Canada is one of the world’s leading economies. Which, is why you definitely need a Canada Import Guide.
According to the International Monetary Fund, Canada had the world’s 10th largest Gross Domestic Product (GDP) in 2017.
The country’s major exports include raw materials (such as wooden logs), minerals, food (grains, cattle, fish), oil and gas.
In order to produce these exports, Canada relies on importing machinery, vehicles and parts, crude oil, chemicals, electrical equipment, and durable consumer goods.
Canada also imports finished consumer goods like garments, toys, electronics, computers, furniture and furnishings, hand-crafted goods and hundreds of other products.
A lot more goes on behind the scenes than one might envisage to get these materials into Canada, and delivered to your business.
If you’re planning on starting a business in Canada, or if you’re the owner of a new business here, chances are you may not know a whole lot about the process of importing materials.
But not to worry, we’re here to help you out. Here’s everything you need to know about Importing to Canada.
Business Number
The first thing you’re going to need to import goods to Canada is a Business Number for an import/export account.
This number is used for major government revenue programs such as HST/GST (Goods and Services Tax), payroll deductions and corporate income tax.
Canada Border Services Agency (CBSA) will use this number to process customs documents.
To avoid delays in releasing your goods at the border, open your import/export account with Canada Revenue Agency before you try to import goods.
Licenses and Permits
No license is required to import most goods into Canada.
However, you should also make sure they can legally be imported into Canada.
It’s also very important to note that some imports are considered ‘controlled products’. This means they are subject to a quantitative import restriction or quota, and require a permit for importation into Canada.
Some of these controlled products include certain agricultural products, ammunition, endangered wildlife and certain metals.
This guide to importing from the CBSA gives details on how to find out if the goods you want to import are prohibited or restricted.
Duty and Tax
When importing to Canada, it’s important that you calculate how much duty and tax you’ll need to pay.
To do this, you need to know:
- The tariff classification
- Rates of duty
- Tax payable when importing goods
A ‘tariff classification’ is a ten-digit number used to determine the rate of duty payable when importing. You can find both it and the ‘rate of duty’ by consulting the Customs Tariff.
‘Tax payable when importing goods’ refers to Goods and Services Tax (GST), excise tax and excise duty. These may or may not apply to the goods you’re importing.
For imported goods, you only pay the federal GST, even if you reside in a province that charges Harmonized Sales Tax (HST). It’s also worth noting that no GST is charged on imported goods that are ‘zero-rated’ in Canada, like medical devices and prescription drugs.
This guide from the CBSA gives details on all of these and an example of how to calculate duties and taxes.
Customs Broker
This is a totally optional step, but is is recommended for small businesses.
Customs brokers obtain and prepare the customs release documents needed by the CBSA and arrange the payment of customs duties and taxes.
They also obtain the release of imported goods, meaning overall they are a massive help to newcomers to importing who are still trying to wrap their head around the process and documentation involved in imports.
Choosing Your Exporter
Once you know which products you want to import, the next step is to consider which country you will import them from. Duties can range from 0% to 35% depending on your choice of source country. This directly impacts the profitability of the imported product.
The country of origin of your goods determines the trade agreement under which they qualify, and the tariff treatment they will receive.
For Customs purposes, the “country of origin” is the country in which the goods are grown, manufactured or produced. In the case of a manufactured article, the country of origin is where the item was substantially transformed into its present form.
Besides shipping the goods, the exporter is responsible for getting the documentation together for sending the goods to Canada:
- Packing List – Describes the goods in detail.
- Bill of Lading – Sets out the contract for the goods’ transport.
- Commercial Invoice – The document from which you pay the exporter.
- Canada Customs Invoice – Declares goods to Customs when importing to Canada.
- Certificates of Origin – Verifies where various materials and parts originated. Necessary for goods eligible for favorable tariff treatment under particular trade agreements.
It’s important to find the right supplier to ensure you get quality goods, at a competitive price, and the ability to have them delivered when you want them.
Check out this guide on managing foreign suppliers for some key tips and insights.
Choosing A Carrier
The carrier of your goods is responsible for preparing a Cargo Control Document, also known as a manifest or waybill.
Cargo may also be reported through the Electronic Data Interchange (EDI) system.
If the value of your shipment is less than $1600 CAD, you will be notified by Canada Post or by the courier company that has forwarded the shipment when your shipment arrives. If the value of your shipment is over $1600 CAN, you may be notified by the CBSA, who may choose to inspect your shipment.
Obtaining Your Goods
You have two options when getting your goods released.
You can either present a full accounting and pay all duties, or get your goods released prior to the payment of duties.
Presenting a full accounting means having all the necessary paperwork in good order. The B3-3 Canada Customs Coding Form is the main document you need to fill out. You will also need:
- Two copies of the Cargo Control Document (CCD), which will be provided by your carrier.
- Two copies of the Canada Customs Invoice (or the commercial invoice that contains the data).
- A paper copy of all import permits, certificates, licenses, or required documents from other government departments and agencies or an electronic copy for EDI participants with other government departments.
If you wish to get your goods released prior to the payment of duties, see the CBSA’s Memorandum D17-1-5: Section 2 – Release.
What is the Best Way to pay for Imports To Canada?
Now that you know how to import goods to Canada, it’s important you also know the best to pay for them.
Sending money internationally can be expensive, thanks to the high fees and unfair exchange rates that are charged by banks in your exporter’s country.
Wire transfers also take days, if not weeks, to be processed and can involve physically going to a bank and filling out forms, especially for large payments.
Here at REMITR, we eradicate all of these problems.
Our service allows you to send money to over 150 countries worldwide within 1 business, for as little as $5!
REMITR has unique benefits which no other service provides:
- Pay for imports in CAD without the fear of losing out on CAD to USD or CAD to EURO conversion
- Pay in USD if you already have USD available
- You can ask your supplier for an invoice in their local currency. When you choose to pay them in their local currency, you save even more on currency exchange.
- When your supplier receives payment in their local currency they do not have to pay ANY bank fees or receiving fees for inward remittances.
Whether you are paying for your imports in CAD, or paying your supplier in their local currency, REMITR uses the best live Foreign Exchange rate so you always get the best exchange rate regardless of banking hours.
Our 24/7 service means that banking hours and time zones no longer act as a border between you and doing business internationally.
Time is money – save them both by signing up with REMITR today.
