Selling To Canada from US requires a clear plan for taxes, compliance checks, and cross-border logistics, ensuring brands avoid delays and protect their margins.
When brands consider “Is Amazon Canada worth it in 2026,” the answer often starts with market potential and Canada’s e-commerce numbers are hard to ignore.
The challenge comes from shifting duties and taxes, which demand a well-built strategic plan before expansion begins.
Canada’s "Last Sale" Rule Redefines Import Valuation for 2026
Canada E-commerce Market Analysis by Mordor Intelligence"Canada's e-commerce sector is currently worth USD 41.79 billion and is projected to grow to USD 66.89 billion by 2030."
The Canada Border Services Agency is finalizing amendments that will fundamentally change how customs valuation works starting in early 2026. Thomas Taggart, VP of Global Trade at Passport, wrote in his Global Trade Mag article, this shift moves Canada from a “first sale” interpretation to a strict “last sale” rule that specifically targets multi-tiered supply chains.
This reform ensures that imported goods are valued based on the final transaction that causes the export to Canada rather than earlier transfer prices. Consequently, the strategy of selling to Canada from US using intercompany sales to artificially lower declared values will no longer be effective.
For cross-border merchants, the implications of this rule are far-reaching and directly impact Non-Resident Importers who rely on “paper subsidiaries.” As brands search for the cheapest shipping to Canada from US, they must realize that minimizing duties through nominal Canadian entities is now a significant compliance risk.
The CBSA has clarified that these paper subsidiaries do not qualify as purchasers in Canada because they lack a fixed place of business or operational control. Without genuine local presence or employees, any intercompany sale will be disregarded, and the agency will treat the final retail price to the consumer as the value for duty.
However, the Non-Resident Importer model remains a viable option for bringing in unsold or speculative inventory where the cost of goods can still serve as the value for duty. The distinction is that once a specific retail sale triggers the export, the declared value must reflect that higher retail transaction price rather than the manufacturing cost.
Looking ahead at Shipping to Canada from US 2026, sellers must prepare for tighter scrutiny on related-party pricing structures and shared liability for duties.
Key principles for navigating these changes include:
- Substance Over Form – Paper subsidiaries without a real physical presence will not qualify as legitimate purchasers.
- Retail Sales Drive Valuation – When a consumer purchase triggers the export, that retail price determines the customs value.
- NRI Viability – The NRI model works for unsold inventory but requires strict adherence to valuation rules for sold goods.
- Transparency is Mandatory – Expect greater scrutiny from the CBSA regarding whether declared values align with final transactions.
The bottom line is that any strategy relying on creative valuation schemes now poses a serious threat to long-term operations. Under this new framework, the last transaction in the chain is the only one that counts for customs purposes.
Navigating the Triple Threats from Tariffs, CARM, and Logistics Strikes
In another Global Trade Mag article, Thomas Taggart wrote that the Canadian market is facing a pivotal moment in Q4 2025 that demands immediate attention from U.S. brands. Three concurrent developments: tariff shifts, customs modernization, and labor strikes are fundamentally reshaping the strategy for selling to Canada from US.
The removal of the 25% retaliatory surtax on select U.S. goods effective September 1, 2025, offers a rare opportunity for margin recovery. This policy shift lowers the barrier regarding selling to Canada duties and taxes, allowing merchants in categories like cosmetics and homeware to regain price competitiveness.
However, this relief comes alongside the strict enforcement of the CBSA Assessment and Revenue Management (CARM) system. The new Non-Resident Importer (NRI) Canada rules mandate that all commercial importers must now handle their own portal registration and bonding, as the grace period for broker-assisted payments ended on October 21, 2025.
This change forces brands to take full responsibility for their compliance infrastructure or revert to a consumer-as-importer model. Canada customs clearance for online sellers has shifted from a broker-managed process to a direct liability for the merchant, where failing to register can result in immediate border holds.
Simultaneously, a nationwide Canada Post strike has paralyzed last-mile delivery since late September, leaving standard postal shipments in limbo. Sellers who have not aligned with strict Amazon Canada FBA requirements or diversified into multi-carrier networks are seeing weeks of customer orders staged indefinitely.
The volatility underscores the need for Delivered Duty Paid (DDP) models that can reroute around postal service disruptions. Collecting the proper Canadian GST/HST for ecommerce and ensuring reliable delivery is now a competitive necessity rather than just an operational detail.
Brands must treat this period as a test of their operational readiness before further valuation changes take effect. With the Last sale rule Canada looming on the horizon for 2026, establishing a resilient, audit-proof supply chain today is the only path to long-term growth.
