Guide to Importing Goods to Canada
Canada’s stable political environment, robust economy, and strong financial sector make it an attractive destination for non-Canadian businesses looking to market their products. To ensure compliance with customs regulations, understanding the intricacies of the importation process is crucial. In this article, we walk you through each step in the process, from determining import eligibility to securing permits and facilitating customs clearance.
REGISTER FOR AN IMPORTER NUMBER
To import goods to Canada, you must obtain a Business Number (BN) from the Canada Revenue Agency (CRA) if you do not already have one. This BN serves as your Importer Number and is used for customs purposes. You will need the Business Number to create an import/export account which can be done free of charge. Business numbers can be obtained from the Canada Revenue Agency over the phone at 1-800-959-5525 or online by clicking on this link. If you have trouble obtaining a business number, you can contact your accountant or business lawyer for help.
RESEARCH THE GOODS YOU WISH TO IMPORT AND DETERMINE IMPORT ELIGIBILITY:
You should conduct thorough research on your intended imported product, including their composition, origin, and production methods. This information is crucial for determining both the tariff classification (which we talk further about below) and import eligibility. The tariff classification dictates the applicable duty rate, while import eligibility assesses whether the product can be legally imported into Canada. Consider factors like the product’s origin, nature, and potential restrictions or prohibitions. Some products, like food, pharmaceuticals, and firearms, have strict import requirements and may require permits or approvals from government authorities. Additionally, Canada has sanctions on certain countries, affecting the import eligibility of their products. Some items, such as controlled substances or endangered species, may be outright prohibited. Consulting with an experienced lawyer or customs broker can be invaluable in assessing the import eligibility of your products for the Canadian market.
DETERMINE THE TARIFF CLASSIFICATION NUMBER AND TARIFF TREATMENT OF THE GOODS YOU ARE IMPORTING
Many trading countries including Canada utilize the Harmonized System (HS) as an international standardized system for classifying products. Canada is a member of the World Customs Organization which is responsible for determining the classification of goods in the Harmonized System. The Canada Border Agency has an online tool that allows you to search for HS codes based on keywords, products, and descriptions. You can access this product by clicking here. Once you have determined the classification of your goods, you must then determine the tariff treatment applicable to the goods being imported. The Canada Border Service Agency provides information about the duty rates and other regulatory requirements associated with each HS code. It is at this stage that you must determine whether your goods qualify for preferential trade agreements that Canada has with other countries such as the Canada-United States-Mexico Agreement (CUSMA formerly NAFTA). The CBSA has a portal that will assist importers with determining the tariff treatment and applicable trade agreements for your goods. We highly recommend you utilize this tool in determining the tariff treatment of the goods being imported.
VALUE YOUR GOOD FOR DETERMINING THE RATE OF DUTY
Generally, the value of your goods is the amount you paid for them. You should have supporting documents including invoices, purchase orders and copies of payment instruments to substantiate your claim for the value. The value is determined in Canadian dollars. Transactions conducted between related parties may be scrutinized to ensure the value of the goods reflects fair market value.
DETERMINING WHETHER GST, EXCISE TAX OR EXCISE DUTY APPLY TO THE IMPORTED GOODS
While certain goods such as pharmaceuticals, agriculture and fishing goods are not taxable, GST (the federal portion of HST) is generally applicable to most imports. Certain products are subject to excise tax including fuel-inefficient vehicles, vehicle air conditioners and some petroleum products. The Canada Revenue Agency can answer questions related to taxes due on imported goods.
RELEASE OF GOODS AND FINAL PICK UP
Upon arrival in Canada, imported goods are typically directed to a CBSA-controlled facility or designated port of entry. At this point, submitted documents undergo a review while the goods themselves may be inspected to ensure compliance with customs regulations. Taxation, duties, and applicable fees are assessed based on the information declared and the results of the inspection. Once all payments have been made and the CBSA has confirmed compliance, a formal release notification is issued to the importer, notifying them to coordinate the retrieval of the imported goods.
- Estimate taxes, duties and fees prior to importing the goods;
- Consult a lawyer and accountant as necessary;
- Consider using the services of a licensed customs broker – for a list of customs brokers put together by the Canada Border Service Agency, click here;
- Maintain thorough records of all import transactions including invoice payments and record of correspondence with the CBSA.
We hope that the above article helps you navigate the importation process in Canada. If you have further questions about the process, you may schedule a consultation with us by clicking here or contacting us.
This article is intended solely for general informational purposes and does not constitute legal advice. The information provided here is not a substitute for professional legal counsel. Importation and trade regulations, as well as legal requirements, can be complex and subject to change. It is strongly recommended that individuals and businesses seeking specific guidance on legal matters related to importing goods into Canada consult with an experienced lawyer or qualified legal professional. Only through personalized consultation can one receive advice tailored to their unique circumstances and ensure compliance with the latest legal regulations and requirements.
About the Author:
Shahriar Jahanshahi is the founder and principal lawyer at Jahanshahi Law Firm with a practice focus on representing business star-ups and investors in the province of Ontario. For further information about Shahriar Jahanshahi, click here.