Unfair Rates

Canadian mailorder companies pay more to mail their products to Canadians than some of our international competitors do. Even from halfway around the world, our competitors can mail the same products to the same Canadian customers for less -- often for a lot less. Here are actual examples that show just how bad it is for Canadian companies.

Note: For these examples the postage fees paid by the package shippers are compared to what Canadian mailorder companies would pay to ship the same packages. The rates used are discounted rates typically offered to medium sized mailorder businesses.

Front of package (click on image for a closer view)
Air Mail Package Weighing 116g from California

This padded plastic package weighed 116 grams. It contained an Xbox game and was addressed to an Ontario address. In Canada, it was treated as an Xpresspost parcel with tracking. The cost of mailing was $2.00 U.S., or about $2.20 Canadian. It would have cost a Canadian company $4.52 to mail this same package to the same address by Canada Post's Lettermail service. If it were shipped by the same Xpresspost service in Canada it would have cost a Canadian shipper between $7.70 and $10.54.

Not only was the postage less, HST was not collected from the consignee. Canada Post is required to collect HST when levied by Canada Customs but Canada Customs does not levy HST on incoming packages worth $20 or less. This is an exemption granted under the provisions of the Postal Imports Remission Order. So, not only did the American company have a shipping advantage, it had a tax advantage too.

ADVANTAGE USA!

The Package Details
Dimensions:24 mm wide x 18.5 mm high x 7 mm thick
Weight:116 grams
Origin:California, U.S.
Destination:Goodwood, Ontario, Canada
Carriers:United States Postal Service, Canada Post
Mail class:International Surface Air Lift
Postage paid:USD 2.00 (= CAD 2.20)
Postage if mailed in Canada to the same customer:CAD 4.52 (via Lettermail Non-standard)
Postage if mailed in Canada to international customers:CAD 8.03 (via Lettermail Non-standard)
Mailing date:Before 2014-08-10
Arrival date:2014-08-13
Time in transit:3+ business days
Declared value:USD 4.49
Declared contents:Digital media
HST not collected:CAD 0.59

Front of package (click on image for a closer view)
First Class Mail Package Weighing 255g from New York

This padded plastic package weighed 255 grams. It contained a mobile phone accessory and was addressed to an Ontario address. The cost of First Class postage was $8.24 U.S., or about $9.20 Canadian. It was treated as an Xpresspost parcel in Canada. It would have cost a Canadian company between $7.70 and $10.54 to mail this package to the same address using the same Xpresspost service.

HST was not collected from the consignee even though Canada Post was required to collect HST. The shipping and the tax saving gives the advantage to the American company over a Canadian company shipping the same item to the same address.

ADVANTAGE USA!

The Package Details
Dimensions:24 mm wide x 17 mm high x 3 mm thick
Weight:255 grams
Origin:New York, U.S.
Destination:Goodwood, Ontario, Canada
Carriers:United States Postal Service, Canada Post
Mail class:First Class Mail International
Postage paid:USD 8.24 (= CAD 9.20)
Postage if mailed in Canada to the same customer:CAD 7.70 to 10.54 (via Xpresspost)
Postage if mailed in Canada to international customers:CAD 10.66 (via Small Packet USA Air) or CAD 19.62 to 22.81 (via Small Packet International Air)
Mailing date:2014-07-03
Arrival date:2014-07-10
Time in transit:5 business days
Declared value:USD 23.00
Declared contents:Phone accessory
HST not collected:CAD 2.99

Front of package (click on image for a closer view)
Back of package, showing customs sticker with a declared value of USD 10.00 (click on image for a closer view)
Air Mail Package Weighing 25g from Hong Kong

This unpadded plastic package weighed 25 grams. It contained a small cable for an Apple iPod and was addressed to an Ontario address. The cost of mailing was 2.90 Hong Kong dollars, or about 38 cents Canadian. It would have cost a Canadian company $1.29 to mail this same package to the same address by Canada Post's Lettermail service.

Not only was the postage fee less, HST was not collected from the consignee. Canada Post is required to collect HST on incoming international mail packages, but only if Canada Customs assesses the HST, and Canada Customs does not levy HST on incoming packages worth $20 or less. This is an exemption granted under the provisions of the Postal Imports Remission Order. So, not only did the Hong Kong company have a shipping advantage, it had a tax advantage too.

The one apparent advantage a Canadian company would have had in this case is a shorter delivery time. A lettermail package of this size mailed in Canada would have been delivered in 1-2 business days to most major cities while the package from Hong Kong took 10 business days. To the consignee, however, lower cost was more important than the longer delivery time, and he was content to wait.

ADVANTAGE HONG KONG!

