Retailers applaud budget for defending import shipment rule

by MM&D Online Staff

TORONTO, Ontario—Retail Council of Canada (RCC) expressed its appreciation for the federal government’s decision to continue to treat imported shipments in the same way as goods sold in Canada.

“Despite a relentless pre-budget lobby from foreign sellers and the US air freight industry, the government understands the fundamental importance of tax fairness,” said Diane Brisebois, RCC’s president and CEO.

“Why any Canadian policymaker would want to confer a big tax advantage on foreign sellers at the expense of businesses that invest here and employ more than 2.2 million Canadians is a bit of a mystery to me,” Brisebois added.

Under de minimis rules, goods shipped into Canada by post and courier are exempt from all sales taxes and duties. Increases in the current de minimis threshold would mean that goods sold by Canadian merchants, whether in-store or online, would cost an average of 12.3 percent more after tax than those same goods shipped into Canada by courier or mail.

“Recent changes to the American de minimis level have attracted attention to the issue but it is like comparing apples and oranges, as the US does not have a federal sales tax and does not collect state taxes at the border”, said RCC vice-president, public affairs Karl Littler.

“Aside from the impact on Canadian retailers and their employees, a hike in de minimis levels would reduce tax revenues for federal and provincial governments and would be a huge disincentive to investment in Canadian based e-commerce, so it really would be a losing proposition,” Mr. Littler continued.

RCC will continue to work with federal and provincial policymakers to underscore the critical importance of tax fairness to the success of bricks-and-mortar and online retailers in Canada.

Retail is Canada’s largest employer with 2.2 million Canadians working in the industry. The sector annually generates payroll of $60 billion and $350 billion in sales (excluding vehicles and gasoline) as of 2014.