The Confusion about Tariffs
People who have never imported goods themselves for either personal use or for retail sale may be confused as to who pays tariffs but it is my experience that it is the recipient of an imported good that eventually pays freight, duties, tariffs and taxes.
I have personally imported books, compact discs, DVDs and blu-rays from abroad and none of the businesses have paid tariffs on my behalf unless that had done so previously to import these goods into their country, to then sell it to someone else.
No eBay or Amazon seller that I have purchased goods from has ever paid customs brokers for products made in their own country and this is how I had managed to save money for decades, as I’ve mentioned in a March 2010 page on this blog.
Instead of placing special orders at my local CD stores, which resulted in a considerable mark-up and delay in receiving the CD, I had taken advantage of a postal importation exemption that allowed me to import shipments valued at less than CA$20, duty and tax free.
No costly customs brokerage fees. Nothing. And it was advantageous on light shipments like that of a CD single, DVD or blu-ray, whose shipping and handling costs were low because they were light. And shipments from England were relatively inexpensive and fast as well.
But I digress…
Like duties and taxes, tariffs are only calculated and billed at the border, by custom brokerages working for the courier. And in my case it was Canada Post because I avoided the major couriers because of their higher brokerage fees. And to facilitate shipments, some companies like Amazon do have their own customs brokers, calculating and including an estimate on shipments to Canada.
Amazon Canada also provides estimates on goods that might be imported, so it is always the customer that ends up with the final bill, not the manufacturer of the product ordered.
After all, they’re the people buying the product and they’re willing to pay to import it mainly because it isn’t made or still available in their country.
Tariffs are based on demand and the British, French, Scandinavian and Australian compact discs, compact disc singles, DVDs and blu-rays that I purchased were not manufactured and distributed in Canada so I paid to import them. And had I purchased them via a retailer, they would have paid a distributor a markup to cover their payment of these fees, which would have been recouped from me by the retailer when I purchased the product there.
The same scheme applies to most products, including American dairy imports. But the Canadian dairy companies importing it to make products have yet to reach the threshold that would result in tariffs, the “tariff rate quota”, so they haven’t paid any tariffs on American dairy for decades, nor have their Canadian consumers until the retaliatory tariffs kicked in April 2025.
This 25% tariff has not been added to books, musical instruments, compact discs, DVDs or blu-rays made in the United States and hopefully that wont happen in the future. But I’ll keep an eye on the situation and update this blog accordingly if something happens.
I hope this helps people that were confused about the situation. And remember, shop around!
- What is a tariff? An Economist Explains
- How Tariffs Work – Export Development Canada
- The Smoot-Hawley Tarriff – United States Senate
Pain In The Tariff!
So, I was eying “Dexter’s Laboratory – The Complete Collection” at several retailers and had never considered that the tariffs would have a secondary effect on goods that are not tariffed so I didn’t expect sticker shock a few days back – The price of this DVD collection just skyrocketed, by $30 at some of these retailers.
Like CDs and vinyl, DVDs and Blu-rays are not currently included in the list of goods that are being subjected to tariffs. But I suspect their prices will go up in the states, well above the $20 postal importation exemption, which is rather annoying. And I presume any shipment from the states would be delayed going through customs because they’ll have more forms to fill out, unless Canadians just stop importing from the states via mail.
I did just order the collection from a Canadian seller on eBay for the amount I had encountered before the hike, preferring to avoid the American and Chinese sellers. And if need be I could always try the U.k and Europe for other releases as well.
I personally like Amazon u.k, Amazon France and FNAC for CDs and Region Free DVDs from Europe, and I do have a region free DVD player for some French films that never made their way to DVD in North America. But sometimes deals can be had for under $20 Canadian, not including shipping, and sometimes the shipping rates are acceptable.
I have emailed my local MP and several electoral candidates suggesting a $60 exemption for postal importations from Europe, the U.k and several more of our stable trade partners so I’m hoping we’ll be able to order more from those countries after the election is done.
If you want to support a $60 exemption for postal imports, which is long overdue, you can contact your local Member of Parliament via this form, after the election of course.
