How to Import Goods into Canada: A Guide for Businesses
If you are a business owner who wants to import goods into Canada, you need to follow certain steps and comply with various regulations. Importing goods into Canada can be a great way to expand your market, diversify your products, and reduce your costs. However, it can also be a complex and challenging process that requires careful planning and preparation. Here are some tips on how to import goods into Canada successfully.
1. Obtain a Business Number and an import/export account
Before you can import goods into Canada, you need to register with the Canada Revenue Agency (CRA) and obtain a Business Number (BN). A BN is a unique identifier that allows you to interact with the federal government on various tax and trade matters. You also need to add an import/export account to your BN, which will allow you to report and pay duties and taxes on your imported goods. You can obtain a BN and an import/export account online, by phone, or by mail. For more information, visit the CRA website.
2. Identify the goods you want to import and their tariff classification
You should have a clear idea of what goods you want to import and their specifications, such as description, composition, origin, value, and quantity. You should also determine the tariff classification of your goods, which is a 10-digit code that identifies the type of goods and the applicable duty rate. You can find the tariff classification of your goods in the Canadian Customs Tariff, which is based on the Harmonized System (HS) of the World Customs Organization. You can also use the online tool Advance Rulings for Tariff Classification to request a binding ruling from the Canada Border Services Agency (CBSA) on the tariff classification of your goods.
3. Determine if you need any permits, licenses, or certificates
Some goods are subject to import controls or restrictions by other government departments or agencies. For example, you may need a permit, license, or certificate to import food, plants, animals, firearms, vehicles, or hazardous products. You should check the Other Government Department Reference List to find out if your goods are regulated by any other authority and what requirements you need to meet. You should also check if your goods are prohibited or restricted from entering Canada under any law or regulation.
4. Find out the duties and taxes you have to pay
When you import goods into Canada, you have to pay duties and taxes on them. Duties are calculated based on the tariff classification, origin, and value of your goods. Taxes are calculated based on the value of your goods plus the duties. The taxes may include the Goods and Services Tax (GST), the Harmonized Sales Tax (HST), or the Provincial Sales Tax (PST), depending on the province where you import your goods. You can use the online tool Duty and Taxes Estimator to get an estimate of how much duties and taxes you have to pay for your imported goods.
5. Choose a customs broker or handle customs clearance yourself
You have two options when it comes to clearing your goods through customs: you can hire a licensed customs broker or you can do it yourself. A customs broker is a professional who can act as your agent and handle all the paperwork and procedures involved in importing goods into Canada. A customs broker can also advise you on various aspects of importing, such as tariff classification, valuation, origin, permits, duty relief programs, and more. However, hiring a customs broker comes at a cost and you are still ultimately responsible for the accuracy and completeness of your import documents and payments. If you decide to handle customs clearance yourself, you need to prepare all the required documents and submit them electronically or in person to the CBSA at the port of entry where your goods arrive. You also need to pay all the duties and taxes owing on your imported goods.
6. Ship your goods and report them to the CBSA
You need to arrange for the transportation of your goods from the foreign country to Canada. You can use various modes of transportation, such as air, sea, rail, or road. You should choose a mode that suits your budget, timeline, and type of goods. You should also ensure that your goods are properly packed, labeled, insured, and secured during transit. You need to report your imported goods to the CBSA when they arrive in Canada or before they arrive in some cases. You can report your goods electronically using one of the CBSA’s Electronic Data Interchange (EDI) systems or in person using a paper form called an Import Declaration.
7. Get your goods released by the CBSA
After you report your imported goods to the CBSA, they will be either released or examined by a CBSA officer. Most goods are released without examination based on the information provided in your import documents. However, some goods may be selected for examination for various reasons, such as verification of tariff classification, origin, valuation, permits, or compliance with other regulations. If your goods are examined, you may have to pay additional fees or charges and your goods may be delayed. You will receive a document called a Cargo Control Document (CCD) when your goods are released by the CBSA. The CCD is a proof of release that shows the date, time, and location of the release of your goods.
8. Keep records of your import transactions
You are required to keep all records related to your import transactions for six years after the end of the year in which the importation occurred. These records include invoices, receipts, contracts, permits, certificates, accounting documents, and any other documents that support the information you provided to the CBSA. You should keep these records in Canada in either paper or electronic format. The CBSA may request to see these records at any time to verify the accuracy and completeness of your import declarations and payments.
9. Review your import performance and make adjustments if needed
You should monitor and evaluate your import performance on a regular basis to ensure that you are importing goods into Canada efficiently and effectively. You should check if you are paying the correct amount of duties and taxes, if you are using the most appropriate tariff classification and valuation methods, if you are taking advantage of any duty relief programs or trade agreements, if you are complying with all import regulations and requirements, and if you are meeting your customers’ expectations and needs. You should also look for ways to improve your import process and reduce your costs, such as sourcing from different suppliers, negotiating better prices or terms, choosing different modes of transportation, or using different customs brokers or service providers.
