When your business imports a product to Canada, or when you export products to another country from Canada, two main laws would apply – the Customs Act and the Customs Tariff (both referred here as customs laws). The difference between the two laws is that the Customs Act establishes the authority in enforcing the collection of duties and taxes upon government agencies tasked with such responsibilities; while the Customs Tariff imposes the specific duties and taxes to be collected.
As to the specific Canadian government agency governing Canadian laws on customs and tariff, it would be the Canada Border Services Agency (the CBSA). This Agency promulgates numerous regulations for the implementation of the provisions under the Customs Act and the Customs Tariff law.
Different Types of Goods for Export and Import
These Canadian customs laws and regulations provide that there are two classifications of products which may be exported from Canada to other countries:
- Prohibited
- Restricted
- Non-Restricted.
These classifications have different applicable Canadian regulations, and it’s also highly recommended to check your products’ destination country’s importation laws. Although importation laws may be generally different among different countries, it’s likely easier for countries where Canada has an existing trade treaty or convention with.
(1) Prohibited Consumer Goods or Products
A “prohibited” status on goods or products means that these cannot be exported from Canada and/or to be imported to other countries. As such, these products may be returned to its sender, or worse, could be destroyed by the government of the accepting country.
In Canada, examples of prohibited products to be imported are firearms, and certain animals and plant species as determined by the Canadian Food Inspection Agency (CFIA), Fisheries and Oceans Canada (DFO), among other agencies.
(2) Restricted Consumer Goods or Products
A “restricted” status on goods or products to other countries means that there are other needed licenses or certificates, aside from customs tax and duties, for these goods or products to be accepted by the importing country. In addition to the country destination’s customs department, other needed licenses or certificates may also be required by a separate department.
For example, when exporting restricted goods or products to the USA, its appropriate agency may require additional licenses or permits. For animals and animal products, it would be the U.S. Department of Agriculture, and for food and beverage products, the U.S. Food and Drug Administration may require additional documentations.
(3) Non-Restricted Commercial Goods or Products
A commercial good or product is “non-restricted” when its exportation is not controlled, regulated, or prohibited under the Canadian customs law. Most of the time, classifications of non-restricted products are common to all countries. In Canada, non-restricted goods may include:
- commercial goods having a value of less than C$2,000
- household products for private consumption
- goods exported by diplomatic embassy or mission personnel for their personal or official use
- personal gifts
- donations of non-restricted goods
How to Import to Canada or to Export from Canada
Canadian customs laws and CBSA regulations can be read into two main categories:
- Importing Goods into Canada;
- Exporting Goods from Canada.
Documentations needed would then depend on various considerations, which may also differ whether you are exporting or importing commercial goods. In-depth explanations of the procedures of importation and exportation may be consulted with a Canadian customs lawyer.
[1] Importing Goods into Canada
When importing commercial goods into Canada, you may either personally transact with the CBSA for the release of the goods; or through a licensed customs broker who will transact with the CBSA on your behalf, do the accounting for the goods and payment of all duties (Section 32, Customs Act).
As with any other importation requirement of other countries, Canadian customs law may also require additional documentations of other government agencies or departments, aside from those required by the CBSA, depending on the nature of the goods. This is also in addition to the provincial or territorial customs law and common law principles which may be applicable.
Payment of taxes and duties may also depend on the country of origin, and the nature of the imported product. Whenever necessary or when it’s being amended, the CBSA releases customs notices to guide businesses or persons engaged in importation to Canada.
One of which is the Customs Tariff document which shows tariff treatments (commonly known as Most-Favoured-Nation Tariff or MFN) and Applicable Preferential Tariffs – the former refers to reduced tariff from countries which Canada has tariff arrangements; the latter refers to reduced tariff from countries which Canada has a free trade agreement. Some goods may also be subject to excise tax under the Canadian Excise Tax Act, such as tobacco and some alcohol products.
Importers: When you register to the CARM Client Portal you can:
— Canada Border Services Agency (@CanBorder) June 14, 2023
- View you financial transactions
- Make payments
- Submit appeals and rulings requests.
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[2] Exporting Goods from Canada
Documentations for exporting commercial or consumer goods from Canada would depend on whether it’s restricted or non-restricted, because generally prohibited goods should not be exported.
For restricted goods, the appropriate permit, certificate, licence, or any other applicable authorization both by the CBSA and the country of destination are generally required. In addition, an export declaration is also required when exporting to countries, except for the United States of America where it is not required, or when it is a non-restricted goods valued at less than C$2,000. Thus, it is greatly important to know the customs law of the country of destination where your business is exporting to since export requirements may vary from country to country.
In addition, the method of shipping would also matter since it would determine when an export declaration and any other permit, certificate, or licence must be submitted to the CBSA. For air, rail, and mail, it must be submitted not less than 2 hours before the goods are loaded onto the aircraft, railcar, or delivered to the post office, respectively. For marine, the reports must be submitted to the CBSA not less than 48 hours before the goods are loaded onto the ship or vessel. If through the highway, it must be submitted immediately to the CBSA before the exportation of the goods.
Want to consult with a legal counsel for any concerns regarding taxes and other duties regarding customs? Talk with the best commodity tax and customs lawyers in Canada or comment your questions down below.