Shipping is an important part of the Canadian economy, but it can be very expensive.
There are a number of reasons for this, including the high cost of fuel, the vastness of the country, and the need to ship goods through difficult terrain.
All of these factors add to the cost of shipping, making it one of the most expensive countries in the world to ship to.
One of the biggest reasons for the high cost of shipping in Canada is the vastness of the country.
With a land area of nearly 10 million square kilometers, Canada is one of the largest countries in the world.
This means that there is a lot of ground to cover when shipping goods from one place to another. The farther the distance, the more expensive the shipping will be.
Another factor that contributes to the high cost of shipping in Canada is the terrain.
Much of the country is mountainous or otherwise difficult to access, which makes it expensive to ship goods to many parts of the country.
In addition, the climate can also make shipping difficult and expensive. In the winter, for example, snow and ice can make it difficult to get goods to their destination on time.
Now let’s dig deeper!
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Why Is Shipping so Expensive in Canada?
The high cost of shipping goods to and from Canada is due, in part, to the country’s expansive geography.
Canada is the second-largest country in the world by landmass, and its many remote areas make it difficult and expensive to transport goods.
Moreover, Canada has a relatively small population relative to its size, which means that there are fewer potential customers for businesses within the country.
This decreases the incentive for companies to invest in logistics infrastructure, which raises the cost of shipping goods.
Here are detailed reasons why shipping is so expensive in Canada:
1. Geography of Canada
Canada is a large country, with a population of about 36 million people. It is the world’s second-largest country in terms of landmass, after Russia.
Canada shares a border with the United States to the south and is bordered by the Atlantic Ocean, Pacific Ocean, and the Arctic Ocean.
The great distances between Canada’s major urban centers and the fact that much of the country is sparsely populated make shipping within Canada expensive.
The cost of shipping from one end of the country to the other can be significant, particularly for time-sensitive or perishable goods.
2. Brokerage Fees
One reason for the high cost of shipping in Canada is the fees charged by brokerage firms.
When parcels are shipped into Canada, they must go through a customs broker, who charges a fee for their services.
This fee can be quite expensive, especially for small packages.
The fees charged by brokerage firms vary depending on the size and weight of the package, as well as the value of the contents.
For example, a small package that weighs less than 2 kg (4.4 lbs) and is valued at less than $20 CAD will have a brokerage fee of $9.95 CAD.
A larger package that weighs more than 20 kg (44 lbs) and is valued at more than $2,000 CAD will have a brokerage fee of $235 CAD.
In addition to the broker’s fee, there are also other charges that may apply, such as import duties and taxes.
These fees can add up quickly, making it quite costly to ship packages into Canada.
3. Tax and Import Duty
One reason why shipping is expensive in Canada is that the country has high taxes and import duties.
For example, when you buy a product from another country and have it shipped to Canada, you may be charged a customs duty of up to 18% of the item’s value.
There are also federal and provincial sales taxes that can add up to another 5% or more.
So, even if the item you’re shipping is relatively inexpensive, the total cost can quickly add up once all the taxes and duties are taken into account.
4. High Gas Price
As mentioned in the article, one of the reasons for the high shipping costs in Canada is the high price of gas. Gas is expensive in Canada because the country has a small population and is spread out over a large area.
This means that there is not as much demand for gas as there is in other countries, which drives up the shipping price. In addition, the high cost of living in Canada means that people have less disposable income to spend on gas.
5. Canada Post workers are highly Paid
While it is true that the Canadian government offers higher wages and benefits to its postal workers than in many other developed countries, this does not explain the entirety of why shipping rates in Canada are so high.
Other developed nations such as Japan, Germany, and the United Kingdom all have state-owned postal services that manage to charge lower rates for shipping than Canada Post.
6. The monopoly of Canada Post
One of the main reasons why shipping rates in Canada are so expensive is because of the monopoly that Canada Post has on the Canadian market.
Canada Post is the only company that is legally allowed to deliver letters and packages through the Canadian postal system. This gives them a lot of power when it comes to setting prices.