The Package Details
Dimensions:20 cm wide x 13.5 cm high x 1.2 cm thick
Weight:25 grams
Origin:Hong Kong
Destination:Goodwood, Ontario, Canada
Carriers:Hongkong Post, Canada Post
Mail class:International Bulk Air Mail
Postage paid:HKD 2.90 (= CAD 0.38)
Postage if mailed in Canada to the same customer:CAD 1.29 (via Lettermail Non-standard)
Postage if mailed in Canada to international customers:CAD 2.10-4.20 (via Lettermail Non-standard)
Mailing date:2012-05-11
Arrival date:2012-05-28
Time in transit:10 business days
Declared value:USD 10.00
Declared contents:Electronics
HST not collected:CAD 1.30

Front of package (click on image for a closer view)
Back of package, showing customs sticker with a declared value of USD 10.00 (click on image for a closer view)
Air Mail Package Weighing 27g from Hong Kong

This is a second package from Hong Kong received from the same vendor on the same day as the previous package. It is an unpadded plastic envelope weighing 27 grams. This and the previous package were mailed using Hongkong Post's International Bulk Air Mail service. This service lets companies in Hong Kong combine many packages in one large bag that can hold up to 30 kg of packages. These bags are flown to designated airports throughout the world where they clear customs and then packages inside are inducted into the local mail stream. Hongkong Post claims it can get these bags to the designated airport in 1-3 days. From there it is up to the local post office to deliver packages to the individual consignees. The service is incredibly cheap and effective.

The Hongkong Post service puts Canadian companies at a huge disadvantage in competing for customers in Canada because Hong Kong companies can ship products to Canadians far cheaper than Canadian companies can. And because no HST is charged when packages valued less than $20 arrive in Canada there is a big tax disadvantage as well.

Canada Post stipulates that all lettermail packages must be no thicker than 2 cm. Packages thicker than this must be sent at the much more expensive parcel rates. The package is 2.5 cm thick and a Canadian company mailing it in Canada would be forced to send it by parcel post. The cheapest parcel post service offered by Canada Post is the Expedited Parcel ground service and it would cost between $5.24 and $16.84 depending on the shipper's location. A fuel surcharge is added on top of this at the rate of 8.25%, bringing the total cost of mailing this package to a Canadian customer to between $5.24 and $18.20.

Canada Post does not offer a service comparable to Hongkong Post's Bulk International Air Mail, and that puts Canadian companies at a huge disadvantage in competing for the world's customers. Canadian companies would have to ship this package by Canada Post's Small Packet Air service at a cost ranging from $7.10 to $10.34 depending on destination.

ADVANTAGE HONG KONG!

The Package Details
Dimensions:20 cm wide x 13.5 cm high x 2.5 cm thick
Weight:27 grams
Origin:Hong Kong
Destination:Goodwood, Ontario, Canada
Carriers:Hongkong Post, Canada Post
Mail class:International Bulk Air Mail
Postage paid:HKD 2.90 (= CAD 0.38)
Postage if mailed in Canada to the same customer:CAD 5.24 to 18.20 (via Expedited Parcel)
Postage if mailed in Canada to international customers:CAD 7.10 to 10.34 (via Small Packet Air)
Mailing date:2012-05-11
Arrival date:2012-05-28
Time in transit:10 business days
Declared value:USD 10.00
Declared contents:Electronics
HST not collected:CAD 1.30

Registered small packet air package (click on image for a closer view)
Top panel showing registered mail tracking number (click on image for a closer view)
Corner of package, showing mail class (click on image for a closer view)
Side of package, showing customs sticker with a declared value of USD 8.00 and a weight of 224 grams (click on image for a closer view)
Registered Small Packet Air Package Weighing 224g from China

This box came from China containing a hat. It weighed 224 grams. It was mailed using China Post's Small Packet Air service and it was registered. Small packet services are not trackable and delivery cannot be confirmed. But adding registration effectively turns China Post's small packet service into a very inexpensive trackable, proof of delivery service. Having proof of delivery is critical for shippers when customers initiate credit card charge-backs for any reason. Incredibly, the combined registered small packet air service costs only 28.66 Chinese yuan, which is about $4.59.

In Canada this package can only go as a parcel as it is too bulky for the lettermail service. The cheapest parcel service offered by Canada Post is the Expedited Parcel service. It is a trackable, proof-of-delivery service comparable to the combined Chinese registered small packet service. But the Expedited Parcel service costs much more to ship the same package to the same Canadian customer: between $5.24 and $18.20, depending the shipper's location in Canada.

Perversely, even that huge cost advantage is not the only advantage Chinese mailorder companies have over Canadian companies. No HST is collected on shipments under $20 of declared value.

