Why did I get charged a brokerage fee? Courier fees explained

It's one of the most common surprises in online shopping. You buy something from a US or overseas store, the tracking says it's arrived in Canada, and then the courier asks you to pay before they'll deliver it. Sometimes the bill is a few dollars. Sometimes it's more than the thing you bought.

Part of that bill usually goes to the government. Part of it goes to the courier. The problem is that most bills don't make it obvious which is which.

Why couriers charge you at all

Every commercial shipment coming into Canada has to be declared to the Canada Border Services Agency (CBSA). Someone has to prepare that declaration, calculate any duty and tax, and pay CBSA. When a store ships by UPS, FedEx, DHL or Purolator, the courier normally does this as your customs broker by default, and then bills you for the service plus whatever they paid on your behalf.

You usually didn't choose that broker, and you usually didn't see a price list. That's the root of most of the frustration.

The charges you might see

• GST/HST or PST. Sales tax, collected for the government. Often the largest line on a small order.
• Customs duty. Also for the government. Many goods that qualify as made in the US or Mexico are duty free under CUSMA, but not all goods shipped from the US qualify.
• Entry preparation or brokerage fee. The courier's charge for preparing the customs declaration. For ground services this is often tiered by the value of the order, and it can be a large share of a small order's value.
• Disbursement or advancement fee. A charge for paying the duty and tax on your behalf, usually a percentage of those amounts with a minimum.
• Processing, transaction or "other" fees. Additional handling charges that vary by carrier and service.

Express air services often include the entry preparation in the shipping price, while ground services often don't. The same order can produce a very different bill depending on which service the store picked.

What a typical bill looks like

Here's a sample breakdown for a CA$300 order shipped by ground courier from the US. Illustrative numbers only.

In this example, 80% of what you pay at the door goes to the courier, not the government.

When duty and tax actually apply

For courier shipments, CBSA sets low-value thresholds based on where the goods come from. As of CBSA's current guidance:

• Goods from the US or Mexico: no duty or tax up to CAD $40. Between $40 and $150, tax applies but no duty. Above $150, duty and tax can both apply.
• Goods from anywhere else: no duty or tax up to CAD $20. Above that, both can apply.

These thresholds cover government charges. They don't stop a courier from charging its own fees, though for the lowest-value shipments many carriers charge little or nothing.

Why the bills feel unfair

The same stories come up again and again:

• The courier's fee was bigger than the tax, or bigger than the item
• The store advertised free shipping, and nobody mentioned fees at the door
• The bill was labelled "duties and taxes" but included the courier's own charges
• Duty was charged on something that looked like it should have been duty free
• The package was held until the fee was paid, with no chance to question it first

That third point has gone further than complaints. In 2021, a proposed class action in British Columbia alleged that DHL presented part of its own processing fees to Canadian customers as if they were government duties and taxes. Whatever the outcome, it shows how hard these bills can be to read.

What you can do

1. Ask for an itemized breakdown. You're entitled to know which part went to CBSA and which part is the courier's fee.
2. Check the thresholds. If your order was under $40 from the US, or duty was charged on goods that should qualify under CUSMA, something may be wrong.
3. Request an adjustment if duty or tax was wrong. CBSA has a process for correcting and refunding duty and tax that shouldn't have been charged. The courier's fee is a separate matter to raise with the courier.
4. Next time, check how the store ships. Stores that ship "delivered duty paid" collect everything at checkout. Stores that ship by postal service often result in lower handling charges than ground couriers.

If you import regularly

For a one-off order, a courier fee is annoying. For a small business bringing in shipments every week, it's a real cost that compounds. Once you're importing regularly, you can often choose your own customs broker instead of the courier's default service, and pay a fraction of the per-shipment fees.

Not sure if your bill was fair? Send us a photo of it. We'll break down what went to the government, what went to the courier, and whether anything looks worth questioning.