With our strong Canadian dollar worth more than the American greenback more Canadians are shopping online searching for bargains. While most Canadians know they will have to pay shipping and taxes to buy an item in the United States, many are surprised when they also have to pay duties and brokerage fees.
Sean Valentini of Toronto normally shops in Canada, but turned to the internet to find his wife an Italian hand cream not available here. He bought two jars online for $100 plus $17 dollars for shipping. Valentini says "I was very surprised when the UPS delivery man came to my door and then demanded another $68.41 before I could accept the package."
Valentini was charged another $24.23 in duty and taxes and $44.18 in brokerage fees.
"To be charged more then 40 per cent of what the product is worth in brokerage fees seems rather excessive," said Valentini.
CTV has heard from many viewers upset with high brokerage fees.
Simon wrote "I was just charged fees of $45 dollars for an $89 used item shipped from the U.S. That's highway robbery!"
We also heard from Anthony who told us, "I bought a vase on eBay for $49. Shipping was $20 and the broker fee was $29. It ended up costing me twice as much as I thought it would."
UPS is also facing a class action lawsuit in regard to brokerage fees.
On February 19, 2007, Siskinds filed a class proceeding against United Parcel Service Canada Ltd. ("UPS") on behalf of Ontario residents and all other provinces (excluding BC and Quebec) with respect of the brokerage fee(s) charged on the shipment of goods from outside of Canada. The lawsuit further claims that UPS failed to obtain consumers' consent to act as a customs broker; to disclose the existence and/or amount of the brokerage fee; and to provide consumers with the opportunity or disclose to them how to arrange for customs clearance by themselves.
UPS declined to be interviewed for this story, but the company did answer questions by e-mail.
UPS told Â鶹´«Ã½ "In Canada, all inbound courier shipments with a value exceeding $20 CAD require customs clearance by a licensed broker to ensure they are legally entitled to enter the country and that applicable duties and levies are paid. A Brokerage fee is charged by customs brokerages such as UPS to process a shipment and present the customs paperwork to Canada Border Services Agency on behalf of the Canadian importer. The customs clearance procedure requires the broker to perform, on behalf of the importer, a number of tasks, including (but not limited to) auditing import documentation, classifying the commodity being imported, as well as preparing and transmitting accounting information to Canada Border Services Agency. This process helps expedite clearance at the border. Without this service, consumers and businesses would be responsible for processing their own border clearance paperwork — a complex, time-consuming and inconvenient process."
UPS also said that all brokerage fees are listed on its website.
Consumers hoping to avoid expensive brokerage fees may be able to do so by choosing a more expensive courier option which will include customs clearance. They can also use the U.S. Postal Service which can eliminate or lessen brokerage fees.
Some Canadians near U.S. border cities are also taking post office boxes on the American side and having their items shipped there. Anyone doing this is still obligated to pay duty and taxes when bringing goods across the border.
Bottom line? When shopping online make sure you take in to account not just the selling price but shipping, taxes, possible duty and brokerage fees to determine if it really is a good deal or if you may be better off trying to find the same product in Canada -- and support Canadian business.
Key Points:
- Common complaints include unexpected shipping charges for duties, taxes and customs brokerage fees
- Duties can range from zero to more than 18 per cent, depending on the product and where it originates from
- The federal GST, the PST and any excise tax is added on top of whatever duty is charged
- Private courier services like UPS Canada charge a customs brokerage fee, which can run between $7 (for items costing about $20-$40) and $78.50 (for items costing between $1600 and $5000)
- The Canada Border Services Agency is responsible for enforcing the Customs Act but customs brokerage fees are unregulated
