Retail Council of Canada (RCC) commends the Government for its decision to maintain tax fairness on retail purchases, whether made from retailers here in Canada or from online vendors outside our borders. RCC has led the retail industry’s fight to ensure a continued level playing field on the annual sale of more than $80 billion-worth of shippable consumer goods.
The current de minimis rule exempts imported parcels with a value under $20 from sales taxes and customs duties. Foreign online vendors have been pressing the Canadian government to increase that level to as high as $200 in this year’s budget. Had that lobbying effort succeeded, the tax-included price on every item under $200 sold by a merchant in Canada would have been significantly more expensive than the comparable item shipped from a foreign source.
“The Government’s decision not to change the de minimis rate is a victory for tax fairness and recognition of the importance of Canada’s $530 billion+ retail industry and our workforce of two million Canadians”, said Diane J. Brisebois, CEO. “Foreign online vendors have lobbied relentlessly to obtain favourable tax treatment for themselves but there is no policy rationale for providing an incentive to shop literally anywhere but Canada and to invest and hire outside our borders”, Ms. Brisebois added.
The government’s approach is in keeping with policy moves elsewhere in the World. This year, Australia will lower its de minimis rate to $0 and the European Commission recently proposed a €0 de minimis level throughout the EU. Even in online market leader Amazon’s U.S. home, 39i states[i] now have regimes in place to collect state and local taxes on interstate shipments, levelling the playing field with local businesses.
Retail is Canada’s largest employer with over 2 million Canadians working in our industry. In 2015, the sector generated payroll over $59 billion and $340 billion in sales (excluding vehicles and gasoline). Retail Council of Canada (RCC) members represent more than two-thirds of retail sales in the country. RCC is a not-for-profit industry-funded association and represents small, medium and large retail business in every community across the country. As the Voice of Retail in Canada, we proudly represent more than 45,000 storefronts in all retail formats, including department, grocery, specialty, discount, independent retailers and online merchants.