In a forceful address at Retail West in Vancouver, Aritzia founder and executive chair Brian Hill has called on the Government of Canada to eliminate the de minimis duty-exemption on low-value e-commerce imports. Brian Hill said his company is at a 20 per cent duty disadvantage on e-commerce orders to Canadians valued at $150 or less. Hill warned that current federal policy is placing Canadian retailers at a pronounced duty disadvantage and voiced concern over cross-border trade imbalances that have become more glaring since the United States ended its own de minimis policy this August.
- What is the De Minimis Exemption?
- “We Should Be at Zero”—Calls for Policy Reversal
- A 20 Percent Duty Disadvantage
- Industry Response: “It Is Unfair to Canadian Retailers”
- De Minimis: Longstanding Trade Flashpoint
- Who Would Bear the Burden?
- A $150 Loophole for Global E-Commerce Giants
- What’s Next? A Race for Policy Alignment
What is the De Minimis Exemption?
Under Canada’s system, imports shipped to consumers from the U.S. or Mexico with a declared value of $150 or less are not subject to Canadian duties, while goods with a value of $40 or less are free of taxes, according to trade law expert Daniel Kiselbach of Miller Thomson. In contrast, after an executive order signed by the U.S. President, the United States no longer provides duty-exemption for any commercial shipments from Canada or Mexico and now requires full compliance—including duties and taxes—even for the lowest-value parcels.
“We Should Be at Zero”—Calls for Policy Reversal
“If the U.S. is at zero, we should be at zero,” Hill insisted to the crowd, criticizing the policy that lets foreign e-commerce shipments into Canada without paying comparable tariffs faced by homegrown companies. With a measured but pointed tone, he asked, “Why is it advantageous for foreign retail, foreign product companies, foreign retailers, or whatever, to be able to ship into Canada duty-free, and we are having to pay duty on it?“
Hill said that Aritzia previously shipped 70 percent of its online U.S. orders directly from distribution centres in Toronto and Vancouver. That portion of their U.S. e-commerce—worth millions—has now gone to zero almost overnight following U.S. policy change, as it is no longer price-competitive for Canadian retailers to ship across the border without the exemption.
A 20 Percent Duty Disadvantage
Hill estimates his company is now at a 20 percent duty disadvantage compared to foreign e-commerce rivals: “Why is Shein, and all these people, still shipping into Canada and not paying duty?” His frustration was palpable as he pointed out, “We’re creating jobs here. Some of the international players create retail jobs, but we have got 1,500 people in our offices, another 1,500 in our distribution centres, 500 in call centres—all in Canada.”
Industry Response: “It Is Unfair to Canadian Retailers”
The issue attracted wide support at the conference. Champlain Apparel Inc. CEO Cameron Conn called Hill correct and echoed his belief that the absence of U.S. de minimis exemptions has effectively gutted their U.S.-bound e-commerce. “I’m waiting to get those bills back to really understand how much that’s undercutting the margin, and if I can continue to financially do that. If not, we will have to shut down our U.S. traffic and really focus on the Canadian market,” Conn added.
De Minimis: Longstanding Trade Flashpoint
Elimination of the exemption for U.S. shipments follows years of negotiation. During recent free trade talks on the Canada-U.S.-Mexico Agreement (CUSMA), the U.S. lobbied for Canada to match its (then) $800 threshold, but Canada negotiated for lower limits. Hill praised the Retail Council of Canada for advocating to keep Canada’s rates low, but now insists, “Time has come, however, to end that policy because the U.S. has eliminated the duty exemption.”
Who Would Bear the Burden?
Legal advisors—including Daniel Kiselbach—note that removing the de minimis exemption would transfer much administrative and financial responsibility for compliance onto courier companies. “They’re already doing that work. Now, when I get something from UPS, I might have to pay taxes that are owing on something before I get it,” Kiselbach explained. This could add complexity and potential fees for shippers and consumers.
A $150 Loophole for Global E-Commerce Giants
Canadian retailers argue the current structure unfairly advantages low-cost, high-volume exporters like Shein and other global e-commerce giants, who can still ship up to $150 per order into Canada duty-free. As the U.S. crackdown tightens in both directions of North American cross-border e-commerce, industry leaders warn that trade and job creation could further tip in favor of international platforms if Canada does not follow suit.
What’s Next? A Race for Policy Alignment
Analysts expect intensified government and industry lobbying heading into late 2025, as cross-border commerce adapts to new rules. Many experts anticipate that Canada may move quickly to match the new U.S. stance to ensure fair competition among retailers, reduce revenue leakage, and protect Canadian jobs.