For Canadian companies competing for international business, Canada Post offers no trackable, proof-of-delivery option for its international small packet service. Canadian companies would have to ship this package without tracking and without proof-of-delivery at a significantly higher cost. The cost ranges from $7.10 to $10.34, depending on destination. If tracking and proof of delivery are needed, then the only available option is to bump up to the much expensive parcel post or Xpresspost services.

ADVANTAGE CHINA!

The Package Details
Dimensions:15 cm wide x 11 cm high x 8.5 cm thick
Weight:224 grams
Origin:Guangzhou, China
Destination:Goodwood, Ontario, Canada
Carriers:China Post, Canada Post
Mail class:Registered Small Packet Air
Postage paid:CNY 28.66 (= CAD 4.59)
Postage if mailed in Canada to the same customer:CAD 5.24 to 18.20 (via Expedited Parcel)
Postage if mailed in Canada to international customers:CAD 7.10 to 10.34 (via Small Packet Air)
Mailing date:2012-04-26
Arrival date:2012-05-14
Time in transit:12 business days
Declared value:USD 8.00
Declared Contents:[In Chinese]
Actual Contents:Hat
HST not collected:CAD 1.04

Front of package showing customs sticker with a declared value of USD 8.00 (click on image for a closer view)
Back of package showing postage paid: 6.12 Chinese yuan, which is about 99 cents in Canadian funds (click on image for a closer view)
Air Mail Package Weighing 48g from China

This is another package from China, this time a bubble-padded envelope weighing 48 grams. It was mailed by international air mail, and it cost the shipper 6.12 Chinese yuan. That is about 99 cents in Canadian funds. This package does not exceed the 2 cm thickness limit that Canada Post imposes on its lettermail service, so this can be mailed as a Lettermail package in Canada. It would cost Canadian shippers $1.29. One has to marvel over how the Chinese can deliver the same package halfway around the world for less than it costs to mail it from Toronto to Hamilton.

To add to the disadvantage, no HST was charged to the customer. This amounts to a huge tax advantage for Chinese companies selling to Canadians.

If a Canadian company were to ship this package to the United States or Europe, it would pay more than the Chinese company. To the U.S. the postage would be $2.10, and to Europe, $4.20.

ADVANTAGE CHINA!

The Package Details
Dimensions:17.5 cm wide x 12 cm high x 1.6 cm thick
Weight:48 grams
Origin:China
Destination:Goodwood, Ontario, Canada
Carriers:China Post, Canada Post
Mail class:International Air Mail
Postage paid:CNY 6.12 (= CAD 0.99)
Postage if mailed in Canada to the same customer:CAD 1.29 (via Lettermail Non-standard)
Postage if mailed in Canada to international customers:CAD 2.10-4.20 (via Lettermail Non-standard)
Mailing date:2012-05-04
Arrival date:2012-05-22
Time in transit:12 business days
Declared value:USD 8.00
Declared contents:Handicraft
Actual contents:Wooden necklace
HST not collected:CAD 1.04

Front of package (click on image for a closer view)
Back of package showing customs form with a declared value of USD 10.00 (click on image for a closer view)
Air Mail Package Weighing 146g Shipped from Hong Kong

This is another package from Hong Kong, this time a bubble-padded envelope weighing 146 grams. It was mailed by International Bulk Air Mail, and it cost the shipper 12.41 Hong Kong dollars. That is about $1.66 in Canadian funds. This package does not exceed the 2 cm thickness limit that Canada Post imposes on its lettermail service, so this can be mailed as a Lettermail package in Canada. It would cost Canadian shippers $2.10.

To add to the disadvantage, no HST was charged to the customer. The package was opened by Canada Customs, but no tax was levied.

If a Canadian company were to ship this package to a customer in the United States or Europe, it would pay more than the Hong Kong company would. To the U.S. the postage would be $3.70, and to Europe, $7.40.

ADVANTAGE HONG KONG!

The Package Details
Dimensions:14 cm wide x 11 cm high x 2.0 cm thick
Weight:146 grams
Origin:Hong Kong
Destination:Goodwood, Ontario, Canada
Carriers:Hongkong Post, Canada Post
Mail class:International Bulk Air Mail
Postage paid:HKD 12.41 (= CAD 1.66)
Postage if mailed in Canada to the same customer:CAD 2.10 (via Lettermail)
Postage if mailed in Canada to international customers:CAD 3.70-7.40 (via Lettermail)
Mailing date:2012-05-??
Arrival date:2012-06-01
Time in transit:??
Declared value:USD 10.00
Declared contents:Assessories
Actual contents:Pocket knife
HST not collected:CAD 1.30

Front of package showing customs form with a declared value of USD 5.00 and affixed postage of 13.00 Chinese yuan (click on image for a closer view)
Side of package showing was shipped by small packet air (click on image for a closer view)
Back of package showing registration bar code (click on image for a closer view)
Air Mail Package Weighing 128g Shipped from China

This irregular shaped package from China weighed grams. It was mailed by small packet air and was registered. It cost the shipper 13.00 Chinese yuan, which is about $2.10 in Canadian funds. This package is thicker than 2 cm so it cannot be shipped by lettermail in Canada; so Canadian shippers would have to ship this as a parcel. By expeditied parcel this would cost between $5.24 and $18.20 depending on the shipper's location.