Key Market Shifts to Watch:
- Tariff Rollback – The 25% surtax on U.S. goods was eliminated on September 1, 2025.
- CARM Mandate – Direct importer liability for duties and taxes became mandatory on October 21, 2025.
- Logistics Freeze – The Canada Post strike demands a move away from DDU postal shipping toward private carrier networks.
Canada-US Trade Shifts Add New Layers to Cross-Border Planning
The commercial relationship between the United States and Canada is deeply entrenched, dating back to the 1794 Jay Treaty and solidified by decades of free trade. However, the upcoming 2026 renewal of the USMCA agreement threatens to upend this stability with potential renegotiations on digital trade, labor, and autos.
While headlines often focus on baseline 35% tariffs enacted through the International Emergency Economic Powers Act, the actual burden on compliant businesses is significantly lighter. Thanks to USMCA exemptions, the average effective tariff rate on Canadian goods remains approximately 5%, the lowest of any U.S. trading partner.
Businesses are increasingly filing country-of-origin paperwork to lock in these lower rates, with compliance rising markedly across the energy and manufacturing sectors. Properly managing Selling to Canada duties and taxes is now a critical operational requirement to avoid the much higher non-compliant rates applied to other nations.
According to the Beutel Goodman Fixed Income Team, the mandatory six-year review of the USMCA begins in July 2026 and could unfold in several ways. Analysts predict a period of aggressive negotiation where the U.S. administration may leverage withdrawal clauses to demand concessions on dairy and government procurement.
A contentious renegotiation could destabilize integrated supply chains and push effective tariff rates closer to 7-8% in the first half of 2026. Companies currently selling to Canada from US must prepare for this volatility by auditing their supply chains for strict adherence to rules of origin.
Despite Logistics Hurdles, Canada Remains a Critical Growth Engine for US Brands
Armando Roggio reported for Practical Ecommerce that while cross-border trade faces significant headwinds in 2025, Canada remains the most logical first step for US merchants expanding internationally. With total Canadian ecommerce sales projected to reach up to $43 billion USD in 2025, American stores are positioned to capture approximately $8 billion of that market despite the current logistical puzzle.
However, realizing this revenue requires navigating a volatile trade environment where reciprocal tariffs and surtaxes can climb as high as 25%. Historical data shows that shipment volumes drop quickly when these costs rise, as Canadian consumers often abandon brands that pass on unexpected fees.
To maintain conversion rates, sellers must ensure their pricing models are transparent and inclusive of all import fees. Utilizing a precise landed cost calculator for Canada is essential to identify the true margin by accounting for product costs, shipping, duties, and the compounding Goods and Services Tax.
Merchants should also integrate these figures into an Amazon Canada profit calculator to determine if their unit economics can withstand the additional Provincial Sales Tax or Harmonized Sales Tax applied at the destination. Canadian shoppers frequently reject packages when hit with surprise “cash on delivery” duty charges, making a Delivered Duty Paid strategy vital for customer retention.
Beyond financial planning, the physical movement of goods is under threat from recurring labor disputes involving the Canadian Union of Postal Workers. Selling to Canada from US now requires a contingency plan that avoids Canada Post entirely, as platforms like Walmart Marketplace effectively ban its use during strikes to protect service standards.
Independent logistics strategies often require merchants to act as the importer of record, which necessitates budgeting for the Customs surety bond cost Canada mandates for clearance. Establishing this infrastructure ensures that shipments are not stranded during peak holiday seasons when postal networks freeze.
Compliance extends to the products themselves, as Canada strictly forbids the import of certain goods that are legally sold in the domestic US market. Many sellers leverage Amazon FBA Canada bilingual labeling services to ensure their packaging meets local language and regulatory requirements before inventory ever reaches the border.
Ultimately, the complexity of managing carrier contingencies and duty-paid pricing models leads many brands to seek professional support. Partnering with Amazon agency for Canada expansion services can help businesses audit their supply chain and secure a slice of the lucrative northern market without falling victim to compliance pitfalls.
Key Factors for Canadian Expansion Success:
- Cost Competitiveness – Model total landed costs including GST, HST, and duties before launching.
- Duty-Paid Pricing – Pre-pay duties to remove friction and prevent customer rejection at the door.
- Carrier Redundancy – Avoid reliance on Canada Post during strike seasons by diversifying shipping partners.
- Product Compliance – Verify that all inventory meets Canadian import restrictions and labeling standards.
Made in CA"More than half of Canadian Amazon sellers generate annual earnings exceeding $50,000."
