As any shipper can tell you, it’s decidedly easier to ship domestic than it is to ship across the border. When crossing the border into Canada, you add several other variables that you have to consider when booking freight. This changes from situation to situation. For example, if you’re shipping freight cross-border from the U.S to Canada, there are different variables to consider when you’re shipping intra-Canada.
Intra-Canada freight, by definition, is the shipment of goods from one Canada address to another Canada address or, more simply put, the shipment both begins and ends in Canada. This is different from cross-border freight, which has Canada as either the origin or the destination, but not both.
Different Shipments Mean Different Taxes
The actual locomotion of freight aside, one of the most significant differences between the two is that intra-Canada shipments, ones that start and stop in Canadian provinces, are taxed differently. Each province has a different breakdown of what taxes will be applied to the shipment. Typically, a province will use one of (or a combination of) the following three tax codes:
GST – Goods and Services Tax
HST – Harmonized Sales Tax
PST – Provincial Sales Tax
Interestingly, Quebec has its own unique tax code, the QST, or Quebec Sales tax, which only applies to shipments with an origin and destination with Quebec. Aside from that, all provinces use some combination of the previously mentioned taxes for intra-Canada freight, with a slight variation in the percentages between the different provinces.
The Timing of Currency Conversion
Much the same as other countries, Canada has its own currency, and with it comes more complications for shippers. Currency conversion becomes an issue when a shipper decides to pay for their shipment in Canadian dollars. If your TMS doesn’t support currency conversion, it becomes a tedious and manual auditing process to ensure that everything is paid for and handled properly. Specifically, it’s a matter of determining when the currency needs to be converted during the shipment process because the foreign exchange rate can vary daily.
This needs to be reconciled both for the sake of customer service and to ensure that all of the appropriate taxes are being paid completely and in a timely fashion. It also means that what a customer is quoted at the beginning of the shipping process doesn’t include the applicable sales taxes from the various processes. While that’s generally understood for Canadian customers, it can lead to discrepancies between a Customer’s invoice and a Carriers invoice. This needs to be reconciled both for the sake of customer service and to ensure that all of the appropriate taxes are being paid completely and in a timely fashion.
Bringing You a Better Option for Canadian Freight
No system is complete when it first roles out and, if it is, then it quickly becomes obsolete as time progresses. At BlueGrace, we are dedicated to making sure that we have a robust system in place to help facilitate your shipment needs. In this case, it means updating our user interface and our processes to help make your Canadian books quick, accurate, and easy.
If you’d like to learn more about the processes we’ve updated, implemented, or changed, check out our Intra-Canada Freight webinar below.