How to Clear Customs in Canada: A Guide for Importers
Are you planning to import goods into Canada? If so, you need to know how to clear customs in Canada and what are the requirements, fees and processes involved. In this article, we will explain the basics of customs clearance in Canada and provide some tips to make it easier and faster.
What is Customs Clearance?
Customs clearance is the process of verifying that the goods you are importing comply with the Canadian laws and regulations, and that you pay the appropriate duties and taxes. Customs clearance is done by the Canada Border Services Agency (CBSA), which is responsible for enforcing more than 100 acts and regulations that keep our country and Canadians safe.
Why is Customs Clearance Important?
Customs clearance is important for several reasons. First, it ensures that the goods you are importing are legal, safe and meet the Canadian standards. Second, it helps protect the Canadian economy and environment from unfair competition, dumping, smuggling and other illegal activities. Third, it contributes to the government revenue by collecting duties and taxes on imported goods.
How to Clear Customs in Canada: A Step-by-Step Guide
To clear customs in Canada, you need to follow these steps:
- Obtain a Business Number (BN) from the Canada Revenue Agency (CRA). A BN is a unique identifier that you need to import or export commercial goods in Canada. You can register for a BN online or by phone for free.
- Identify the goods you want to import and determine their tariff classification number. The tariff classification number is a 10-digit code that indicates the type of goods, their origin and their duty rate. You can find the tariff classification number using the Customs Tariff or by contacting a customs broker or a CBSA officer.
- Determine if you need any permits, certificates or licenses to import your goods. Some goods are subject to restrictions or regulations by other government departments or agencies, such as food, animals, plants, firearms, drugs, etc. You need to obtain the necessary documents before importing these goods.
- Determine the value of your goods for customs purposes. The value of your goods is used to calculate the duties and taxes that you have to pay. The value of your goods is usually based on the transaction value, which is the price paid or payable for the goods, plus any adjustments such as freight, insurance, commissions, etc.
- Choose a mode of transportation and a port of entry for your goods. You can import your goods by air, sea, land or rail. You need to choose a port of entry that is suitable for your mode of transportation and that can handle your type of goods. You can find a list of ports of entry on the CBSA website.
- Prepare and submit your customs documents. You need to prepare and submit two main documents: an invoice and a cargo control document (CCD). The invoice contains information about the seller, the buyer, the goods, the value, the currency, etc. The CCD contains information about the shipment, such as the mode of transportation, the carrier, the port of origin, the port of destination, etc. You can submit your documents electronically using the Integrated Import Declaration (IID) system or by paper using Form B3.
- Pay your duties and taxes. Once your documents are accepted by CBSA, you will receive a notice of assessment that shows how much you have to pay in duties and taxes. You can pay online using My Payment or by other methods such as cheque, money order or credit card.
- Receive your goods and keep your records. After you pay your duties and taxes, CBSA will release your goods and send them to your address or to a warehouse if you requested one. You need to keep your customs documents and receipts for six years in case of an audit or a dispute.
Tips to Make Customs Clearance Easier and Faster
Here are some tips to make customs clearance easier and faster:
Use a licensed customs broker to help you with customs clearance. A customs broker is a professional who can prepare and submit your customs documents, communicate with CBSA on your behalf, advise you on import regulations and requirements, and handle any issues that may arise during customs clearance.
Plan ahead and gather all the information and documents you need before importing your goods. This will help you avoid delays, errors and penalties.
Use Advance Declaration in ArriveCAN to submit your customs declaration before flying into Canada. This will save you time at the border and allow you to use expedited lanes if available.
Register for CARM Client Portal if you are an importer, a customs broker or a trade consultant. CARM Client Portal is an online platform that allows you to access CBSA services such as applying for rulings, managing your account balance, making payments and more.
The Demand for Customs Clearance Services in Canada
Canada is one of the world’s largest trading nations, with a total merchandise trade value of over $1 trillion in 2020. The country imports and exports a wide range of goods, from natural resources and agricultural products to manufactured goods and services. To facilitate the movement of goods across the border, Canada relies on the services of customs brokers and agents who handle the customs clearance process.
Customs clearance is the process of ensuring that imported or exported goods comply with the laws and regulations of the destination country, as well as paying any applicable duties and taxes. Customs clearance can be complex and time-consuming, depending on the type and value of the goods, the origin and destination countries, and the specific requirements of each shipment. Customs brokers and agents are experts in this field, who can help importers and exporters navigate the customs procedures and avoid delays, penalties, or seizures.
The demand for customs clearance services in Canada has been influenced by several factors, such as:
- The growth of e-commerce and online shopping, which has increased the volume and variety of goods shipped across borders, especially from countries like China and the United States.
- The implementation of new trade agreements, such as the Canada-United States-Mexico Agreement (CUSMA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which have created new opportunities and challenges for trade between Canada and its partners.
- The impact of the COVID-19 pandemic, which has disrupted global supply chains, affected consumer demand, and imposed new health and safety measures at the border.
- The advancement of technology, which has enabled faster and more efficient communication, data transmission, and automation of customs processes.
The Future of Customs Clearance Services in Canada
According to a report by IBISWorld, the customs brokers industry in Canada is expected to grow at an annualized rate of 2.4% from 2021 to 2026, reaching a revenue of $1.6 billion. The industry is projected to benefit from the recovery of trade activity after the pandemic, as well as the continued expansion of e-commerce and online retailing. However, the industry also faces some challenges, such as:
- The increasing competition from online platforms and software that offer self-service or automated customs clearance solutions for importers and exporters.
- The rising costs of compliance and security, as customs authorities impose stricter rules and standards to prevent fraud, smuggling, or terrorism.
- The uncertainty and volatility of trade relations, as political and economic factors affect the trade policies and tariffs of Canada’s major trading partners.
To succeed in this dynamic and competitive environment, customs brokers and agents will need to adapt to the changing needs and expectations of their clients, as well as leverage technology to improve their efficiency, accuracy, and customer service.
References:
https://www.dhs.gov/sites/default/files/publications/TSA%20FY18%20Budget.pdf
http://www.wcoomd.org/en/Topics/Facilitation/Instrument%20and%20Tools/Conventions/pf_revised_kyoto_conv/Kyoto_New
https://clearit.ca/canadian-customs-broker-blog/customs-clearance-canada/
http://custombroker.com/en/serving-you-canada-customs-clearance.php
https://www.ibisworld.com/canada/market-research-reports/customs-brokers-industry/
http://custombroker.com/en/serving-you-canada-customs-clearance.php
Essential Topics You Should Be Familiar With:
