Update: CBSA Seeking Comments on Budget 2021 Proposed Valuation Changes

Commenting on Valuation Changes

Trade Update • JUNE 10, 2021

A s reported last April, the Trudeau government in its Budget 2021 announced new measures “to improve duty and tax collection, by ensuring that goods are valued in a fair and consistent manner by all importers as a means to level the playing field between domestic and non-resident/foreign businesses.”

More specifically, the government intends to close a loophole that currently enables some non-resident importers (NRIs) to value their goods at a lower price than most Canadian importers by using a “previous foreign sale price.” In this regard, the budget legislation includes an amendment to subsection 45(1) of the Customs Act, which introduces a definition of the term “sold for export to Canada”, and allows its meaning to be assigned by the regulations.

The Canada Border Services Agency has summarized the elements being considered in connection with potential future regulatory amendments as follows:

Measures Under Consideration

1. Define the scope of “sold for export to Canada” to specify the relevant transaction for export which forms the basis of the transaction value of the goods.
This proposal would ensure that the value for duty of imported goods determined under the transaction value method is based on the sale that causes the goods to be exported to Canada, i.e. the last transaction in the commercial chain, irrespective of the chronological order of the sales. Under the proposal, the term “sale” would be constructed in a broad sense, which would include any type of arrangements that cause the goods to be exported to Canada.

2. Clarify the definition of “purchaser in Canada”, as well as the associated definitions of “resident” and “permanent establishment”, and ensure the relevant sale for export forms the basis of the transaction value of the goods.
The intent of these proposals is to remove any ambiguity on how to qualify as a permanent establishment. To qualify, the person would need to:

  • be the purchaser of the goods imported to Canada
  • have a fixed place of business in Canada, through which the goods are purchased, and
  • have the authority to enter into the arrangement/sale (the permanent establishment could not, under this proposal, be a conduit in the sale)

A NRI, who does not have a permanent establishment, would only qualify as a purchaser in Canada if the goods were imported:

  • for their own use, or
  • on speculation of future sales (meaning the sale of the goods to a person in Canada was not arranged in any way before the goods arrived in Canada).


Comments should be submitted via e-mail to CBSA’s Trade Policy Division, Trade and Anti-dumping Programs Directorate prior to July 4, 2021.

Need More Information?

CBSA has outlined a number of examples that illustrate the relevant sale for export to Canada to a purchaser in Canada (i.e. last sale, including any type of arrangement) for determining the transaction value under section 48 of the Customs Act where the goods are subject to more than one sale prior to the importation of the goods into Canada (a series of sales).

Should you have any questions about the proposed change and how it may affect the valuation of your imports in the future, don’t hesitate to contact one of our knowledgeable trade experts.

Sign Up for Trade Updates

Get weekly or daily insights into all things trade, delivered right to your inbox.

* indicates required