How Canadian import duties, GST/HST, and other taxes work when importing goods from China — and how to estimate your landed cost before you order.
One of the biggest surprises for first-time Canadian importers is the total cost of bringing goods from China. The product price is just the starting point. By the time your shipment arrives in Canada, you'll also have paid freight, insurance, customs duties, GST, and possibly provincial tax on top.
This guide breaks down every cost component so you can calculate your true landed cost before placing an order.
What Are Canadian Customs Duties?
Customs duties are taxes collected by the Canada Border Services Agency (CBSA) on goods imported into Canada. The duty rate depends on:
- The type of product (determined by its HS code)
- The country of manufacture (country of origin)
- Whether any trade agreements apply
Most consumer goods imported from China attract a duty rate between 0% and 20%. Some categories like clothing and footwear can be higher. A small number of goods (like certain raw materials or industrial equipment) may be duty-free.
Goods and Services Tax (GST) on Imports
In addition to customs duties, Canada charges 5% GST on most imported goods. GST is calculated on the duty-paid value, meaning it's applied after duties are added to the product value.
Example: If your goods are worth CAD $10,000 and attract a 12% duty, the duty is $1,200. GST is then calculated on $11,200 (goods + duty) = $560. Total: $11,760.
Provincial Sales Tax (PST) and HST
Depending on which province your goods are delivered to, you may also pay:
- Harmonized Sales Tax (HST): in Ontario, Nova Scotia, New Brunswick, Newfoundland, and PEI
- Provincial Sales Tax (PST): in British Columbia, Saskatchewan, and Manitoba (applied separately from GST)
- No provincial sales tax: Alberta, Northwest Territories, Nunavut, and Yukon
For most Canadian importers receiving goods in BC (Vancouver) or Ontario (Toronto), plan for GST + HST/PST on top of your duties.
How the CBSA Calculates the Value of Your Goods
The CBSA uses the transaction value method as its primary valuation approach. This is the price you paid or agreed to pay for the goods when purchased for export to Canada.
Important: you must declare the actual price paid. Undervaluing goods is a serious offence and can result in penalties, seizure of goods, and CBSA audits for up to four years after importation.
Antidumping and Countervailing Duties
For certain product categories where China has been found to be exporting at unfairly low prices, Canada may impose antidumping duties (ADD) or countervailing duties (CVD) on top of standard duty rates.
These can significantly increase your total import cost. Always ask your customs broker to check for ADD/CVD before you order a new product category.
How to Calculate Your Landed Cost
A landed cost estimate includes:
1. Product cost (in CAD)
2. International freight and insurance
3. Customs duties (based on HS code rate x product value)
4. GST (5% x (product value + duties))
5. Customs broker fees
6. Port and terminal handling fees
7. Domestic delivery to your warehouse
Epic Sourcing can prepare a full landed cost estimate for your products before you place your order, so there are no surprises when your goods arrive in Canada.
How to Reduce Your Import Duty Bill
Legitimate ways to minimise duties include:
- Correct HS code classification: make sure you're not paying a higher rate than required
- Tariff relief programs: certain goods may qualify for duty relief or drawback under Canadian programs
- Free Trade Agreements: Canada has FTAs with the EU, UK, and other countries that may apply to goods with mixed origin components
Note: Misclassifying goods to lower duties is illegal. Always work with a licensed customs broker to ensure compliance.
Ready to Import Smarter?
Understanding your import costs upfront is one of the most important steps to protecting your margins as a Canadian importer. Book a free call with Epic Sourcing today and we'll walk you through a landed cost estimate for your specific products, so you know exactly what to expect.
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