The Import Process

How To Import Into Canada

Your how to guide on importing into Canada

Importing into Canada has many aspects to consider such as cost and requirements.

Understanding the process and what you can and cannot do on your own will help you in your trade endeavors.

We can help.

Parties Involved:

  • Canada Border Services Agency (CBSA)
  • Participating Government Agencies (PGA)
  • Customs Broker
  • Carrier
  • Warehouse

Import Fundamentals:

  • The Non-Resident Importer (NRI) program is a great opportunity for you to act as the Importer of Record (IOR) as a non-resident of Canada. This allows you to act as the importer when selling your products on Canadian ecommerce websites like Amazon.ca and Ebay.ca.
  • Duty and tax must be paid upon importation into Canada for all goods valued at $20.00 and greater. If your goods are valued at less than $20.00, they can be imported into Canada under the De Minimis rule without paying duty or tax. Learn more about this rule in our blog Attn Online Shoppers, A De Minimis Increase Means More Duty-Free Importing.
  • Certain import documentation is required to be presented to the border services officer at the port of entry.
  • Your import may be subject to a customs review, inspection, or audit prior to, at the time, or after the importation. Additional fees may be imposed by the Government of Canada for these services.
  • The rate of duty is determined by the tariff of the commodity being imported, the value of the goods and the origin of the goods.
  • You are required to keep your import records for six years following the date of import and can be audited by Customs at any point during this time.

FAQ: Canada Imports

What Is A Customs Broker?
A Customs Broker helps companies and individuals import goods into Canada in a variety of ways. Much like a lawyer represents a client in a court of law, a Customs Broker works with Customs and all Participating Government Agencies on your behalf, the Importer of Record. The rules that these government agencies have in place are complex and change often. An experienced Customs Broker stays on top of the rules, and assures you all the work they conduct on your behalf with the government agencies are in accordance with Customs Law.

What Does A Customs Broker Do?
The initial service offering of a Customs Broker was to file an entry declaration on behalf of its clients. Now, you have the opportunity to:
  • Register for an Importer business account and GST number
  • Determine your rate of duty
  • Calculate your goods’ valuation for Customs purposes
  • Determine your H.S. tariff classification
  • Obtain a ruling from Customs
  • Determine duty saving opportunities with Free Trade Agreements and preferential tariff treatments
  • Establish direct payment of GST with the Canada Border Services Agency
  • Advise of all import requirements with Participating Government Agencies
  • Advise carriers Pacific Customs Brokers is now acting on your behalf
  • Connect you to resources for packaging, labeling, tax, freight and more
And many, many more areas to help you import efficiently, compliantly and at the lowest cost.
Do I Need A Customs Broker To Import My Goods Into Canada?

The assistance of a Customs Broker may be mandatory depending on what you are importing. For example, if you are importing a vehicle into Canada from the U.S., a Customs Broker is the only party who can file an Automated Export Declaration to the U.S. Census Bureau on your behalf (a necessary requirement) if you are Canadian. All other aspects of import can be completed by the Importer.

Working with a Customs Broker benefits importers in the following ways:

  • Eliminates the need for the importer to arrive at the border with their goods and declare them to customs
  • Alleviates the importer from having to declare the goods - especially beneficial for anyone who imports regularly
  • Assists with your record keeping requirements with Customs by maintaining copies
  • Ensures that any changes in regulatory processes such as a tariff classification shift is reflected in your import declaration(s).
  • Provides confidence that compliance regulations will be followed when certified to work on your behalf. Becoming a certified Customs Broker is a certification which mandates a continuous improvement of process knowledge and regulations with required maintenance courses.

Importing into Canada is a privilege that can be revoked based on the importer’s level of compliance. If you work with a knowledgeable party you are more likely to avoid monetary penalties, delays at the border and revocation of your import privileges. This allows you to focus on what is important to you, keeping your business thriving.

Want to learn more about Customs Compliance?
Check out our blog post 7 Reasons To Invest In Customs Compliance
How Much Does A Customs Broker Charge?

Each Customs Broker has its own set of service rates.

If you import with Pacific Customs Brokers our rates depend on the specifics of your import.

The price you pay is determined by the:

  • Value of your shipment
  • Complexity of the import
  • Level of expertise required
Are There Any Import Restrictions In Place That Would Prevent Me From Importing My Goods?

Yes, there could be restrictions in place that would prevent you from importing your goods. Every commodity imported into Canada is regulated by Canada Border Services Agency and possibly a Participating Government Agency (PGA) that specializes in that commodity. For example, if you want to import cheese, both the Canada Border Services Agency and Canadian Food Inspection Agency would review your import declaration to determine their release decision. They may also inspect the product’s specific details that are required to be include in your import declaration. For the cheese example, this would be your cheese import license. Without the license you cannot import cheese. These are some of the elements that are used to make the release decision as to whether the cheese will be allowed into Canada.

Very few commodities are banned from entering Canada. Some are related to protected animal species, invasive pest risk or prohibited weapons.

