Low-Value Shipment (LVS) Threshold
- The Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) will increase and harmonize the low-value shipment thresholds to CDN/USD$2,500 for expedited customs clearance from the current levels of CDN$1,600 for Canada and USD$2,000 for the United States.
- Canada will also increase the low-value shipment threshold to CDN$2,500 for exemption from North American Free Trade Agreement (NAFTA) Certificate of Origin requirements, thereby aligning it with the current threshold of the United States.
- The LVS threshold is used by the CBSA to differentiate between various accounting procedures required by both the Customs Act and the Accounting for Imported Goods and Payment of Duties Regulations.
- The LVS threshold impacts all commercial and casual goods entering Canada through the CBSA's commercial processes, including the regular commercial import stream (i.e., high-value shipments), the Courier LVS Program and the Postal Program.
- In the postal stream, the increase in the LVS threshold will allow more commercial shipments to be processed under the same simplified invoice process as used in the casual stream.
- The overall impact in the Postal Program is projected to be relatively small considering that last fiscal year it processed fewer than 6,000 commercial items that exceeded the CDN$1,600 threshold.
- In the CBSA's commercial processes, goods entering Canada with a declared value for duty (VFD) not exceeding the LVS threshold must be accounted formally on a B3 Canada Customs Coding Form by the 24th day of the month following the month of release.
- However, goods with a VFD that exceeds the LVS threshold must be accounted formally on a form B3 within five (5) days of release.
- To qualify for the Courier LVS Program, shipments must be imported by approved program participants and have a VFD of less than the LVS threshold, and cannot contain any goods that are prohibited, restricted or controlled.
- In the 2011/2012 fiscal year, 34.8 million shipments valued at less than CDN$1,600 were processed in the Courier LVS Program.
- As a result of the increase in the LVS threshold, approximately 1.5 million imports per year valued between CDN$1,600 and CDN$2,500 that are currently processed through the regular commercial import stream could transition potentially into the Postal or Courier LVS Programs.
Benefits of Increase to LVS Threshold
The LVS threshold increase will:
- accelerate the legitimate flow of goods into Canada by allowing more shipments to qualify for the LVS clearance processes of the regular commercial import stream and the Postal and Courier LVS Programs;
- help to alleviate some of the backlog in the regular commercial import stream by allowing more shipments to qualify for the streamlined Courier LVS Program
- help to decrease the number of penalties imposed on importers because more shipments will qualify for the LVS extended accounting time frame, thereby affording importers additional time to account formally for their goods;
- result in cost savings to the importing community by increasing the volume of imports that can be processed using the Postal and Courier LVS Programs.
- assist the CBSA to fulfill its mandate to support national security and public safety priorities, while facilitating the free flow of goods into Canada.