Goods imported into Canada generally owe two charges at the border: the 5% federal Goods and Services Tax (GST) and a customs duty that varies by product and country of origin. Depending on the destination province, that GST may be replaced by a Harmonized Sales Tax of 13% to 15%, and certain goods carry excise duties, a luxury tax, or one of the surtaxes Canada currently applies to U.S. steel, aluminum, and vehicles. The rules on duties and taxes on imports into Canada are enforced by the Canada Border Services Agency (CBSA), which since 2024 handles most commercial accounting through its CARM digital platform.
GST and HST at the Border
The 5% GST applies to nearly every shipment entering Canada. It is calculated on the Canadian-dollar value of the goods plus any customs duty and excise tax already applied, so tax is charged on the duty, not just the product price.1Canada Revenue Agency. GST/HST on Imports and Exports
Five provinces have folded their provincial tax into the federal rate to create a single Harmonized Sales Tax. If your goods are destined for Ontario, the rate is 13%. New Brunswick, Newfoundland and Labrador, and Prince Edward Island charge 15%. Nova Scotia dropped to 14% on April 1, 2025.2Canada Revenue Agency. Charge and Collect the GST/HST
In British Columbia, Saskatchewan, Manitoba, and Quebec, the CBSA collects only the 5% GST at the border. The provincial sales tax (PST or QST, from 6% in Saskatchewan to 9.975% in Quebec) is administered separately and may show up at retail or on delivery of some online purchases.
Customs Duty Rates
Customs duties are set under the Customs Tariff. Every product carries a 10-digit tariff classification number based on the international Harmonized System, and the rate depends on that classification plus the country of manufacture.3Canada Border Services Agency. Guide to Tariff Classification for Canadian Imports – The Origins of Tariff Classification
Under the Canada-United States-Mexico Agreement (CUSMA), more than 98% of tariff lines carry a 0% duty rate on qualifying North American goods.4Trade Commissioner Service. Understanding CUSMA Compliance To claim that rate you need a certification of origin completed by the exporter, producer, or importer. Without one, the CBSA defaults to the Most-Favoured-Nation (MFN) rate even when the goods actually qualify.
MFN rates apply to goods from any country without a preferential trade agreement with Canada, or to goods that fail an agreement’s rules of origin. They range from 0% on many raw materials to 20% or more on some finished products. Goods from a small number of countries without MFN status, such as North Korea, face the higher General Tariff.5Canada Border Services Agency. Memorandum D11-4-3 – Rules of Origin Respecting the Most-Favoured-Nation Tariff You can look up a specific rate on the federal government’s Canada Tariff Finder.
Surtaxes on U.S. Steel, Aluminum, and Vehicles
Canada imposed a 25% surtax on a wide range of U.S. imports starting in March 2025 in response to U.S. tariffs on Canadian goods. Most of those surtaxes were lifted on September 1, 2025, but three categories remain in force at 25%:
- Steel products.
- Aluminum products.
- Automobiles: non-CUSMA-compliant U.S. vehicles, and the non-Canadian, non-Mexican content portion of CUSMA-compliant U.S. vehicles.
The surtax is charged on top of any regular customs duty, and GST or HST is then calculated on the combined total.6Department of Finance Canada. Canada’s Response to U.S. Tariffs on Canadian Goods A $50,000 shipment of U.S. aluminum goods owes $12,500 in surtax alone before GST. Canada’s Duties Relief and Duty Drawback Programs may offer relief on goods that are re-exported, but for goods sold or consumed domestically the surtax sticks.7Canada Border Services Agency. Customs Notice 25-10 – United States Surtax Order (2025-1)
Low-Value Shipment Thresholds
Small packages can escape duty and tax entirely, but the thresholds depend on how the goods arrive and where they ship from. For goods shipped by courier:
- From the U.S. or Mexico, valued at $40 CAD or less: no duties, no GST/HST, no PST.
- From the U.S. or Mexico, valued between $40.01 and $150 CAD: no customs duty, but GST/HST and any PST still apply.
- From the U.S. or Mexico, valued above $150 CAD: full duties and taxes.
- From any other country, valued at $20 CAD or less: no duties or taxes.
For goods shipped by mail, the threshold is $20 CAD regardless of origin. Anything above that is fully assessable.8Canada Border Services Agency. Increase to Low-Value Shipment Thresholds and Other Changes Alcohol, tobacco, and goods that were split across multiple shipments to stay under the threshold do not qualify.
Excise Duties on Tobacco, Alcohol, and Fuel-Inefficient Vehicles
A few categories carry excise duties on top of customs duties and sales tax. Tobacco, spirits, wine, cannabis, and vaping products are taxed under the Excise Act, 2001; fuel-inefficient vehicles are taxed under the Excise Tax Act.9Department of Justice Canada. Excise Act, 2001
Tobacco is taxed by unit. As of April 1, 2026, cigarettes are subject to $0.97299 per five cigarettes.10Canada Revenue Agency. EDN105 Adjusted Rates of Excise Duty on Tobacco Products Effective April 1, 2026 Spirits are taxed by alcohol content: $14.117 per litre of absolute ethyl alcohol as of April 1, 2026. Wine ranges from $0.022 per litre for very low-alcohol product up to $0.745 per litre above 7% alcohol by volume.11Canada Revenue Agency. Excise Duty Rates Tobacco and alcohol rates are adjusted annually, typically in April.
Fuel-inefficient vehicles owe a separate excise tax, sometimes called the Green Levy, based on fuel consumption:
- 13 to under 14 litres per 100 km: $1,000.
- 14 to under 15 litres per 100 km: $2,000.
