Canada-United States-Mexico Agreement impact on Canada Post: Committee of the Whole—July 8, 2020
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Context
The Canada-United States-Mexico Agreement (CUSMA) trade agreement entered into force July 1, 2020.The agreement raises duty-free limits for private couriers and not Canada Post.
Note
All questions relating to the design and composition of CUSMA should be directed to the minister of Foreign Affairs.
Suggested response
- Canada Post is committed to providing high-quality postal services to Canadians at a reasonable price
- As an arm’s length Crown Corporation, Canada Post collects all duties and taxes on postal items inbound for Canada as determined by the Canada Border Services Agency (CBSA)
- Canada Post mail items are processed through the postal clearance process; as a result, new tax and duty free limits set in the CUSMA trade agreement will not apply
- Imported shipments under $20 sent via Canada Post will continue to be exempted from the assessment of applicable taxes and duties
Background
Currently, the regulations applicable to both the postal and low value courier stream exempts imported shipments under $20 from the assessment of applicable taxes and duties.
CUSMA increases Canada’s tax and duty free limits for products sent from the United States and Mexico, from $20 to $40 (tax) and $150 (duty). CUSMA limits apply to product accessing the courier low value shipment (CLVS) clearance process, a system used by private sector couriers such as UPS, FedEx and Purolator and other consolidators sending product cross border.
Canada Post and the United States Postal Service do not use the CLVS stream for product. Postal items are processed through the postal clearance process; as a result, limits set in the new agreement will not apply.
Canada Post collects all duties and taxes on inbound items as determined by CBSA.