As of Friday, Canadian small businesses can no longer ship low-value packages to the United States without paying duties — a shift many fear could determine whether they survive.
The change ends the de minimis exemption, a nearly century-old policy that let goods under $800 USD cross the border duty-free. Under U.S. President Donald Trump’s July executive order, Canadian sellers now face duties of up to $200 USD per package, depending on origin.
For Vancouver entrepreneur Jess Sternberg, owner of Free Label clothing, the risk is too great. U.S. customers make up nearly half her sales, but she has halted shipping across the border. “We can’t justify it,” she said, warning her business may not survive without access to its fastest-growing market.
Other companies are trying to absorb the blow. Cheekbone Beauty, an Indigenous-owned cosmetics brand in St. Catharines, Ont., says it will cover the added 25 to 30 per cent in shipping fees — at least for now. “We don’t want to scare U.S. customers away,” said founder Jenn Harper.
Trade experts warn the exemption’s elimination will hit small “mom-and-pop” sellers hardest, saddling them with customs paperwork and costs many never had to navigate before. While larger retailers may adapt, smaller firms could shutter.
“It allowed a lot of small businesses to scale up quickly into the U.S.,” said Bob Kirke of the Canadian Apparel Federation. “But it’s gone, and that will cap growth and innovation.”
Some carriers, including FedEx and Canada Post, are adjusting to collect and remit duties. Others, like Chit Chats, have stopped handling U.S. packages altogether.
For now, Canadian entrepreneurs face tough choices: scale back, absorb losses, or risk losing American customers altogether.