- 15 to under 16 litres per 100 km: $3,000.
- 16 litres or more per 100 km: $4,000.
Excise charges are added to the value of the goods before GST/HST is calculated, so they compound the total.12Canada.ca. X3-1 Goods Subject to Excise Tax
Luxury Tax on High-Value Items
Since September 2022, a federal luxury tax applies to certain high-value items on sale or import:
- Vehicles priced above $100,000.
- Aircraft priced above $100,000.
- Vessels priced above $250,000.
The tax equals the lesser of 10% of the full taxable amount or 20% of the amount above the price threshold.13Justice Laws Website. Select Luxury Items Tax Act – Section 914Canada Revenue Agency. LTN3 Subject Vessels Under the Select Luxury Items Tax Act A vehicle imported at $120,000 owes the lesser of $12,000 or $4,000, so $4,000. The luxury tax applies in addition to customs duty, any surtax, excise tax, and GST/HST.
Personal Exemptions for Returning Travellers
Canadian residents returning from abroad can bring back a limited value of goods duty- and tax-free depending on how long they were away:
- Less than 24 hours: no exemption at all. Same-day cross-border shopping does not qualify.
- 24 hours or more: up to $200 CAD, excluding tobacco and alcohol, and the goods must be with you. If your total exceeds $200 CAD, you lose the entire exemption and owe duties on the full value, not just the overage.
- 48 hours or more: up to $800 CAD, and you may include limited quantities of alcohol and tobacco within that amount. The tobacco limit is 200 cigarettes, 50 cigars, and 200 grams of manufactured tobacco. The alcohol limit is 1.5 litres of wine, 1.14 litres of spirits, or 8.5 litres of beer.
- 7 days or more: same $800 CAD limit, but non-tobacco and non-alcohol goods can follow by mail or courier rather than being in your luggage.15Travel.gc.ca. Personal Exemptions Mini Guide
Gifts From Abroad
Gifts sent from a friend or relative outside Canada to an individual inside Canada are exempt from duties and taxes if the value is $60 CAD or less and the package includes a card or note identifying it as a gift. If the value exceeds $60 CAD, duties and taxes apply only to the portion above the threshold. Tobacco, alcohol, and items sent by or to a business do not qualify as gifts regardless of value.16Canada Border Services Agency. Importing by Mail or Courier – Gifts
How the Amount Is Calculated
Three inputs drive your total: tariff classification, value for duty, and country of origin.
Classification is a 10-digit number from the Harmonized System, the first six digits of which are used by customs agencies worldwide. The wrong number means the wrong rate and potential penalties later on audit.17Global Affairs Canada. Tariff Information and Harmonized System (HS) Codes
Value for duty is normally the transaction value: the price actually paid or to be paid for the goods sold for export to Canada, including any indirect payments to the seller.18Canada Border Services Agency. Transaction Value Method of Valuation Memorandum D13-4-1 It has to be documented on a commercial invoice or Canada Customs Invoice showing the price in the original currency.19Canada Border Services Agency. CBSA Invoice Requirements Values are converted to Canadian dollars using the Bank of Canada rate in effect on the date the goods were shipped directly to Canada, not the order date or arrival date.20Canada Border Services Agency. Memorandum D13-2-3 – Exchange Rate for the Calculation of the Value for Duty Under the Customs Act
Country of origin decides which rate applies. To get a preferential rate under CUSMA or another agreement, you need a certification of origin, usually a statement on the commercial invoice or a separate form completed by the exporter or producer. No certification, and the CBSA charges the MFN rate.
Paying at the Border
Commercial importers pay through the CARM Client Portal, online banking, or electronic data interchange. The CBSA prefers electronic payment.21Canada Border Services Agency. Commercial Import Payments – Duties, Taxes and Other Customs Dues Travellers pay at the CBSA Point of Entry by credit card, debit card, or certified cheque.
For mail and courier packages, the delivery service usually acts as customs broker: it pays the government and collects from you at delivery, adding a brokerage fee. Canada Post charges a flat handling fee (around $10 plus tax) on inspected packages. Private couriers such as UPS, FedEx, and DHL charge higher and less predictable fees, sometimes a flat rate and sometimes a percentage of the shipment value.
Self-Clearing to Avoid Brokerage Fees
You can bypass the courier’s fee by self-clearing. Refuse delivery, tell the courier you will pay duties directly at a CBSA office, and take the tracking number, commercial invoice, and personal ID to a local CBSA office that handles public accounting. Once you pay, the CBSA gives you a receipt to present to the courier for delivery.22Canada Border Services Agency. Importing Casual Goods by Courier The savings can be meaningful on higher-value packages, but the process takes time and depends on having a CBSA office nearby.
Penalties for Getting It Wrong
The CBSA enforces compliance through its Administrative Monetary Penalty System (AMPS). Providing incorrect or incomplete information on import documents (contravention C005) carries a $150 penalty on the first occurrence, $225 on the second, and $450 for each after that.23Canada Border Services Agency. Administrative Monetary Penalty System Contravention C005 The full Master Penalty Document lists dozens of contraventions.24Canada Border Services Agency. Administrative Monetary Penalty System – Master Penalty Document
Travellers who fail to declare or make false declarations can face penalties of 25% to 70% of the value of the seized goods. Not declaring food, plants, or animals can cost up to $1,300 regardless of the item’s value.25Travel.gc.ca. Be Sure . . . Declare Everything In cases of smuggling, persistent non-compliance, or fraud, the CBSA can seize the goods and any vehicle used to carry them, and pursue further action under the Customs Act.26Justice Laws Website. Customs Act – Section 110