Hopefully we’ll be done with this tariff nonsense soon…
Canada Post – A Search For Relevance
Now that the strike is over letters and parcels are now being sorted; And everyone involved has clearly stated delays are to be expected, especially for rural communities.
Unfortunately, I don’t see how they could possibly get through it all without delivering letters and parcels this weekend, or at least make some of it available for pick-up at the commercial post offices. But the delivery of parcels to homes on the weekend would not likely be a long term solution.
I suspect the preferable response would be like that of the locker system like found at the larger Canadian Tire stores, where one can use a bar code to unlock a locker containing their parcel(s) at their local Post Office. And I guess some of the empty post office boxes could be adapted to provide that service for smaller parcels.
At the moment I can only pick up parcels at my local post office if I rent a post office box or use FlexDelivery, a service also offered by Amazon Canada and Walmart Canada that diverts parcels to my local post office. But I believe most parcels may not be delivered to the commercial post offices on weekends, and rural post offices are usually also closed on Saturdays and Sundays.
The new community hubs also offer limited services on weekends, which is a shame because parcels could also be delivered to those on Saturdays. But the looming deficits are hindering investment in new infrastructure, which may be necessary for the corporation’s survival.
Small businesses in Canada suffer because they lack access to affordable shipping, including most Canadian sellers on eBay, and there can only be so many conventions and pop up shops through-out the year to help them sell their merchandise, so we’re talking about a major crisis.
Last mile postal deliveries are also an issue for postal imports and everyone that has ever imported something using a courier service knows how expensive their brokerage fees can get ; I’ve actually paid fees surpassing the value of the product imported and the $20 postal import exemption is of little value now because of inflation.
I’m surprised the new trade free trade agreement in-between Canada, the United States and Mexico didn’t include a higher exemption rate, which should have been $60 (like the current rate on gift shipments). But that’s a subject for another post…
The ship has sailed when it comes to personal and commercial letter mail, so Canada Post needs to expand to remain relevant. And that can’t be done without major investment from the government.
Satellite internet should be a priority for the more remote rural offices, with long range wi-fi retransmission, as should the expansion of the community hubs. And that wont be cheap…
Cineplex Decision
Cineplex was fined $39 million for deceptive marketing practices by the Competition Tribunal on the 23rd of this month but have stated that they would appeal it according to a press release issued that same day, so consumers will probably continue paying the $1.50 online convenience fees until further notice.
Personally, I’ve decided to simply go with discounted tickets and gift cards from Costco to counteract the fee. But I of course have a local Landmark Theatre so I’m in a better position than some. And theatres are closing.
Cine Starz is down to five theatres and Cineplex recently closed their theatre in Brockville, the community’s only movie theatre, so the industry is in serious trouble, especially the independent theatres according to a recent study.
The recent addition of foreign films to the major theatre chains could help but most European films appear to still be limited to the smaller indie theatres, which are usually downtown, so more could be done to get people into seats. But I don’t think nickel and dime schemes will be tolerated by most consumers.
Home premiere releases have already resulted in a significant drop in attendance and consequently concession sale losses yet they thought this fee would somehow not be perceived as negative by consumers?
I don’t get it. And like many consumers I’m getting quite picky when it comes to films because of trope fatigue so they’ll need to somehow counteract these fees, if not drop them entirely for members of their loyalty programs, at least.
eBay Purchases Subject to Taxes
Canadian eBay buyers should note that their Canadian purchases and purchases of digital downloads will be subject to taxes as of July 1st, 2022.
Purchases from Canadian retailers on eBay were already subject to the HST or GST and provincial sales taxes but taxes will be now extended to any purchase shipped from a Canadian address and digital product sales.
Unfortunately, First Nations buyers and businesses that have resale and/or provincial exemptions will be required to submit requests to the Canadian Revenue Service and/or provincial tax office for rebates and/or refunds.
Imports will be subject to the usual taxes, custom fees and exemptions.
Ontario Theatres Closed
Cineplex has issued a notice that the their theatres will be closed as of January 5th, 2201 in response to the new provincial guidelines on COVID. And it appears that the other chains in the province will do so shortly.
Refunds will be issued so keep an eye on your email if you have purchased tickets.