Cross-Border Guide: The Process of Importing Goods Into Canada

Importing goods into Canada is an option for small businesses, as well as large multinationals looking to expand their operations. In today's economy, the value of importing goods into Canada is that you can access a much larger market of consumers, and there are plenty of opportunities to get involved in this profitable industry.

However, in order to turn a profit, we must also consider how moving goods across borders can be a confusing and challenging process. When importing to Canada, there are specific government rules and regulations to abide by, in order for goods to enter the country safely and legally. When you import, it's not always easy to know all the rules that you need to follow, but there are some basic steps which can help when trying to import into Canada.

If you plan on importing goods into Canada, you will first need to obtain a business number for exporting/importing goods. You can file with the CRA (Canada Revenue Agency) for the number, and it is free as well as quick to get. Once you have a number you will want to compile as much understanding of the goods you plan to import, for both tariff and regulation purposes. You will primarily be dealing with Canada Border Services Agency (CBSA). Here are some of the basic steps in the import process:

Determine How You Will Deal With Customs Brokers

Shipments coming into Canada use a customs broker in order to help clear the shipment to cross into the country. Canada has specific regulations over what can and cannot be imported, so a broker would know which regulations need to be followed. Between legal regulations, duties/fees, and customs documents, it is a large task to try handling imports alone.  

Here are a few responsibilities a broker can take on for you:

• Informing you on the correct or necessary documents for the shipment
• Calculating and addressing any issues with payments or documents (including duties, taxes or fees)
• Maintaining record of your payments
• Submitting the paperwork and documents to customs
• Liaising with relevant agencies if your goods require special classification

Taxation on freight shipping can also be dependent on each province’s tax legislation, since Canada is divided into provinces, which is why a broker can help calculate or determine the fees paid on the shipment. For importers, knowing if your goods are subject to duties in accordance to the Special Import Measures Act (SIMA) is a task the broker can simplify. The broker also helps classify the goods you are shipping, using the correct tariff number. 

If you are trying to have more control over each part of the process, then using a platform like Zipments.io to create your customs invoices, also allows you to automatically generate tariff codes, so you are minimizing the risk of error. 

Know Your Goods In Detail 

You need to know the value, type, size, quantity details as well as the country of origin of the goods, and this includes where the product may have been grown or assembled, not just where it is shipped from, as part of the importing process. You can refer to the government of Canada customs tariff act and customs regulations for a detailed list of what your specific goods require. A country of origin has to be listed for specific types of goods, including:

• Sporting Goods
• Apparel 
• Hardware
• Goods used for personal or household use

Some goods have different rules as per the USMCA regulations, which means that a Certificate of Origin can ensure the goods are exempt from certain trade tariffs or taxes. Certain goods also require special classifications and releases from different government agencies involved, such as the Canadian Food Inspection Agency (CFIA) or Department of Health Canada, which are the Canadian equivalent of the FDA in the United States. 

Go Over the Required Documents 

Carriers are not the only ones subject to rules when it comes to crossing the border, as your goods also require specific documents. To import into Canada some other documents you will need are:

• Bill of Lading (BOL)
• Packing Slip
• Customs Invoice, or a CCI (Canada Commercial Invoice)

The invoice will contain the shipment value and necessary data to confirm the value of the freight and who is responsible for any fees or duties. The duties or fees which are determined are paid for by the receiver. Multiple copies of the invoice need to be present, one attached to the freight and one to the BOL. A customs broker can ensure that the documents are completely filled out and nothing is left out. Remember, the CBSA requires an ACI e-Manifest be submitted.  

Word of Advice: Always contact the broker before the shipment moves, because most often mistakes occur due to communication errors and freight getting shipped prior to talking to a broker.

Understand Timing

Canada is quite similar and close to the United States, but the country uses a different currency and also abides by different federal holidays. When shipping, you may need to account for potential delays around Canadian holidays, such as Thanksgiving Day in Canada occurring in early October. You want to ship in accordance to potential holiday delays. 

Take it Step By Step 

Cross-border freight has a complex journey unlike domestic freight, because there is border crossing involved. What essentially occurs is that initially a customs broker would contact the importer to confirm relevant data, confirm when the freight is scheduled to arrive, and assess for any potential import taxes or duties. The broker prepares freight for customs entry, gathering any relevant documents. This is also where any GST, duties or fees may be determined, as well as how much you may be required to pay upfront or after delivery.

From there, the broker sends paperwork to CBSA, and files the necessary information. The carrier will pick up and take the freight to the border, reporting at the port of entry, and once released, the shipment goes to the destination. You can use tracking to find out whether the freight has cleared to cross, before the driver even arrives at the border.

Lastly, you must keep your records of import for at least six years, and it can be in either electronic or paper form. If you plan on importing to Canada, you may also benefit from looking into trade incentive programs, which is CBSA’s attempt to offer businesses some relief from duties/taxes for specific goods. Look into the CBSA duty deferral program.

North American countries have strict regulations when it comes to imports, in order to ensure safety. However, knowing the basics of where to begin can save you both time and money.  Canada’s system of importing and exporting goods is similar to the United States but with a few key differences that can make it difficult for businesses to import or export their goods. Make sure to comply with the specific regulations set forth by the CBSA, and you should be good to go. The exciting and challenging business of importing is never going to go out of fashion, so knowing these basics can make a big difference for your business.