a cross-border shopping pattern already challenged by the low Canadian dollar.
“If individuals have to pay a tariff over a personal amount, that will deter people from shopping in the United States, and will impact consumer behaviour. If people are getting stopped or having to pay it, that eliminates any value in terms of saving money.”
Common cross-border shopping habits among Canadian consumers include maintaining a PO Box in Blaine, Bellingham or Sumas, Wash., to avoid paying international shipping fees, driving across the border for cheaper gas, milk and staples, and for some, said Patterson, annual shopping trips to New York, Palm Beach, Fla., or Los Angeles “to buy goods they can’t get elsewhere.”
“This could be a boon for Canadian retailers as Canadians change their habits and start shopping at home,” said Patterson.