Border Shipping Fees Spark Complaints

(Dana Flavelle — Toronto Star)

Sam Patterson thought he got a good deal when he ordered an MP3 player on the Internet for $160 (U.S.). But when the parcel arrived on his doorstep, the courier company said he owed another $80 (Canadian) in duties, taxes and customs brokerage fees.

“That’s half of what I paid for this thing. That’s ridiculous,” the 50-year-old Toronto film production employee says.

He refused to pay the charges and told the courier company to send the item back to the United States.

Like Patterson, more Canadians are cross-border shopping online now that the Canadian dollar is at par with the U.S. greenback, and a weak U.S. economy is driving retailers to offer big bargains south of the border.

But while some Canadian online shoppers say they’ve scored amazing deals, others say the experience left them cold.

Most of the complaints revolve around unexpected shipping charges for duties, taxes and customs brokerage fees, or wait times for delivery, a growing issue as Christmas Day approaches.

Duties can range from zero to more than 18 per cent, depending on the product and where it’s made, according to the Canada Border Services Agency, the federal agency responsible for assessing duties.

There’s no easy way for the average consumer to figure it out in advance, says Patterson, and few online retailers provide the information for you. “Most websites don’t say on the order page that there could be additional charges.”

The list of import duties listed on Industry Canada’s website is hundreds of pages long. The section governing just shoes, a popular online purchase, and other footwear is 15 pages long.

The federal goods and services tax, at 6 per cent, and provincial sales tax, in Ontario 8 per cent, and any excise tax is added on top of whatever duty is charged.

Then there’s the problem of clearing customs.

Do you pay a private courier service, like UPS Canada, a customs brokerage fee, which can run between $20 and $70, to expedite it for your? Or do you ship through the postal service, which charges a flat $5 fee, but may take longer to deliver? Or do you avoid the fees altogether by making a trip to the customs office in Mississauga?

Two of the biggest complaints about cross-border shipping involve unexpected costs and delivery delays, a growing concern with Christmas deadlines looming.

So many consumers have complained about UPS Canada’s brokerage fees that they have sparked several class-action lawsuits.

In a statement of claim filed by Siskinds LLP in the Ontario Superior Court of Justice last February, the plaintiffs say they weren’t warned in advance there would be extra fees and that the fees charged are excessive.

UPS Canada says it is defending itself against the claim. Its brokerage fees cover the cost of expediting the parcels through Canada Customs, the courier service explains.

“Importing goods into Canada requires the payment of duties and taxes. These fees include PST, GST, duties and other taxes on goods (e.g. excise tax),” UPS Canada said in an email. “UPS Customs Brokerage rates and provides payment to Canada Customs for these fees to expedite clearance at the border on behalf of its importers,” UPS says. “UPS provides a charge for this service.”

The rates for those services are based on the value of the parcels and are outlined on its website, the company also says. They range from a low of zero for parcels worth less than $20 to a high of $69 for items worth more than $1,600.

The Canada Border Services Agency, which is responsible for enforcing the Customs Act, says customs brokerage fees are unregulated and have nothing to do with how the government levies it charges.

Agency spokesperson Patrizia Giolti agrees the fees private courier services charge can vary widely.

“It’s best to shop around.” On the other hand, shipping through the postal system can mean longer waits, she says.

The Consumers Association of Canada says it continues to receive complaints from customers who say their parcels are taking four to six weeks to be delivered.

The problem began as the Canadian dollar reached par with its U.S. counterpart, the association says.

Canada Post spokesperson François Legault says it has worked closely with the border services agency to process additional volumes. Asked about Christmas delivery deadlines, he recommends ordering as soon as possible.