Import Taxes and Duties in Canada: What Every Importer Needs to Know

When you import goods into Canada, two separate charges apply: customs duties and taxes. Most importers encounter both, and confusing the two, or miscalculating either, leads to unexpected costs when goods arrive at the border.

This guide explains exactly what import taxes Canada importers pay, how rates differ between business and personal shipments, and how the CARM system changed the way duties and taxes are collected and paid.

Want a quick estimate before you read on? Use our Duty & Tax Calculator to get an instant cost breakdown for your shipment.

What Are the Two Main Charges on Canadian Imports?

Customs duties and taxes are separate charges, calculated differently and paid through different processes. Getting clear on both upfront will save you from surprises at customs.

Customs duties are a percentage applied to the value of your goods, based on what you're importing and where it came from. The rate comes from Canada's Customs Tariff schedule and depends on the product's HS tariff code and its country of origin. Different goods attract very different rates.

Taxes (GST, HST, or PST) are consumption taxes applied on top of the duty-inclusive value of the goods. Unlike duties, tax rates are consistent across product types, but they vary based on whether you're importing commercially or personally, and which province the goods are destined for.

Understanding both is essential for calculating your true landed cost.

Customs Duties: How Much Will You Pay?

Canada's customs duty rates range from 0% to over 35%, depending on the product and its country of origin, but most goods imported from countries with free trade agreements enter Canada at 0% duty.

Canada has trade agreements with more than 51 countries, including the United States, the EU, Japan, and many others. Goods that qualify under agreements like CUSMA (Canada-United States-Mexico Agreement), CETA (Canada-EU), or CPTPP often come in duty-free, provided they meet the applicable rules of origin.

Duties are calculated on the "value for duty," which is generally the transaction value, meaning what you actually paid for the goods. Tariff classification determines which rate applies, and getting the classification right matters: an incorrect HS code can mean paying too much or triggering a compliance issue.

If you're regularly importing from a country covered by a free trade agreement, work with a customs broker to confirm your goods qualify. The duty savings are often substantial. Learn more about value for duty and how it affects your duty calculation.

Import Taxes for Business Importers

Commercial importers (those importing in a business name) pay 5% GST on most goods, and for GST-registered businesses, that tax is typically fully recoverable as an input tax credit.

GST is applied on the duty-paid value of the goods. For a registered business, the GST paid at the border is generally reclaimed against GST collected from customers, making the net cost of the import tax $0 in most cases.

Some goods are zero-rated under Canada's GST rules, meaning they're taxable at 0%. This includes:

• Prescription drugs
• Medical and assistive devices
• Basic groceries
• Agricultural and fishing inputs

For a full list of zero-rated goods, the Canada Revenue Agency publishes the applicable categories.

Import Taxes for Personal Importers

If you're importing goods for personal use, you pay GST (5%) plus your province's sales tax, bringing your total tax rate anywhere from 5% to 15%, depending on where you live.

Canada's provincial tax system means the rate varies significantly by province. Some provinces combine their tax with the federal GST into a single Harmonized Sales Tax (HST). Others collect GST and provincial sales tax separately at the border.

HST Provinces

Residents of these provinces pay a single blended HST rate that combines federal and provincial taxes:

• Ontario: 13% HST
• Nova Scotia: 14% HST (reduced from 15% effective April 1, 2025)
• New Brunswick: 15% HST
• Newfoundland & Labrador: 15% HST
• Prince Edward Island: 15% HST

GST + PST Provinces

These provinces charge federal GST and their own provincial sales tax as separate levies, both collected at the time of import:

• British Columbia: 5% GST + 7% PST = 12% total
• Manitoba: 5% GST + 7% PST = 12% total
• Quebec: 5% GST + 9.975% QST = 14.975% total
• Saskatchewan: 5% GST + 6% PST = 11% total

GST-Only Provinces and Territories

Alberta, Yukon, Northwest Territories, and Nunavut have no provincial sales tax. Importers pay only the 5% federal GST.

