Shipping Gifts Into Canada | A Tale Of How A Tablet's Not A Turnip

Shipping Gifts Into Canada | A Tale Of How A Tablet's Not A Turnip

In preparation for the gift-giving season, we would like to share with you a cross-border holiday tale about one tablet's journey to the Canadian border.

A US supplier of produce wanted to say thank you to its Canadian purchaser by way of a gift. A few days before Christmas, the supplier slipped in a popular tablet with the purchaser's order. Although this was a very nice gesture, it came with a very large consequence for the unknowing purchaser, who was the importer of record.

Upon random inspection at Canada Customs, the Border Services Officers were surprised to find the tablet nestled all snug in a box of turnips. Even more surprising was it was not included in the Canadian Customs invoice. The tablet quickly went from a grand gift to a lousy lump of coal.

The shipment of turnips (and the tablet) was seized by Customs, and the importer was inadvertently 'gifted' a $2,000 penalty. To top it off, they did not get to keep the tablet, and it was returned to the sender.

Moral of the story is, know before you go!

With the holiday season upon us, many businesses and individuals send and receive gifts that cross borders. Whether you are sending corporate gifts, shopping online, or sending gifts by mail, being aware of cross-border clearance can make you feel like a modern-day Santa.

Tips for Sending Gifts from a Business to a Business

Don’t Send the Gift of Extra Charges

When sending a gift Business to Business (B2B), it is imperative you ensure you have arranged for Customs clearance prior to shipping the gift. After all, you may not want clients receiving a hefty bill with the holiday gift you sent them. Customs and your customs broker will need the gift to come with a pro forma invoice along with the same detailed information that would be required if it was a standard import. 

Need a Customs Invoice? Download Yours

Just like when shipping everyday goods, it is vital when sending gifts into Canada that you declare their accurate commercial value. For import duties, the Canadian Border Services Agency (CBSA) does not believe in the charitable spirit of the holiday and will not accept inaccurate valuations. 

The Holiday Spirit May Cost More

One of the more popular gifts shipping into Canada this holiday season is alcohol, but be careful, as there are serious pitfalls to consider before you start the import process. Most notably, alcohol is subject to a barrage of high duties and excise tax rates. Every shipment of alcohol is routed through a board, commission, or governmental agency that is legally authorized to sell intoxicating liquor. That means you’ll end up paying more duty on those gifts when they are imported into Canada - despite them being gifts. 

The good news is that you can take an alternate route that might remove some of the financial sting. While alcohol, as a highly regulated good, is not exempt from import duties, wineries, and liquor stores that are already in Canada can often be contacted to ship on your behalf. 

A Basket Full of Troubles

Here’s a question you might not have considered before - what are the goods you have to declare in a gift basket? Is it all one thing because it’s in a wrapped basket? 

In the simplest terms, a gift basket is its constituent items, and what items are exempt or zero-rated for import duties and which are regulated in that basket can mean a real headache at the border. Some items like meats, cheeses, fish, and plant products require additional paperwork and official certifications from the country of export, as well as potentially attracting a staggering amount of other duties. 

Add to that issues in processing that can come up due to the small quantities of the shipped goods, and in almost every case, you’re better off avoiding it. If you are committed to importing a basket into Canada, we recommend you aim for ones made up of mugs, candles, and board games - avoid anything from animals or animal by-products. Doing this won’t necessarily bypass all the issues but is a step in the right direction.

Tips for Shopping for Holiday Gifts Online

You might be thinking, “When bought online, do you pay Customs on gifts to Canada?” 

The answer to that question is the same as it always is when discussing the matter of ‘paying customs’ (better known in this case as duties and taxes) - it depends on the situation.

The easiest way to know what is involved is by checking the seller’s terms of sale and delivery. In doing so, you will discover who is responsible for paying the Customs fees on the gift you’re shipping into Canada. 

If this is a gift for an individual in Canada, you may find this imported item is exempt from duty entirely, but Canada Customs has gift limits to ensure the system isn’t abused. 

The short version is that gifts that are not controlled or regulated substances and are under $60 may pass duty-free when shipped by post. For a full breakdown of the rules directly from the source, we encourage you to look at the CBSA Declaration Guide

If this is a more significant online purchase, the Customs clearance requirement for personal, non-commercial entries requires an invoice, the product’s country of origin, currency, and a complete product description.

Tips for Mailing Personal Gifts to Family and Friends

Arguably the most straightforward of the gift-purchasing scenarios, the only real pitfalls that await you with this are the ones that are present with all imports - misdeclarations, additional paperwork for regulated goods, and the cost that is sometimes associated with importing anything into Canada. 

Still, before you ship, there are some things to consider: 

  1. For an item to be a ‘gift,’ it must be qualified as such and include a Customs declaration. 
  2. It must be sent between individuals. 
  3. If the gift is less than $60 in value, it can cross duty-free, but if it is more, you will have to pay the duties and taxes on the difference. 
  4. Certain regulated items do not qualify for this exemption:
  1. Tobacco
  2. Alcoholic beverages
  3. Advertising materials
  4. Items sent by a business

It should also be obvious, but the $60 gift exemption cannot be combined with the $20 exemption available on most items valued at $20 or less. It is also worth mentioning that these tips and regulations are applicable all year round - not just during the holiday season. 

As always, if you are looking for in-depth guides on the rules and regulations at a granular level, we encourage you to head over to the CBSA Importing to Canada Guide or the documentation on what CBSA considers a ‘gift.’ 

Alternatively, contact our Import Team if you just want someone to handle the whole process from start to finish. We’ll take the reigns and ensure you and yours have a headache-free holiday season!

Disclaimer: While reading, kindly note the date of this blog. At PCB we do our due diligence to write on the most relevant topic every week and naturally content may become dated as developments in a certain program/topic occur. For this reason, we greatly appreciate your readership and hope you continue reading with the posting date in mind. For the latest information on this topic please use our website's search function, or better yet, subscribe to our "Trading Post" newsletter to receive these updates directly to your inbox.
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About the Author
Gloria Terhaar
CCS (CA/US), CTCS, CBSA Prof. Designate

Gloria Terhaar began her career in Canadian customs brokerage 2007. She currently works in our Canadian division as a Trade Compliance Supervisor and Regulatory Compliance Specialist. Gloria has extensive experience in all aspects of documentation and regulatory requirements as they relate to importing products into Canada. Gloria is often called upon to train industry with some recent talks for MNP, the Surrey Board of Trade, TFO Canada and the BC Produce Marketing Association. In 2018, Gloria also participated in the Canadian Produce Marketing Association and the Canadian Horticultural Council advocacy event "Fall Harvest" in Ottawa where she participated in advocacy efforts for the Canadian produce industry.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.