Ensure that you understand what data is required for your specific commodity, what documents and interfaces that data needs to be reported in and the timeframes for reporting in order to provide Customs and PGAs the data they need to make their release decision.

Check out our infographic on What Does My Commodity Need For Import?
How Do I Calculate Duty?

Here is how you calculate duty rate payable to Customs:

    Value of goods (CAD)
x   Duty rate associated with tariff classification (commodity specific)
-   Any preferential tariff treatments
=  Duty payable to Customs

To determine your rate of duty, you will need to analyze three things:

  • Of the six methods of valuation available, which one you will use to determine your value of goods
  • What tariff classification is to be used for your commodity and the associated duty rate
  • If any free trade agreements or preferential tariff treatments can be used to eliminate or reduce this duty rate

If you need help with any of these three topics an experienced Trade Advisor can help you.

How Do I Value My Goods For Customs Purposes?
How Do I Determine My Tariff Classification?

You determine your tariff classification by seeking help or referencing the tariff book yourself. Since an H.S. Tariff Classification code is required on your import declaration to identify the goods being imported, it is important that you know the tariff code for each of your commodities.

Tariff classification is seemingly easy but in reality can be quite difficult depending on the commodity. Many new importers think it is as easy as looking up their commodity and using the corresponding duty rate. However, without using the explanatory notes from each chapter, importers could assign an incorrect tariff, and therefore, use an incorrect rate of duty whether it be underpaying or overpaying duty.

Using the expertise of a Trade Advisor To Determine Your Tariff or Taking A Course on how to assign one is beneficial for you to stay compliant with Customs.

What Shipment Documentation Do I Need To Send To Customs?

When importing goods into Canada, there are specific forms that are required by Canada Border Services Agency (CBSA) when presenting the entry information. These forms are intended to provide all necessary information to various Canadian Government Agencies and Departments. The forms are as follows:

Canada Customs Invoice (CCI)
Every shipment needs to be accompanied by an invoice that has specific data elements about the goods. This invoice is provided to the Customs Broker, so they can pull the information off of the invoice to make the declaration to Customs. Your carrier will make an eManifest to present to Customs at the first port of entry.

At a minimum, goods not regulated by a Participating Government Agency need to include the information listed in this guide.

For goods regulated by any of the Participating Government Agencies, the information listed in the guide linked above is required along with additional data elements specifically for the PGA.

Read this blog post to determine what PGA specific information your commodity may need

Confirmation of Sale (COS)
This form is used for fresh produce and contains all the same fields as a CCI with a few additions.

North American Free Trade Agreement Certificate of Origin (NAFTA Certificate)
This certificate can be completed for each shipment or once each year. Eligible goods that meet the NAFTA rules of origin are documented on the Certificate of Origin and receive a reduced or eliminated rate of duty. For further information on this topic, contact one of our client service representatives or visit the Learning Center for your opportunity to learn more.

Low Value NAFTA Certificate
This declaration can be used on shipments where the total value does not exceed $2500 CAD.

Exporter's Statement of Origin
Accepted by CBSA to replace Form A Certificates. Form A Certificates require stamps and signatures from the appropriate signing authority of the exporting country's government and can be costly to obtain. Your supplier can complete an Exporter’s Statement of Origin without going through the red tape of a Form A and it entitles your goods to the same General Preferential rate of duty.

Free Trade Agreements (FTA)
Canada has signed many free trade agreements, most require a country specific form to be completed. Contact a client services representative for more information.

Import Declaration Form
Most processed fruits and vegetables, dairy products, honey products, seeds and animal feeds require an Import Declaration Form to be completed. The Canadian Food Inspection Agency uses the information collected from this form to administer the Agriculture Canada Regulations.

Transport Canada Form 1 And Form 2
Completion of a Vehicle Import Form - Form 1 is required for the import of all new and used vehicles. After importation the Registrar of Imported Vehicles (RIV) fees are paid. Subsequently, RIV will issue a Form 2 to advise inspection and modification requirements.

In order to complete the safety inspection for a vehicle less than 15 years old, an importer will require a stamped Form 1, recall clearance documentation, and the Form 2. Vehicles greater than 15 years old, require only a stamped Form 1 to have their safety inspection completed.

Softwood Lumber Permit Application Form
The Softwood Lumber Agreement between Canada and the U.S. requires Canada to limit the quantity of softwood lumber it exports to the U.S. This is done through allocation of regional quotas and by issuance of permits to control quantities.

What Entry Type Can I Use To Clear My Goods?

There are various methods for entering goods into Canadian territory. Methods can be selected based on the ultimate destination of the goods, and the purpose of bringing the goods into Canada. An Importer may be able to delay the payment of taxes, duties and other government fees, or avoid unnecessary payment of fees because the goods are intended to be re-exported.