How CARM Changed the Way Duties and Taxes Are Paid

Since October 21, 2024, all Canadian importers of record must be registered on the CBSA Assessment and Revenue Management (CARM) system, and duty and tax payments are now made directly through the CARM Client Portal on a structured monthly billing cycle.

Before CARM, importers typically paid duties and taxes on a transaction-by-transaction basis through their customs broker. CARM replaced this with a centralized digital system that manages all duty and tax accounting directly between the CBSA and the importer.

Here is what the system requires of importers:

Registration: All importers of record must register on the CARM Client Portal and grant their customs broker access. Goods cannot be released if an importer is not registered.

Financial Security: To participate in the Release Prior to Payment (RPP) program, which allows goods to be released before duties are paid, importers must post financial security. This takes the form of either a surety bond covering 50% of anticipated monthly duty and tax obligations, or a full cash deposit held by the CBSA.

Billing Cycle: CBSA issues a Statement of Account on the 25th of each month. Importers review and pay through the CARM Client Portal.

A & A Customs Brokers can help you register, set up access, and ensure your CARM Client Portal account is configured correctly. If RPP financial security is required for your business, learn more about CARM surety bonds and how they work.

How to Estimate Your Import Duties and Taxes Before Goods Arrive

You can estimate your total import costs, duties plus taxes, before your shipment reaches the Canadian border, using A & A's free Duty & Tax Calculator.

Knowing your landed cost before you finalize a purchase or shipment lets you:

• Price goods accurately for resale
• Identify whether duty-free treatment applies under an FTA
• Avoid cash flow surprises when the CBSA Statement of Account arrives

To use the calculator, you'll need:

• A description of the goods (or HS tariff code if you know it)
• The transaction value (purchase price)
• The country of origin
• The destination province

Calculate your import duties and taxes now

For more complex shipments, particularly high-value goods, goods from multiple countries, or products that may qualify for preferential tariff treatment, a licensed customs broker can review the classification and identify cost-saving opportunities before goods ship.

Frequently Asked Questions

How much is import tax in Canada?

For commercial importers, the federal import tax is 5% GST on most goods. For personal importers, the total tax rate ranges from 5% (Alberta and the territories) to 15% (New Brunswick, Newfoundland & Labrador, and Prince Edward Island), depending on the destination province. Customs duties are calculated and charged separately, on top of taxes.

Do I pay GST on imported goods under $1,000?

Yes. Canada's de minimis thresholds are low compared to the United States. For most commercial imports, duties and taxes apply from CAD $1 of value. For courier shipments of goods purchased online, a threshold applies, but GST and duties are still charged once value exceeds certain limits. The exact thresholds depend on the import type and method of entry.

Do I need a customs broker to import into Canada?

Legally, no. Importers can self-file. In practice, most commercial importers use a Canadian customs broker to ensure correct classification, accurate duty and tax calculation, CARM compliance, and to avoid delays at the border. Errors in self-filed entries can result in penalties, reassessments, and shipment holds.

What goods are exempt from import duties in Canada?

Two categories are commonly duty-exempt. First, goods that qualify under Canada's free trade agreements, including CUSMA (from the US and Mexico), CETA (from the EU), and CPTPP countries, often enter at 0% duty when supported by proper documentation. Second, certain goods are zero-rated for GST purposes (prescription drugs, medical devices, basic groceries), meaning no consumption tax applies. Product-specific duty exemptions exist across the Customs Tariff schedule and vary by HS code.

Getting Your Import Costs Right Before You Ship

Canadian importers pay customs duties based on their product and its country of origin, plus GST and provincial sales tax depending on the nature and destination of the shipment. CARM is now the mandatory system for duty and tax payment, and registration is a legal requirement for all importers of record.

Two things reduce the risk of getting it wrong: knowing your rates in advance and working with a licensed customs broker who can confirm your classification and flag any FTA eligibility.

Use our Duty & Tax Calculator to estimate your costs before your next shipment. Or contact our customs brokers for a professional assessment of your import program.