How to Import from USA to Canada: A Complete Guide for Businesses
Are you a Canadian business owner who wants to import goods from the USA? If so, you might be wondering how to do it legally, efficiently and cost-effectively. In this article, we will explain the steps and requirements for importing from the USA to Canada, as well as some tips and best practices to make the process easier.
Importing from the USA to Canada is not as simple as buying something online and having it shipped to your address. There are many rules and regulations that you need to follow, depending on the type of goods you are importing, their value, their origin and their destination. Here are some of the main aspects that you need to consider before importing from the USA to Canada:
1. Determine the tariff classification of your goods
This is a 10-digit code that identifies the type and category of your goods, and determines the duty rate and taxes that you will have to pay. You can find the tariff classification of your goods using the Canadian Customs Tariff or the Harmonized System Database.
2. Determine the origin of your goods
This is important because some goods may qualify for preferential tariff treatment under the Canada-United States-Mexico Agreement (CUSMA), which replaced the North American Free Trade Agreement (NAFTA) in 2020. To claim CUSMA benefits, you need to have a valid certificate of origin or a statement of origin from the exporter or producer of your goods.
3. Determine the value of your goods
This is the price that you paid or will pay for your goods, plus any other costs related to their transportation, such as freight, insurance, packing, etc. You need to declare the value of your goods in Canadian dollars, using the exchange rate on the date of direct shipment or on the date of accounting, whichever is more favourable for you.
4. Determine the applicable duty rate and taxes
Depending on the tariff classification, origin and value of your goods, you may have to pay duty, Goods and Services Tax (GST), Provincial Sales Tax (PST), Harmonized Sales Tax (HST) or other fees when importing from the USA to Canada. You can use the Canada Border Services Agency (CBSA) Duty and Taxes Estimator to get an estimate of how much you will have to pay.
5. Obtain an import/export account number
This is a 15-digit number that identifies you as an importer or exporter in Canada. You need this number to report and pay your duty and taxes, as well as to access other CBSA services. You can register for an import/export account number online or by phone.
6. Choose a mode of transportation and a customs broker
You can import your goods from the USA to Canada by air, sea, rail or road. Each mode has its own advantages and disadvantages in terms of cost, speed and reliability. You also need to decide whether you want to handle the customs clearance process yourself or hire a customs broker to do it for you. A customs broker is a licensed professional who can act as your representative and deal with all the paperwork and formalities involved in importing from the USA to Canada.
7. Prepare and submit the required documents
Depending on the type and value of your goods, you may need to provide various documents when importing from the USA to Canada, such as commercial invoice, bill of lading, certificate of origin, import permit, etc. You need to submit these documents electronically through the Single Window Initiative (SWI) or by paper through a CBSA office.
8. Pay your duty and taxes and release your goods
Once your goods arrive at the Canadian border, you need to pay any duty and taxes that apply, either online or at a CBSA office. You also need to present your documents and proof of payment to a CBSA officer, who will inspect your goods and release them if everything is in order.
Importing from the USA to Canada can be a complex and time-consuming process, but it can also be a rewarding one if you do it right. By following these steps and requirements, you can ensure that your imports are legal, compliant and hassle-free.
The Trade Relationship Between Canada and the US
Canada and the United States share a long and prosperous history of trade and investment. The two countries are each other’s largest trading partners, with bilateral merchandise trade reaching US$726.73 billion in 2022, according to the United Nations COMTRADE database . Canada is also the largest foreign supplier of energy to the US, providing oil, natural gas, electricity and uranium .
The trade relationship between Canada and the US is governed by several agreements, such as the Canada-United States-Mexico Agreement (CUSMA), which replaced the North American Free Trade Agreement (NAFTA) in 2020. The CUSMA aims to modernize and strengthen the trade ties between the three countries, while preserving the benefits of the previous agreement . The CUSMA covers areas such as market access, rules of origin, labor and environmental standards, intellectual property rights, digital trade and dispute settlement.
The Impact of COVID-19 on Canada-US Trade
The COVID-19 pandemic has had a significant impact on the global economy and trade, including between Canada and the US. The border restrictions imposed by both countries since March 2020 have affected the movement of people and goods, especially in sectors such as tourism, transportation and manufacturing . The pandemic has also disrupted global supply chains and caused volatility in commodity prices and exchange rates.
According to Statistics Canada, Canada’s merchandise exports to the US declined by 14.8% in 2020, while imports from the US decreased by 12.6%. The trade surplus with the US narrowed from C$18.4 billion in 2019 to C$10.8 billion in 2020 . The most affected products were motor vehicles and parts, crude oil, aircraft and parts, natural gas and refined petroleum products.
However, some sectors showed resilience or growth amid the pandemic, such as agriculture and food products, medical equipment and supplies, personal protective equipment (PPE) and other essential goods. For example, Canada’s exports of wheat to the US increased by 36.4% in 2020, while imports of ventilators from the US surged by 1,084.6% .
The Outlook for Canada-US Trade
Despite the challenges posed by COVID-19, Canada and the US remain committed to enhancing their trade and investment relationship. Both countries have pledged to work together on issues such as climate change, clean energy, innovation, health security and economic recovery . The two countries have also agreed to cooperate on addressing unfair trade practices, ensuring resilient supply chains and supporting small and medium-sized enterprises (SMEs) .
The outlook for Canada-US trade depends largely on the evolution of the pandemic and the effectiveness of the vaccination campaigns in both countries. According to the International Monetary Fund (IMF), Canada’s real GDP is expected to grow by 4.4% in 2021, while the US’s real GDP is projected to expand by 5.1%. The IMF also forecasts that world trade volume will increase by 8.1% in 2021 .
As the world’s largest integrated market, Canada and the US have a strong potential to recover from the pandemic and pursue new opportunities for trade and investment. By working together, both countries can foster a more sustainable, inclusive and resilient future for their citizens.
References:
http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html#s5x4
https://tradingeconomics.com/canada/imports/united-states
https://www.statcan.gc.ca/en/subjects-start/international_trade
https://ustr.gov/countries-regions/americas/canada
https://www.international.gc.ca/trade-commerce/consultations/cusma-aceum/index.aspx?lang=eng
https://pm.gc.ca/en/news/readouts/2021/02/23/prime-minister-justin-trudeau-speaks-president-joe-biden
https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/23/roadmap-for-a-renewed-u-s-canada-partnership/
https://www.imf.org/en/Publications/WEO/Issues/2021/01/26/2021-world-economic-outlook-update
https://www.tradecommissioner.gc.ca/canadexport/0003470.aspx?lang=eng
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