Consumption Entry
The most common entry to account for duty and tax collected on goods imported into Canada under normal circumstances. When prepared by your customs broker, the goods will normally have already cleared customs by another method such as:

  • Release on Minimum Documentation (RMD)
  • Pre-Arrival Review System (PARS)

Temporary Entry
This method of entry is used when goods are not sold to a buyer in Canada but rather are being loaned, rented, leased or are shipping to Canada for display or exhibition purposes. There are a few different types of entries within this temporary entry category, which include:

  • E29B Temporary Admission Bond
  • Carnet
  • 1/60th Entry

Note: All goods entered on a temporary entry must exit the country within the prescribed time frames.

Warehouse Entry
Using a Customs bonded warehouse allows you to store the goods in Canada prior to import and defer the payment of all duties and taxes until the goods enter the marketplace.

Provisional Entry
Is your project so big you don't know what the final value of the imports will be? This type of entry allows for interim accounting, with final accounting being done at the end of the project. Prior approval is required from CBSA for this type of entry. Contact a client services representative to get details on how you can get a provisional entry.

Value Included Or Entered To Arrive Shipments
Used for goods entering that are short shipped from a prior import or to accommodate goods covered by one import that could not be shipped in one conveyance.

What Is Customs Compliance?

Due to recent world events, international trade has been subject to a host of threats and hazards such as natural disasters, accidents, or even malicious attacks. The growing risks and complexities of global trade have caused governments around the world to place stronger emphasis on cross-border security.

While new regulations and a focus on security has helped create a safer trade environment, it has also resulted in tighter processing times, increased audits, compliance activity, and greater costs to importing goods.

In recent years, the Canada Border Services Agency and U.S. Customs and Border Protection have shifted much of their emphasis from import inspections to post audit verification's. The responsibilities put upon Importers of Record has steadily increased as all members of the supply chain endure higher scrutiny from customs officials. Now more than ever it is imperative that the Importer of Record maintain a high level of sophistication, demonstrate due diligence, ensure their responsibilities are understood, implement internal sets of controls and procedures for best practices as well as understand the consequences of non-compliance.

The consequences of failing to comply with customs regulations include:

  • Monetary penalties issued by Customs Agencies
  • Increased scrutiny and frequency of examinations on future shipments
  • Delays of incoming shipments
  • Inadvertent overpayment of duties and government fees
  • Total revocation of import privileges

The current regulatory environment demands active participation by every member of the international trade community. The laws governing cross-border trade continue to become increasingly complex, and this requires ongoing, continuous improvement in voluntary compliance through awareness and education.

How Can I Practice Compliant Importing?

  • Compliance Driven Process: Manage the risks of importing and improving efficiencies in your processes with an emphasis on a thorough understanding of regulations.
  • Self Auditing Program: Canada Border Services Agency has clearly identified that importers have the responsibility of knowing and understanding import regulations and their obligation to file corrections to declarations of origin, tariff classification and value for duty. Importers are expected to use reasonable care and due diligence to achieve compliance with import regulations.

    For example, short shipments require an importer to file a correction with CBSA. Are you contacting your customs broker to file the amendment? Develop a solid program of controls, procedures, best practices, self-auditing and ways of reviewing your systems with the goal to promote compliance and ensure prompt correction of any shortcomings, in addition to identifying potential risk factors.

Customs auditors will likely be interested in auditing the following:

  • Record Keeping
  • Purchase Orders
  • Sales Invoices
  • Receiving Reports
  • Record Of Payment Receipts
  • Permits
What Are AMPS Penalties?

On October 7, 2002, the Canada Border Services Agency implemented the Administrative Monetary Penalty System (AMPS) to enforce compliance with legislative, regulatory, and other program requirements and promote a level playing field for all clients.

This program gives the CBSA the authority to issue penalties to:

  • Importers
  • Carriers
  • Bonded
  • Warehouses
  • Duty Free Stores
  • Customs Brokers

If the above service providers fail to comply with any Customs regulations. AMPS penalties for the most part, take the place of seizures and ascertained forfeitures.

If a company is found in non-compliance with a regulation or declaration, CBSA will document the contravention and issue a Notice of Penalty Assessment (NPA). The NPA will have a unique sequential identifier number assigned, a penalty amount, and a contravention number that outlines the reason for the penalty.

CBSA keeps the AMPS Client Contravention History on file for a period of three years. AMPS penalties can range from NIL to $25,000 per infraction. NPAs can sometimes exceed $25,000 if multiple contraventions are identified.

Examples of AMPS Penalties

  • Failing to keep electronic records in a electronically readable format for the prescribed period.
  • Failing to report imported goods at a prescribed time and manner at the nearest open customs office that is designated for that purpose.
  • Failing to truthfully answer questions asked by an officer with respect to goods.
  • Transporting or causing goods to be transported within Canada that have not been released without complying to prescribed conditions or giving prescribed security.
  • Failing to provide to customs, according to the legislative timeframes, any export permit, licence or certificate required.

Failure to pay NPA(s) can result in a suspension of importing privileges and collection action taken by the Assessment and Collections Branch.

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