With CUSMA now fully in force and NAFTA in the past, big changes have been made to low value shipments coming to Canada from the US or Mexico by courier. These shipments are known as CLVS (Courier Low Value Shipments). Let’s take a look at these changes and see which shipments are affected and how.
Courier Low Value shipments are shipments brought in by couriers registered in the CLVS program. These include the major carriers such as Fedex, UPS, and DHL. For the shipment to qualify as low value prior to CUSMA, the declared value of the shipment would have to be under $2500CAD. The terms of CUSMA stipulate that the limit for the value has been raised to $3300CAD. The difference between low value and high value shipments is that with high value shipments a customs release is required prior to delivery. With a courier low value shipment, the courier is authorized to deliver to the importer, and then send the documents to the broker for accounting purposes.
The first change to the CLVS program is that goods under $20 from anywhere are exempt from duty or GST. Goods from US or Mexico are exempt from duty or GST if they are under $40. Note that goods not made in the US or Mexico are given the same exemption as long as they entered into the commerce of US or Mexico before coming to Canada.
The second change applies to goods from US or Mexico valued between $40.01CAD and $150.00CAD. These goods are now exempt from duty. GST of 5% is still applicable to commercial goods. For personal shipments, HST or PST and GST (depending on your province of residence) is applied. This also applies to goods that don’t originate in the US or Mexico, but have entered into the commerce of either of those countries prior to coming to Canada.
Goods are said to have entered into the commerce of a country prior to coming to Canada when those goods have cleared customs into the US or Mexico. Some couriers route shipments from all over the world into Canada through the US. For example, a Fedex shipment from China to Canada may travel in-bond through Kentucky to Canada. The goods are not considered to enter into the commerce of the US because the goods were just moving in-transit through the US. If the goods travelled from China to the US, cleared customs, and then were shipped to Canada, those goods would be considered to have entered into the commerce of the US.
CLVS changes are some of the bigger differences between the NAFTA and CUSMA agreements. If you have any questions regarding the Courier Low Value Shipment program or any other import related questions, please contact us or click here for a free quote on our services