eBay

steveross · ‎06-12-2018

"De minimus threshold" (DMT) is postal service speak for the price cutoff below which they don't collect duty and taxes.

This article sums up the problem with Canada's $20 DMT: "it makes little sense to have taxes that cost more to collect than they generate in revenue, which is the case with a $20 DMT. It is particularly problematic to have DMT rules that Canada Post often chooses to ignore because they are too expensive to enforce."

https://www.macleans.ca/economy/economicanalysis/its-time-to-raise-the-duty-free-limit-for-online-sh...

It's because of their cost structure. For items under $80 or so, it costs them more in wages and overhead to collect the taxes than the revenues they take in.

https://www.ctvnews.ca/business/raising-20-threshold-for-duty-free-imports-could-benefit-ottawa-repo...

Here's an example: "By holding the DMT at $20 instead of $80, the study found that the government collects $39 million in additional revenues, but at a cost of $166 million."

So I can see Canada Post's conundrum. The regulations demand that they collect protectionist taxes, but they're already losing money, and collecting the taxes will make their losses even worse!

So they ignore the taxes in most cases, and the government takes a "don't ask, don't tell" approach, letting them ignore the rules, and eBay buyers are happy, except on the rare occasion when CP does collect taxes, and charges a $9.95 brokerage fee to try to recover at least some of its losses on the tax collection activities.

But I can see why Canada Post is maintaining this status quo. The fact that couriers have to collect taxes on all packages over $20 (they can't play fast & loose with the law) gives CP a clear advantage over the private delivery companies. (Hey . . . it works for me, I always chose sellers who deliver by the post office over ones using courier services, and out of the hundreds of packages under $100 I've had delivered over the years, Canada Post has only collected taxes once.)

Here are a couple more articles of interest:

http://www.cbc.ca/news/politics/online-shopping-cross-border-duties-taxes-de-minimus-1.3656603

http://www.cbc.ca/news/politics/online-shopping-cross-border-duties-taxes-1.3647965

femmefan1946 · ‎06-12-2018

Technically, it's Canada Border Services Agency which assesses the items for duty and sales tax.

Canada Post is just collecting them. Which is why their service fee ($9.95) is lower than the couriers ($25 and up) who also do the assessment as a sort of sub-contract with CBSA.

CBSA workers are well paid- and it is a challenging job requiring substantial knowledge and in some cases strong ability to work with people.

https://www.youtube.com/watch?v=WWpzwsg2f6M

Have you ever watched Border Security? It is surprising how polite the officers can be- particularly with elderly ladies with a suitcasefull of homemade sausages.

ypdc_dennis · ‎06-12-2018

I notice that all the articles you quote are from 2016.

...

Meanwhile, it's 2018 and the US of A has an aggressive anti-trade president.

maddkatt06 · ‎06-12-2018

that makes alot of sense. I haven't been taxed in a long time and I think the last I paid taxes on was like $8 - must not have been a brokerage fee in there.

marnotom! · ‎06-12-2018

@maddkatt06 wrote:

that makes alot of sense. I haven't been taxed in a long time and I think the last I paid taxes on was like $8 - must not have been a brokerage fee in there.

Once upon a time, Canada Post's fee for collecting and remitting taxes and duty on behalf of Canada Border Services was five dollars. So this may have been a long time ago.