Amazon is set to significantly increase its operations and package volume in Canada over the coming years, with internal company documents indicating growth rates there are expected to surpass those in the United States. This expansion strategy is unfolding even as the e-commerce giant navigates an intensifying tariff dispute between the US and Canada.
The confidential documents, seen by Business Insider, reveal that Amazon intends to enhance its fulfilment capacity, extend its same-day delivery services, and bolster its overall logistics network across Canada. These detailed expansion blueprints were reportedly still being laid out in late July, subsequent to President Donald Trump’s announcement of additional 50% tariffs on specific Canadian imports.
Earlier company records from March already highlighted the impact of existing tariffs on Amazon's Canadian supply chain decisions. For example, some direct-import sourcing for Canadian markets was shifted from the US to China "to avoid tariffs."
This situation offers a rare insight into the strategic balancing act confronting major retailers as cross-border commerce is reshaped by trade tensions. Amazon's most recent forecasts suggest that while earlier tariffs prompted supply chain adjustments, the ongoing trade disputes have not yet derailed its broader growth ambitions in Canada. The company is continuing to invest, believing that enhanced delivery speeds can help it gain a competitive edge.
An Amazon spokesperson confirmed the company's long-standing commitment to Canada, stating that it has invested more than C$65 billion (approximately $47 billion) in the country since 2010. The company currently employs over 46,000 individuals across its Canadian operational sites.
"For nearly 25 years, Amazon has been investing to serve customers and communities across Canada," the spokesperson told Business Insider. "We continue to invest in fast delivery, broad selection and low prices for customers in Canada, and are always exploring new ways to serve them."
The spokesperson also acknowledged the evolving trade environment. "As we navigate the evolving trade policy landscape, our focus remains on delivering value to our customers and innovating on their behalf. Like many multinational companies, we are closely monitoring trade developments, including new tariffs in Canada, to understand any potential impacts," they added.
The trade landscape has deteriorated since Amazon's initial supply chain adjustments. On 20 July, President Trump announced additional 50% tariffs on certain Canadian imports, including goods previously protected under the US-Mexico-Canada Agreement (USMCA). These tariffs came into effect in August. In retaliation, Canada announced its own tariffs on US imports, effective from 8 September, targeting consumer goods such as appliances and electronics.
These retaliatory measures from Canada could pose new risks for retailers moving goods from the US into Canada. For instance, Amazon's Remote Fulfillment programme allows third-party sellers to list eligible products on its Canadian marketplace while holding inventory in US warehouses, with products crossing the border post-order.
However, the Amazon spokesperson indicated that the company had not yet observed these new Canadian tariffs resulting in higher prices on its Canadian marketplace. "Prices of products in our Canadian store have not increased outside of normal fluctuations across the millions of items on Amazon, and we continue to meet or beat other retailers' prices across our vast selection of products," the spokesperson stated.
Amazon's decision to continue investing in Canada is underpinned by significant growth potential. The company projects that Canadian package volume will increase by over 40% in total between 2026 and 2029, with annual growth rates consistently outstripping those in the US.
Despite this potential, Amazon faces substantial competitive challenges. A March planning document highlighted that "Amazon Canada faces a critical competitive challenge as major retailers are outpacing our delivery capabilities, putting future growth at risk." The document cited investments made by rivals such as Walmart, Loblaws, and Best Buy in Canada.
One document indicated that Amazon offered same-day delivery to approximately 54.5% of its Canadian Prime members. In contrast, competitors reportedly offered two-to-four-hour delivery services to between 70% and 85% of Canadian households, demonstrating a significant gap in rapid delivery coverage.
Amazon's plans aim to address this disparity by increasing fulfilment capacity. Projections indicate that by 2029, this expansion would enable 63% of Canadian shipments to be fulfilled within 160 miles of customers and 93% within 1,000 miles.
Walmart, a key competitor, has also intensified its efforts in Canada. In June, it launched Walmart+ in Canada, offering benefits including unlimited same-day delivery.
Amazon's expansion strategy in Canada is not solely focused on constructing more warehouses. The company estimates that third-party last-mile delivery costs in Canada are roughly half those in the US, which reduces the financial incentive for Amazon to bring more deliveries in-house. This cost differential is significant enough to influence where and how Amazon builds its infrastructure.
A July document revealed that an evaluation of 12 additional conventional delivery stations in Canada projected negative five-year paybacks. Consequently, Amazon has opted to shift its strategy in these markets towards lower-cost, partner-based delivery models. The Amazon spokesperson reiterated that the company's plans are continually evolving, stating, "We will announce specific plans and new offerings as they are confirmed."