In addition, no HST was levied.

A Canadian company shipping this package to a customer in the United States or Europe would pay a lot more than the Chinese company did. By the air small packet service it would cost $7.10 to the U.S. and $8.65 to Europe (and $10.34 to more distant destinations). In Canada small packets cannot be registered, so there is no tracking and no proof of delivery available to Canadian shippers.

ADVANTAGE CHINA!

The Package Details
Dimensions:21 cm wide x 20 cm high x 7 cm thick
Weight:128 grams
Origin:China
Destination:Goodwood, Ontario, Canada
Carriers:China Post, Canada Post
Mail class:Small Packet Air, Registered
Postage paid:CNY 13.00 (= CAD 2.10)
Postage if mailed in Canada to the same customer:CAD 5.24 to 18.20 (via Expedited Parcel)
Postage if mailed in Canada to international customers:CAD 7.10 to 10.34 (via Air Small Packet)
Mailing date:2012-05-27
Arrival date:2012-06-12
Time in transit:12 business days
Declared value:USD 5.00
Declared contents:?
Actual contents:Hat
HST not collected:CAD 0.65

Front of package with registered mail tracking bar code, customs form with a declared value of USD 4.00, and affixed postage of 26.32 Chinese yuan (click on image for a closer view)
Air Mail Package Weighing 200g Shipped from China

This box from China was mailed by air mail and was registered. It cost the shipper 26.32 Chinese yuan, which is about $4.23 in Canadian funds. This package is thicker than 2 cm so it cannot be shipped by lettermail in Canada; so Canadian shippers would have to ship this as a parcel. By expeditied parcel this would cost between $5.24 and $18.20 depending on the shipper's location. No HST was levied.

A Canadian company shipping this package to a customer in the United States or Europe would pay a lot more than the Chinese company did. By the air small packet service it would cost $7.10 to the U.S. and $8.65 to Europe (and $10.34 to more distant destinations). In Canada small packets cannot be registered, so there is no tracking and no proof of delivery available to Canadian shippers.

ADVANTAGE CHINA!

The Package Details
Dimensions:21 cm wide x 16 cm high x 11 cm thick
Weight:200 grams
Origin:China
Destination:Goodwood, Ontario, Canada
Carriers:China Post, Canada Post
Mail class:Airmail Letter, Registered
Postage paid:CNY 26.32 (= CAD 4.23)
Postage if mailed in Canada to the same customer:CAD 5.24 to 18.20 (via Expedited Parcel)
Postage if mailed in Canada to international customers:CAD 7.10 to 10.34 (via Air Small Packet)
Mailing date:2012-05-28
Arrival date:2012-06-18
Time in transit:15 business days
Declared value:USD 4.00
Declared contents:?
Actual contents:Hat
HST not collected:CAD 0.52

Front of package showing affixed postage meter indicia (click on image for a closer view). Postage was 4.38 Chinese yuan according to rates on parcelfromchina.com (accessed May 6, 2013).
Back of package showing customs declaration (click on image for a closer view)
Small Packet Air Package Weighing 28g Shipped from China

This package from Guangzhou, China weighed 28 grams. It was mailed by small packet air. It cost the shipper 4.38 Chinese yuan, which is about $0.72 in Canadian funds. This package is thicker than 2 cm so it cannot be shipped by lettermail in Canada; so Canadian shippers would have to ship this as a parcel. By expeditied parcel this would cost between $5.24 and $18.20 depending on the shipper's location.

In addition, no HST was levied.

ADVANTAGE CHINA!

The Package Details
Dimensions:20 cm wide x 15 cm high x 3 cm thick
Weight:28 grams
Origin:China
Destination:Goodwood, Ontario, Canada
Carriers:China Post, Canada Post
Mail class:Small Packet Air
Postage paid:CNY 4.38 (= CAD 0.72)
Postage if mailed in Canada to the same customer:CAD 5.24 to 18.20 (via Expedited Parcel)
Mailing date:2013-03-30
Arrival date:2013-05-06
Time in transit:12 business days
Declared value:USD 9.00
Declared contents:Phone repair part
Actual contents:Phone repair part
HST not collected:CAD 1.19