Importing Goods into Canada: Trends and Challenges
Canada is one of the world’s largest trading nations, importing goods from various countries to meet its domestic needs and support its economic growth. However, importing goods into Canada is not without challenges, especially in the context of the COVID-19 pandemic and global trade tensions. In this blog post, we will examine some of the trends and challenges of importing goods into Canada, based on the latest statistics and data available.
Canada’s Imports in 2020: A Year of Decline and Recovery
According to Statistics Canada, the value of Canada’s annual merchandise imports fell 8.5% in 2020 to $561 billion, the lowest level since 2017. This was mainly due to the impact of the COVID-19 pandemic, which caused a sharp drop in imports of goods and services in the spring of 2020, as lockdowns and border closures disrupted global trade flows and reduced domestic demand.
However, imports recovered quickly in the second half of 2020, as industries reopened and consumer spending shifted from services to goods. By October 2020, import levels had surpassed the pre-pandemic levels in February 2020. Some of the main categories of imports that increased in 2020 were electrical machinery and equipment, pharmaceutical products, furniture and bedding, toys and games, and plastic products.
The main sources of Canada’s imports in 2020 were the United States (35.6%), China (7.5%), Mexico (5.2%), Germany (5.1%), and Japan (4%). These five countries accounted for almost 60% of Canada’s total imports in 2020. The United States remained Canada’s largest trading partner, despite a decline in its share of imports from 44.8% in 2019 to 35.6% in 2020. China increased its share of imports from 6.9% in 2019 to 7.5% in 2020, becoming Canada’s second-largest source of imports.
Canada’s Imports in 2021: A Year of Growth and Uncertainty
According to Statista, the value of imports of goods to Canada is projected to increase by 3.7% in 2021 to $581.67 billion, as the global economy recovers from the pandemic and trade activity resumes. However, this projection is subject to uncertainty, as the COVID-19 situation remains volatile and new variants pose a risk of further disruptions. Moreover, Canada faces some challenges in importing goods from certain countries, due to geopolitical tensions, trade disputes, supply chain bottlenecks, and environmental concerns.
For example, Canada has been involved in a diplomatic dispute with China since 2018, when Canada arrested Huawei executive Meng Wanzhou at the request of the United States. China retaliated by detaining two Canadian citizens and imposing trade restrictions on some Canadian products, such as canola, pork, and beef. Although some of these restrictions have been lifted or eased since then, the bilateral relations remain strained and unpredictable.
Another challenge for Canada is the implementation of the new United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) in July 2020. The USMCA introduces some changes to the rules of origin, labor standards, environmental provisions, dispute settlement mechanisms, and intellectual property rights that affect trade among the three countries. For instance, under the USMCA, automobiles must have at least 75% of their components manufactured in North America to qualify for duty-free treatment, up from 62.5% under NAFTA. This may require some adjustments for Canadian auto manufacturers and suppliers who rely on imported parts from other countries.
A third challenge for Canada is the increasing pressure to reduce its greenhouse gas emissions and transition to a low-carbon economy. This may affect Canada’s imports of fossil fuels, such as crude oil and natural gas, which accounted for about 10% of Canada’s total imports in 2020. Canada may have to diversify its energy sources and increase its imports of renewable energy technologies, such as solar panels, wind turbines, batteries, and electric vehicles.
Importing goods into Canada is an essential part of Canada’s economy and society, providing access to a variety of products and services that enhance the quality of life and well-being of Canadians. However, importing goods into Canada also entails some challenges and risks that require careful management and adaptation. As the world continues to cope with the COVID-19 pandemic and navigate the changing landscape of global trade, Canada will have to balance its interests and values with its obligations and opportunities in importing goods from different countries.
References:
https://www.statista.com/statistics/263636/import-of-goods-into-canada/
http://www.cbsa-asfc.gc.ca/
http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html#s5x4
http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html#s5x1
https://www.cdnbeefcheckoff.ca/about-us/
https://www.dhs.gov/sites/default/files/publications/TSA%20FY18%20Budget.pdf
http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/instruments-and-tools/tools/safe-package/safe-framework-of-standards.pdf?la=en
https://doi.org/10.26886%2F2524-101X.5.2018.2
http://www.wcoomd.org/en/Topics/Facilitation/Instrument%20and%20Tools/Conventions/pf_revised_kyoto_conv/Kyoto_New
Essential Topics You Should Be Familiar With:
