Free Trade – NOT

I recently received a shipment of some wi-fi equipment ordered from a California-based supplier. The total came to USD$168 plus US$23.80 for UPS shipping (for a total of USD$191.80). However, that’s not the end of the story. You see, UPS collects the PST and GST (provincial and federal Canadian sales tax) due on the product. First there’s the tax on the base product (C$29.29), then there’s a brokerage fee that UPS adds in order to collect the GST (C$39.10) and then there’s a sales tax on the brokerage fee (C$2.74). The add on is another C$71.13. So, in order to compensate UPS for collecting C$29.29 in taxes, Canadians must pay UPS another $43. The same thing does not occur when something is ordered from another province. In that case, the purchaser is required to self assess the sales tax (at least the provincial portion – the GST portion is collected and remitted by the vendor assuming they are required to be registered to collect GST). So the system discriminates against purchases made from a US vendor as compared to a vendor in another province. That is the the Canadian version of free trade with the US. Not so free after all.