Amazon Sees Canadian Deliveries Jumping More Than 40% by 2029 as Tariffs Shift Some Sourcing From U.S. to China

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Amazon is preparing for a much busier Canadian operation even as the trade relationship that helped shape North American e-commerce becomes harder to navigate. Internal company forecasts reviewed by Business Insider project Amazon’s package volume in Canada could rise by more than 40% between 2026 and 2029, with percentage growth consistently exceeding that of the United States.

The expansion is not simply a bet on Canadians ordering more online. Amazon is examining where products should come from, how close inventory should sit to customers and whether traditional delivery stations still make financial sense. Tariffs have already prompted some Canadian direct-import sourcing to move from the United States to China, while faster competition from Walmart and other retailers is pushing Amazon to shorten delivery times. The result is a Canadian growth strategy increasingly shaped by both trade policy and logistics economics.

Canada Is Becoming a Bigger Growth Bet

Amazon’s internal forecasts point to Canadian package volume increasing by more than 40% in total between 2026 and 2029. Just as notable, the documents indicate that Canada’s annual percentage growth is expected to remain ahead of the United States during that period. The figures are preliminary rather than formal public financial guidance, but they show how important Canada has become within Amazon’s international logistics planning. The company was still working through expansion plans in late July, even as the tariff environment between Ottawa and Washington was deteriorating. That suggests Amazon has not treated the trade dispute as a reason to retreat from Canadian growth. Instead, it is trying to determine how to capture that growth without allowing cross-border costs or an expensive delivery network to undermine the economics.

The broader retail environment helps explain the optimism. Statistics Canada reported that Canadian retail e-commerce sales reached roughly C$5.7 billion in June 2026, rising 9.9% from May and accounting for 7.7% of total retail trade. Overall Canadian retail sales were about C$74.3 billion that month. Those numbers cover the entire retail sector, not Amazon specifically, but they show that digital purchasing remains deeply embedded in Canadian shopping habits. For a company already operating a large national fulfillment system, even modest shifts in how often households order everyday merchandise can translate into millions of additional packages. Amazon therefore faces a two-sided challenge: it needs enough infrastructure to handle substantially greater volume while avoiding investments that look attractive operationally but fail to generate acceptable returns.

Tariffs Are Rewriting the Supply Chain

One of the clearest signs of how trade tensions are affecting Amazon appeared in a March planning document reviewed by Business Insider. According to that document, the company had shifted some Canadian direct-import sourcing from the United States to China to avoid tariffs. The wording matters. It does not mean Amazon is broadly replacing American merchandise with Chinese merchandise, nor does it establish that every product routed through China becomes cheaper. It shows that tariff exposure has become another variable in sourcing decisions that already involve transportation costs, supplier availability, inventory levels and delivery time. A product that once made commercial sense entering Canada through an American supply chain can become less attractive when additional duties alter its landed cost. Large retailers can respond by changing suppliers, origins or import routes before consumers ever notice what happened behind the checkout screen.

That calculation has become more complicated in August. The United States moved the effective date of additional Section 338 duties on certain Canadian goods to August 22, while Canada announced counter-tariffs scheduled to begin September 8. Ottawa says its new measures will apply rates of 15%, 25% or 50% to C$27.6 billion worth of U.S.-origin imports, with targeted categories including steel, dairy products, appliances, agricultural equipment, pulp and paper products, and electronics. For Amazon and other retailers, the importance goes beyond any single tariffed item. Frequent policy changes can alter the relative cost of sourcing the same category from different countries. That means purchasing teams, marketplace sellers and logistics planners increasingly have to make trade-policy assumptions alongside conventional forecasts for demand, shipping and inventory.

Delivery Speed Has Become the Competitive Pressure Point

Amazon’s growth opportunity in Canada comes with an uncomfortable competitive gap. Internal documents reported by Business Insider estimated that Amazon offered same-day delivery to about 54.5% of Canadian Prime members, while competing retailers could reach between 70% and 85% of Canadian households within two to four hours. The comparison is not necessarily identical across every product category or geographic area, but Amazon itself viewed the gap as a serious challenge. Its planning material specifically pointed to delivery investments by Walmart, Loblaw and Best Buy. For customers, that contest becomes tangible in ordinary moments: a household that discovers it needs diapers, a charging cable or groceries before the evening may choose whichever retailer can reliably put the item at the door first. Selection still matters, but speed increasingly influences where the order begins.

Walmart added to that pressure in June 2026 by launching Walmart+ in Canada, the first market outside the United States where the retailer introduced that membership program. Canadian Walmart+ benefits include unlimited same-day delivery on eligible orders and an Express option that can deliver in two hours or less in supported areas. Amazon, meanwhile, has hardly been standing still. The company says more than 450 million items ordered by Canadian customers arrived the same day or the next day during 2025. It has also expanded additional same-day delivery windows in several markets, including Calgary, Edmonton, the Greater Toronto Area, Ottawa and parts of Southwestern Ontario. The competition is therefore shifting from whether fast delivery exists to how consistently retailers can provide it across more households, more products and more hours of the day.

Amazon Wants Inventory Closer to Canadian Households

Canada’s geography makes faster delivery unusually demanding. Population is concentrated in major metropolitan corridors, yet Amazon serves customers across a country spanning thousands of kilometres. Its internal plans attempt to reduce that disadvantage by putting more inventory within practical reach of buyers. By 2029, Amazon projects that 63% of Canadian shipments could be fulfilled within 160 miles, or about 257 kilometres, of the customer. It wants 93% to be fulfilled within 1,000 miles, or roughly 1,609 kilometres. Those targets reveal an important distinction: fast e-commerce depends on much more than the van making the final trip down a residential street. The location of inventory before an order is placed can determine whether a package spends hours or days moving through upstream parts of the network.

Amazon has already been shortening those distances in several Canadian markets. Its recent same-day expansion added or improved delivery windows in cities including Edmonton and Calgary, while established same-day service also covers large population centres such as Vancouver, Toronto, Ottawa and Montreal. Amazon says some Canadian orders can now reach customers within a matter of hours. Bringing inventory closer also reduces the number of long movements and handoffs required after checkout, which is one reason fulfillment placement has become central to the company’s strategy. A fulfillment centre several hundred kilometres closer to demand may be less visible to shoppers than a new delivery van, but it can have a greater effect on whether an order placed after breakfast arrives before bedtime.

The Cheapest Expansion May Not Be Another Warehouse

The expected surge in packages does not mean Amazon intends to cover Canada with conventional delivery stations. Internal estimates reported by Business Insider suggest third-party last-mile delivery costs in Canada are roughly half their U.S. level. That changes the economics of owning more of the final delivery network directly. Amazon reportedly evaluated 12 additional conventional Canadian delivery stations but determined that they would produce negative paybacks over five years. Instead of abandoning those markets, the company shifted its planning toward less expensive partner-based delivery models. That distinction is significant. Amazon can increase the number of households it reaches without necessarily building a full-scale Amazon-operated station in every location where package volumes rise.

The company has already demonstrated what that approach can look like. In March 2026, Amazon announced Delivery Service Partner hubs in Lethbridge, Alberta, and Owen Sound, Ontario. Orders are sorted at nearby Amazon delivery stations and transported to the smaller hubs, where independent delivery partners handle the final stage to customers. Amazon said the Owen Sound facility covers more than 7,500 square feet and the Lethbridge hub about 20,000 square feet. Similar operations had previously opened in Kingston, Cornwall and Sarnia. The model combines Amazon’s larger sorting network with locally operated delivery businesses, allowing the company to enter smaller markets with infrastructure tailored to expected volume rather than duplicating the cost structure used in major metropolitan areas. As package volumes grow, that flexibility could become one of the most important parts of Amazon’s Canadian expansion.

Cross-Border Sellers Face a New Tariff Calculation

The tariff problem extends beyond merchandise that Amazon purchases directly. Amazon’s Remote Fulfillment program allows eligible third-party sellers to offer products to Canadian customers while holding inventory in U.S. fulfillment centres. After a Canadian order is placed, qualifying inventory can move across the border rather than being stocked separately in Canada. The model can make international expansion easier for smaller sellers because they do not have to duplicate all of their inventory north of the border. But it also means changes in Canadian import rules can alter the economics of a sale quickly. A system designed around the convenience of a closely integrated North American market has to operate differently when tariffs create larger differences between domestic and cross-border inventory.

There is an important nuance in Canada’s September countermeasures: the duties apply to qualifying goods of U.S. origin under the applicable origin rules, not simply every parcel that happens to leave a warehouse located in the United States. That makes a product’s actual origin and tariff classification important. Sellers may therefore need to examine where products were made, how they are classified and whether changing fulfillment arrangements makes economic sense. Amazon told Business Insider that it was monitoring the new Canadian tariffs but had not observed product prices in its Canadian store increasing outside normal fluctuations at the time of the report. That does not guarantee prices will remain unchanged. It indicates that, so far, Amazon had not identified an abnormal marketplace-wide increase attributable to the new tariff environment.

A Huge Canadian Footprint Still Comes With Forecast Risk

Amazon is not starting this expansion from a small base. The company says it has invested more than C$65 billion directly in its Canadian operations since 2010, including both capital spending and operating expenditures. Amazon.ca has operated since 2002, and by the end of 2025 the company reported more than 46,000 employees and close to 70 operations sites across Canada. That network includes fulfillment centres, sorting facilities, delivery stations and other operations supporting a market in which customer expectations continue to rise. Amazon has also been adding smaller delivery hubs and faster service options rather than relying on a single expansion formula. The scale helps explain why changes in sourcing or last-mile economics can have large consequences: a seemingly small reduction in cost per package becomes meaningful when multiplied across hundreds of millions of deliveries.

Yet the most striking number in Amazon’s plans — more than 40% package-volume growth by 2029 — remains a forecast, not a promise. Business Insider reported that the internal projections are preliminary and subject to change, while Amazon itself says specific investments and new offerings will be announced as they are confirmed. Consumer demand could weaken, competitors could gain ground, tariffs could change again, and proposed facilities could fail financial tests. What is clearer is the direction of the strategy. Amazon appears willing to keep investing in Canadian fulfillment while becoming more selective about how goods enter the country and how the last mile is handled. In that sense, tariffs are not ending Amazon’s Canadian growth push. They are changing the map the company must use to pursue it.

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