Clearit.ca's Blog on Customs Brokerage and News Updates
It goes without saying: balancing the books is one of the key pillars of keeping your importing business afloat. The unfortunate aspect here is that, as an importer, you are at the whim of changes in regulations (which CBSA reserves the right to enforce with little notice).
Elements of your shipment of goods like: the classification, the country of origin, the documentation — or lack thereof, will all have a significant impact on what comes out of pocket in duties and fees at customs.
Fear not! Partnering with a customs broker will help put your mind at ease. It’s their job to stay up to date on regulatory changes, ensure you have all the correct documentation, and can help you predict how much you will pay in duties based on what kind of goods you’re moving and the volume of it.
After all, bringing goods into Canada is not necessarily the most exciting part of having a business. It’s wise to pass on those kinds of admin/logistics duties off to a professional partner (customs broker) so you can get back to focusing on your core business.
“The success combination is: do what you do better & do more of what you do.” – David Joseph Schwartz
All things considered, you are here to predict how much you will be paying in customs duties for your goods!
Without further ado, we’ve broken down the various fees and exemptions that may apply to your shipments. Customs duty rates are regulated by the Canada Customs Act and are enforced by CBSA.
Identifying the category of your shipment and estimating the fees to be paid upon its arrival can be pretty complicated. In most cases, it’s ideal to work with a broker to help advise you through the process. Many regulations may be applicable, so it’s important to approach with care.
For example, if your goods are made in the US or Mexico and are attached to a NAFTA certificate, no duty will need to be paid. But most goods are subject to the Federal Goods & Services Tax (GST) and Provincial Sales Tax (PST).
Read our recent blog post: Changes to NAFTA Are Coming. What Effect Will It Have?
Duty rates for popular imported goods:
Cooking ware 0-8%
Computers and related devices 0%
Furniture items 0-9.5%
Automobile parts 0-8%
Goods & Services Tax (GST)
GST is the only tax that is completely unavoidable for shipments entering Canada. It is a 5% tax imposed on everything sold within Canada. There are only a few, very limited exemptions like milk, bread, veggies, medication, and medical devices.
Harmonized tax refers to harmonizing the applicable provincial tax with the 5% GST. These are very province specific, so be careful. Examples of harmonized tax rates include: Saskatechewan is 5%, Quebec is 9.975%, Ontario is 8%.
Check out our piece: Resident and Non-Resident Importers: Making Sense of Canadian Duty and Tax.
All things considered, there is a handful of things that would impact the customs duty rates. Are your goods being imported into Canada for commercial use? Which province is their final destination and have you considered that province’s regulations?
When importing commercial goods and estimating the fees you’ll be required to pay, do not overlook hidden fees or just assume you’ll be exempted. Exchange rate, correct documentation prep, handling fees are examples of costs that can seemingly pop up out of nowhere. In fact, those are just a few of the examples. Without the necessary expertise, your importing business may be faced with a financial burden that is unexpected.
In most cases, it makes more sense to employ the help of a customs broker, so they can help guide you through the process, and take the heavy workload of getting everything in order off your hands. To get the conversation with a broker started, you can click here.