BURST
All Valerie Burton wanted to do was send a trinket to someone in the U.S.
She got a bureaucratic headache instead.
When the Lantzville resident popped into the post office to send her package south from Vancouver Island, she was informed of Canada Post’s new rules: “All postal shipments to the U.S. will require prepaid duties before your package crosses the border — regardless of their value or country of origin.”
With the U.S. set to suspend the “de minimis” threshold — no duty on anything below US$800 — on Friday after an executive order was signed by Donald Trump, an exemption that dates back to 1930 will come to an end. All U.S.-bound packages must have proof that a 35 per cent duty has been paid or automatic billing enabled before the shipment can be accepted for delivery.
All payments must also be routed through the Zonos app , which is available for both Apple and Android platforms.
Burton is an admin on a Facebook page dedicated to the West Coast Trail. Those who complete the trail can purchase a badge or sticker, or buy one retroactively. She was shipping one to an American who’d walked the iconic route on the west coast of Vancouver Island.
“I was incensed by it,” said Burton. “Normally I would take a stand on something like this, but they had me over a barrel because I needed to get it in the mail. I had to send it. I was obligated. Is it worth it? No, no.”
She only found out about the exemption being lifted when getting to the post office, even though it was still a day before the official start date. Burton had to download the Zonos app — cursing the lack of Wi-Fi in the Lantzville post office — and learn to navigate it. The app works by either taking a photo of the contents, or entering it manually, and then it spits out the amount owed, plus handling charges.
It will provide the necessary Declaration Code, which says the duties have been prepaid, for the U.S. side, and QR code for the Canada Post to allow shipment.
Burton said she uploaded three different pictures of the same item, and got three different amounts, varying from US$1.75 US to eight cents. When Postmedia tested the app, it accurately identified two different items, their value, and calculated the duty. On a third attempt, entering a “fabric badge” manufactured in Canada with a value of $5, it assessed a duty of $1.75 CAD with another $4.17 in clearance and processing fees, for a total of $5.92 CAD — exceeding the value of the contents.
“Four different prices. And then, of course, the $2.99 (handling fee). I was infuriated,” she said. “The lady at the postal service said, ‘I can’t do this without that (Declaration Code) number.’ She said they blocked us out. They can’t do anything. Canada Post is responsible for programming their computers, and they needed it.
“When I got back from the post office and I was trying to figure out how this app worked, I phoned Canada Post. … I spoke to series of different people, because nobody knew what I was talking about. Nobody was familiar with it, because it’s new to them too,” Burton said.
“At Canada Post there was nobody there that could help me. Nobody knew how to do this. And the girls down at the Lantzville post office, it was a surprise to them too. They should have trained people. Give them a heads-up, give them a little YouTube video on how to help.”
The de minimis threshold in Canada was raised to $800 in 2016. The new executive order doesn’t just affect Canada, but any country that ships to the U.S.
While it gave Burton a headache, the pain is more severe for any Canadian businesses who depend on U.S. customers. Possibly even an existential one.
Any item manufactured in Canada is now subject to a duty rate of 35 per cent. So a package worth $60 would get approximately another $21 added on top.
The small businesses who relied on that to access the U.S. market will now see that option closed off. The Canadian Federation of Independent Business (CFIB) said their survey found that nearly a third of Canadian exporters use the de minimus exemption , and one in five businesses will go under within six months should the current trade war continue. Four in 10 said they wouldn’t last a year.
“Small businesses don’t have a lot of runway left. They are trying their best to absorb the costs, but if nothing changes, they will be forced to make some tough decisions,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB.
“The worst outcome for Canada in the trade war is a bad deal, but the second worst outcome is the never-ending uncertainty small business owners have been wrestling with for the past six months.”