Amazon Targets Significant Growth in Canadian Market
Amazon is preparing for rapid expansion in Canada, projecting a package volume increase of over 40% from 2026 to 2029. Despite escalating trade tensions between the US and Canada, the company remains confident in the market’s potential, focusing on expanding its fulfillment capabilities and boosting same-day delivery rates. Internal corporate documents reveal Amazon aims to fulfill 93% of packages within a 1,000-mile radius by 2029.
US Tariffs Disrupt Supply Chain Decisions
On July 20, 2026, the US government imposed a 50% tariff on select Canadian imports, impacting Amazon’s supply chain strategies. Earlier in March, Amazon had already adjusted by shifting some direct Canadian procurement orders from the US to China to mitigate rising costs caused by tariffs. Although parts of Canadian imports benefit from protection under the USMCA agreement, Amazon warns that growing trade policy uncertainties increase the risk of economic downturns in Canada.
The situation escalated with Canada announcing reciprocal tariffs on US consumer goods starting September 8, potentially affecting categories such as home appliances and electronics. Amazon’s "remote fulfillment" program, which allows third-party sellers to store inventory in US warehouses for Canadian customers, may face disruptions. An Amazon spokesperson noted that no significant price increases have yet been observed in Canada due to the new tariffs, and the company continues to maintain competitive pricing relative to rivals.
Intensified Competition Drives Delivery Enhancements
Internal assessments highlight that major Canadian retailers including Walmart, Loblaws, and Best Buy have been rapidly advancing their delivery capabilities, putting pressure on Amazon. Currently, Amazon provides same-day delivery coverage to approximately 54.5% of Canadian Prime members, whereas competitors offer two- to four-hour deliveries covering 70% to 85% of their customer base. To contend with this, Amazon plans to open additional fulfillment centers and increase local delivery to strengthen service.
Walmart Canada's June 2026 launch of Walmart+ includes unlimited same-day delivery, further intensifying competition.
Adjusting Logistics Models to Manage Cost and Efficiency
Amazon’s analysis of last-mile delivery in Canada found third-party partnerships reduce costs by nearly 50% compared to American self-operated delivery models. Financial reviews indicate that investing in 12 new traditional delivery hubs showed negative returns over five years, leading Amazon to pivot towards lower-cost cooperative delivery arrangements. A company spokesperson confirmed that expansion plans remain fluid and that detailed updates will be announced in due course.
Sustained Investments and Vigilant Risk Monitoring
Since 2010, Amazon has invested over CAD 65 billion in Canada, employing more than 46,000 workers. The company commits to enhancing fast delivery, expanding product variety, and maintaining price competitiveness. Concurrently, Amazon is closely monitoring tariff developments and their possible effects, striving to safeguard customer interests and adapt innovation strategies amid evolving international trade challenges.