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How to Import into Canada
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Before you jump into our guide, are you ready to start importing goods and want to get started with us? Book a meeting with one of our GHY Import Experts to get started today on importing your good(s) today.
This guide will walk you through step-by-step on how to clear customs, how to calculate Canadian duties and taxes, and how to find a Canadian customs broker.
Importing into the Canada in 5 Steps
Whether you have purchased your goods or are looking at calculating landed cost, here is how you get ready to import into Canada. You will want to partner with a customs broker who can make it easy while keeping up with constant changes in trade regulations and has the tools to enable importers to self serve. Get started by using our Calculate Your Duties and Taxes tool (coming soon).
Personal Shipments
Personal shipments are run against an individual which attracts a higher tax rate. Personal importers will typically pay a higher sales tax at the provincial rates (5-13%), rather than the government sales tax (5%). We breakdown all of the applicable taxes in our Calculate Your Duties and Taxes tool (coming soon).
Commercial Shipments
Commercial transactions require importers to have importer activation by Customs in conjunction with the Canada Revenue Agency who issues your business number. If you are a Canadian resident business you already have a business number and we will activate your importer extension. If you are a Non-Resident Importer, this is a nine digit number that is issued by the Canadian Revenue Agency is your key to commercial imports. Your customs broker, will activate your importer account which is an extension following your business number ending in RT0001. Your importer number will look like this for example: 123456789RM0001.
Commercial transactions typically attract 5% Government Sales Tax (GST) however there are some exemptions. There are programs to get your 5% GST payment back, we outline them in our blog How to Easily Manage Government Sales Tax.
Obtain Your Business Number
After you have obtained a business number, import-export account, and chosen the right broker, the next step is to calculate the Canadian Customs Duty you will owe on the goods to plan to import. Canada uses Harmonized System (HS) codes, a 6-digit standardized method of classifying goods traded internationally, to determine import duties. In addition to the 6-digit international classification, Canada uses 4 additional digits to establish duty rates, a 2-digit tariff item, and a 2-digit statistical suffix. Every importer has the right to classify its own imports but the use of a broker helps to ensure that your goods are classified correctly the first time.
Once the correct tariff classification is established, the next step is to determine if the goods being imported are subject to any trade agreement (such as USMCA/CUSMA) or special tariff provisions. The requirements of these agreements and provisions vary by country of origin and composition of materials. In addition to meeting all of the requirements of the individual trade agreement or tariff treatment, proof of origin may be required at the time of import.
You’ve decided on your import channel and understand your duty and tax obligations. Now it’s time to set up with a customs broker, purchase your goods and arrange your shipping.
Foreign suppliers often use International Commercial Terms, more commonly referred to as incoterms, to establish the responsibilities of the buyer and seller in the purchase and who will be responsible for items such as shipping and insurance.
Common incoterms used are Freight on Board (FOB), ExWorks (EXW), and Cost, Insurance, Freight (CIF). In all of these cases, it is the importer’s responsibility to arrange Canadian Customs Clearance and domestic freight. In addition, ocean/air freight, insurance, as well as other costs & arrangements may be required to be completed by the importer.
There is no right answer to the best terms for you or the seller. What’s important is that you understand what parts of the process you are responsible for and when you take ownership of the goods. This ensures that goods are not left accruing fees.
Your goods are nearly to Canada and it’s time to clear customs and pay your duties and taxes. Your customs broker is ready to step in to complete all of the necessary forms and documents to get your goods released.
To make sure that this process goes smoothly, it is important that any additional information requested by your broker is provided quickly. This may include items such as origin of goods documentation, commercial invoices, bill of lading, and shippers export declaration. If you have questions about the documents you need, ask your broker. They are there to assist you and can help answer all of your questions.
Confidently Import into Canada
Importing into Canada can seem overwhelming. Moreover, understanding all the rules and regulations of importing can be a time-consuming endeavour and failing to do so can be costly. By taking the time to prepare, following these 5-easy steps, and partnering with the right Canadian customs broker like GHY, you can be confident that your goods will arrive without unexpected costs or delays.
Schedule a meeting with our team to discuss how we can help you!
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