Quebec retailers criticize federal budget for ignoring Shein, Temu

Quebec's retail council says it is “deeply disappointed” the federal budget includes no measures to address what unfair competition from fast-fashion retailers.

The Quebec Retail Council (CQCD) says it is “deeply disappointed” that the 2025 federal budget includes no measures to address what it calls unfair competition from ultra-fast fashion platforms like Shein and Temu.

The group says Ottawa missed a clear opportunity to level the playing field for Canadian retailers who follow tax, social, and environmental rules, while foreign companies profit from Canadian consumers without being held to the same standards.

“The federal government had a clear opportunity to correct an unfair situation that penalizes our retailers and manufacturers, but it chose to look the other way,” said CQCD president and CEO Damien Silès. “While local businesses meet their obligations, foreign players are raking in profits in Canada without being subject to the same rules.”

Recent CQCD data shows that 34 per cent of Quebec consumers made a purchase on Temu in the past six months, up from 21 per cent in January.

Shein’s numbers rose from 16 to 25 per cent over the same period — evidence, the group says, of the growing dominance of these platforms and the erosion of local retail.

Retail analyst Carl Boutet says the rapid rise of Shein and Temu has taken much of the retail world by surprise.

“It’s just the ascendancy, the rapid ascendancy of Temu and Shein that’s catching everybody’s attention right now,” he said.

Both companies ship products directly to consumers, often one item at a time. According to experts, that practice takes advantage of a loophole that allows them to offer significantly lower prices than domestic retailers.

“The fact that the products come in one envelope at a time often is sort of circumventing a lot of the processes that local brands and businesses need to adhere to,” Boutet said.

The CQCD argues the government’s inaction worsens an already uneven playing field. It points to federal plastics regulations that require Canadian businesses to disclose the plastic composition of their products, while exempting foreign companies that produce large amounts of plastic textiles and packaging.

“We’re making life harder for local retailers while rolling out the red carpet for foreign platforms that don’t respect our standards or values,” Silès said. “The result is a two-tier retail system that undermines our jobs, our businesses, and our environmental transition.”

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In response to questions about the CQCD’s concerns, the Department of Finance said the federal government is aware of and closely monitoring “the significant increase in small-value parcels stemming from e-commerce platforms, as well as the evolving approaches of other economies.”

It noted that G7 Finance Ministers and Central Bank Governors recently agreed to address the risks linked to the surge in low-value shipments entering G7 markets.

Canada, the department said, already has one of the lowest import thresholds in the world: $20 for shipments from most countries, with higher limits applying only to goods imported by courier from the United States or Mexico under the Canada-United States-Mexico Agreement.

The statement added that other jurisdictions are also re-evaluating their import thresholds. For instance, the European Union eliminated its €22 sales tax exemption in 2021 and has proposed scrapping its €150 customs duty exemption starting in 2027.

The CQCD is calling on Ottawa to apply the same fiscal and environmental rules to foreign e-commerce platforms, strengthen oversight of imported products, and recognize platforms like Shein and Temu as responsible economic operators.

CTV News has reached out to Temu and Shein for comment but has so far not received a response.