The End of the U.S. De Minimis Program: How GTA Industrial Real Estate is Feeling the Ripple Effects

As of August 29, 2025, the U.S. has officially axed its de minimis exemption, stripping Canadian small businesses of duty-free shipping for parcels under USD $800.

What was once a seamless gateway for e-commerce and cross-border trade now demands full customs filings, tariffs, and delays—potentially adding 10-20% to shipping costs and weeks to delivery times.

For GTA-based exporters in Mississauga’s logistics hubs or Vaughan’s manufacturing zones, this isn’t just a policy tweak—it’s a seismic shift reshaping supply chains and industrial space demand.

One month in, early signs point to stockpiling pressures and reconfiguration needs that could impact the GTA’s already softening market.

For this week’s issue, we’ll take a look at how the suspension of the De Minimis exemption’s ripple effects may play out in the GTA industrial market.

Understanding the De Minimis Shake-Up and Its Broader Implications

The de minimis rule, rooted in USMCA trade pacts, allowed low-value imports to bypass duties and paperwork, fuelling a boom in direct-to-consumer shipments from Canada—handling over 1.2 billion parcels annually, with apparel, electronics, and consumer goods comprising 60% of the volume.

Its abrupt end—driven by U.S. efforts to curb “unfair” trade practices and protect domestic industries—hits Canadian SMBs hard: GTA-based manufacturers and online retailers reliant on U.S. sales (which account for 75% of Canada’s exports) face eroded margins and customer pushback, with some estimating a 15-25% drop in cross-border order volumes.

In the GTA, where industrial vacancy hovers around 5%, this translates to dual-edged impacts on real estate:

• Logistics Strain and Storage Surge: Delays at U.S. borders are prompting GTA firms to hold more inventory domestically, boosting short-term demand for flexible warehousing in Peel and Halton regions. Early data shows an uptick in consolidation facility inquiries, as businesses batch shipments to minimize per-parcel fees, while also exploring bulk storage for seasonal goods like holiday apparel. On the flipside, it may also mean lowered demand as U.S. consumers substitute to alternative goods.
• E-Commerce and Manufacturing Headwinds: Slower U.S. market access could idle space in e-commerce fulfillment centers, exacerbating negative absorption. Meanwhile, broader tariff threats are dampening investor appetite, with industrial transaction volumes off substantially. This has translated into leverage for both Tenants and Investors.
• Opportunity in Adaptation: Toronto’s new Industrial Property Tax Deferral Program offers relief for tariff-hit owners, deferring 2025 payments penalty-free until November—a lifeline for GTA portfolios navigating these waters. This could stabilize cash flows for landlords, encouraging them to offer competitive incentives to attract adaptive tenants like those pivoting to nearshoring models.

Overall, while the policy adds friction to many of the GTA’s export-oriented industrial operations, it may accelerate trends like supply chain diversification, potentially lifting demand for specialized spaces in secondary submarkets by Q2 2026.

Actionable Strategies for GTA Industrial Stakeholders

Source: MPR News.

To weather this storm, tenants and investors should pivot proactively, focusing on resilience and cost mitigation:

1. Optimize Supply Chains for Efficiency: GTA logistics operators can consolidate into larger, less frequent shipments via bonded warehouses such as those in proximity to Pearson Airport, reducing customs hits by up to 30%. Tools like advanced inventory software (e.g., integrating AI for predictive stocking) can forecast delays, cutting holding costs—essential as U.S. processing times stretch to 5-7 days and affect just-in-time models. For example, a Mississauga-based e-tailer could reroute via Hamilton’s port for consolidated ocean-rail hybrids.
2. Diversify Markets and Nearshore Locally: Shift focus to domestic or even EU sales, leveraging GTA’s proximity to underutilized ports like Hamilton for rerouting.
3. Secure Tenant-Friendly Terms Amid Uncertainty: With softening rents ($17.29 PSF Net average), push for Tenant Improvement Allowances (TIAs) covering automation upgrades or 3-6 months free rent to offset tariff buffers—potentially saving on first-year expenses. Landlords, capitalize by marketing “tariff-resilient” properties with high-clearance bays for efficient storage, targeting sectors like consumer goods that need quick pivots.
4. Tap Relief Programs and Monitor Policy Shifts: Enroll in Toronto’s tax deferral and consult CBSA for streamlined filings, which could reclaim up to 5% of compliance costs through rebates. Watch for U.S. midterm adjustments, as SMB lobbying could reinstate partial exemptions in 2026—use this window to audit leases for flexibility clauses.
5. Invest in Tech-Enabled Resilience: Forward-thinking stakeholders can retrofit spaces with warehouse management systems (WMS) such as IoT sensors for real-time inventory tracking or blockchain for customs documentation, reducing delays.

Conclusion

In the GTA’s evolving industrial landscape, the de minimis demise underscores the need for agile strategies amid U.S. policy changes.

With vacancy around 5% and rents easing to approximately $17.00 per square foot Net, tenants gain leverage for concessions like free rent and TIAs, while owners can position assets as resilient havens.

Yet, as supply chain snarls drive domestic stockpiling—potentially lifting demand—proactive adaptation is key to turning challenges into competitive edges.

The next six months will test resilience; those who diversify and optimize now will emerge stronger. 

For a confidential consultation or a complimentary opinion of value of your property please give us a call.

Until next week…

Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.

Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.

Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.

Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development

About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.

In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.

For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.

Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih