BUSINESS

Black Friday 2014: Hidden Fees Canadians Pay For Shopping Online

11/28/2014 05:00 EST | Updated 01/28/2015 05:59 EST
Adam Gault via Getty Images
While American shoppers celebrate Black Friday and Cyber Monday —​ the biggest sales of the year in the U.S. —​ Canadians looking to save by shopping online could face some hidden costs.

Purchasing from stores outside Canada mean shoppers get hit by duties, taxes and other fees that quickly add up.

A few examples:

- A Quebec resident who spends $100 on baby clothes will pay $35.11 in duties and tax.

- A British Columbia resident who buys a tricycle worth $100 will pay another $32.16 in duties and tax.

- A Nova Scotia resident who buys $100 in bedroom furnishings will pay 35.70 in duties and tax.

On top of that, Canadians can pay courier and customs brokers fees that companies charge for delivery as well as processing and collecting those duties and taxes. And since the items being ordered are priced in U.S. dollars, the exchange rate conversion to Canadian funds will add roughly 15 per cent. It can all make for a surprisingly large final bill. 

​How much duty do you pay? That depend on the product and where it was made. Duty can cost anywhere from nothing to, in some cases, upwards of 100 per cent of the cost of the item. 

The Senate finance committee recommended nearly two years ago that the government look at raising the minimum a Canadian can have shipped over the border before they have to pay duties. That's known as the de minimis threshold: it kicks in at $20, which is one of the strictest thresholds in the world.

The Senate committee isn't the only group that has suggested upping the threshold.

Online auction site eBay told the House finance committee this fall that Canada should raise the threshold to $200, which would be on par with the limit Americans face and the same limit that's applied to Canadians who spend a day outside the country for their purchases (though Congress is considering raising the American limit to $800 US).

​The de minimis threshold in Canada was $40 until 1992, when it was lowered following pressure from Canadian retailers and mail-order firms to level the playing field.

Karl Littler, a spokesman for the Retail Council of Canada, says consumers should bear in mind that they'd be paying anywhere from five to 15 per cent sales tax depending on which Canadian province in which they shop.

"If people are buying online and those goods are waived through scot-free, then that's going to be really, really difficult for Canadian bricks and mortar retailers to compete with," Littler said.

"Retail's a tough business and retailers do what they can to offer the best price, but to compete with one hand tied behind your back is going to be very difficult."

CBC News Network's Power & Politics convened Conservative MP James Rajotte, chair of the House of Commons finance committee, NDP industry critic Peggy Nash and Liberal finance critic ScottBrison to debate raising the threshold. 

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