Canadian Customs Brokerage: Your Guide for Imports into Canada

Canadian customs brokerage services are the lifeline that so many importers use when shipping goods into the Great White North. Particularly if you’re a new importer, a customs broker by your side can make a world of difference. We’ll lend our experience as Licensed Customs Brokers to help in your endeavors. 

Key Takeaways:

• The Canada Border Services Agency (CBSA) licenses individuals who pass a customs knowledge test to act as licensed customs brokers.
• While importers aren’t required to work with a broker for basic import transactions, only CBSA-licensed brokers can execute certain tasks such as transmitting information through the CBSA Assessment and Revenue Management (CARM) system.
• Like imports to the US, many commodities are subject to import fees such as duties, tariffs, and processing charges when shipped into Canada.
• The Canada-United States-Mexico Agreement (CUSMA) reduces or eliminates duties on many commodities traded between the three member countries.

We’ll explain the importance of using a customs broker when importing into Canada, the brokerage fees you can expect, and all the benefits they can provide for clearing your shipment successfully. 

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What is a Customs Broker in Canada?

A customs broker in Canada is a licensed professional who acts as a liaison between importers and government authorities like the CBSA and other government departments (OGDs). They specialize in customs regulations, documentation, and procedures required for importing goods into the country.

Canadian customs brokers are skilled in preparing and submitting the necessary forms  for imports into Canada. 

These include important documents such as:

• Canadian Customs Coding Form B3
• CUSMA Certificate of Origin (if applicable)
• Invoices

They can also calculate and advise on the applicable tariffs, duties, and taxes for goods entering Canada. These are based on the internationally recognized Harmonized System (HS) classification and other relevant factors.

Do You Need a Customs Broker to Ship to Canada?

A customs broker is not legally required to import goods into Canada, however, it is highly recommended. The process of shipping goods across the border may seem straightforward, but the intricate maze of Canadian import regulations can quickly turn a seemingly simple process into a messy ordeal. 

While a broker isn’t required for routine importing, there are situations where they become a practical necessity if not a legal one. Much like the US, the Canadian government maintains broker-only electronic interfaces for the transmission of data directly to customs authorities, so partnering with a broker often becomes necessary to execute certain tasks in a timely and efficient manner.

This is where the expertise of a customs broker comes into play. Let's delve into why partnering with a customs broker is often essential when shipping north of the border.

1. Complexities of Canadian Import Regulations

Canadian import regulations are made up of many parts: tariffs, duties, taxes, trade agreements, and compliance requirements. Following these regulations requires a deep understanding of rules from CBSA and OGDs like Health Canada. 

Regulations vary based on factors like:

• The type and classification of goods
• Their country of origin
• Their intended use (commercial, research, display, etc)

An oversight in any of these areas can lead to costly consequences, including unexpected fees, delays, or even legal issues.

2. Benefits of Using a Customs Broker

Enter the Canadian customs broker, a seasoned guide of international trade. Here's how their expertise can make a world of difference:

• Regulatory Proficiency: Customs brokers are familiar with the ever-evolving landscape of import regulations. They’ll ensure your shipments meet all necessary criteria and that you don’t under or overpay customs charges. 
• Accurate Paperwork: Customs brokers are adept at preparing and submitting CBSA-required documents, preventing your shipment from getting caught in inspection holds. 
• Tariffs and Duty Optimization: These experts can advise you on accurate tariff classification, potentially reducing duty costs. 
• Efficiency: Expedite certain processes with customs brokers who know the system, so your goods reach their destination on time.

A reputable broker will keep in touch, so importers stay informed about the clearance and release status of their shipments. When goods are on a tight schedule, real-time updates on the status of a shipment make a difference. Each benefit plays a part in making sure importers can keep up a successful business.

3. Avoiding Costly Mistakes and Delays

The potential for mistakes is easily the number one reason that importers need a customs broker. One tiny error on a customs declaration can lead to major financial and legal complications. In Canada, these costly fines and punitive measures are enumerated in a Master Penalty Document, and are collected via the Administrative Monetary Penalty System (AMPS).

Customs brokers act as a safety net against mistakes that could result in fines or seizure of your goods. They understand the nuances of compliance and can protect you from unintentional breaches.

Delays can ripple through your supply chain. They negatively affect your operations and relationships with clients. The right broker can help avoid such pitfalls and streamline the import process.

Canadian Customs Brokerage Fees: Breaking Down the Costs

Understanding the landscape of customs brokerage fees is essential when importing into Canada. These fees include a variety of factors that contribute to the total cost of your imports, ultimately allowing for customs clearance. 

It’s worth taking a closer look at:

• The types of fees
• How fees are calculated
• Duties and tariffs

Let's break these down to show you how they influence customs clearance fees.

Types of Fees Involved

A customs broker’s fees can depend on the exact services they end up providing. In general, customs brokerage fees can be categorized into several key items. 

These include:

• Basic Entry Fee: This covers the processing and submission of necessary documents to the CBSA.
• Customs Duties and Tariffs: These are charges imposed by the government on certain imported goods, calculated based on their value and classification. 
• Goods and Services Tax (GST) or Harmonized Sales Tax (HST): A consumption tax applicable to most goods and services in Canada.
• Disbursement Fees: These are out-of-pocket expenses incurred by the broker on your behalf when handling things like taxes and duties paid to government agencies.

If you partner with a brokerage that also handles freight shipping, you can roll those freight shipping fees into your overall costs as well. The simplicity of recordkeeping and documentation that comes from working with a combination freight and customs brokerage makes the inherent complexities of importing easier to handle.

Whether importers end up being charged all or some of these fees depends on what services they need a customs broker to provide. 

CARM is being used to streamline and better facilitate trade into Canada. To learn more, check out our article, What is CARM?

How Canadian Customs Fees Are Calculated

Customs brokerage fees and import taxes are calculated based on factors like the type of goods being imported, their value, and the complexity of the shipment. 

The most common influencing factors are:

• Tariff Classifications: Each product’s unique Customs Tariff Schedule code determines the applicable duties and tariffs attached to imports.
• Goods Value: The declared value of your goods directly impacts the calculation of ad valorem duties and taxes within the classification system.
• Origin and Destination: The country of origin and the destination within Canada play a role in determining the customs regulations and fees due to provincial laws.
• Trade Agreements: Trade agreements and preferential tariff rates can impact the cost of importing goods from certain countries.
• Compliance Complexity: Complex shipments, such as those involving controlled substances or specialized goods, might require extra documentation and processing, leading to higher fees.

The process of confirming things like HS codes or tax status isn’t always straight-forward. When products are sourced from different materials, some of which may come from different nations, it can involve communicating with different agencies and paying partial tariffs on non-CUSMA goods.

The more complex a product is, the higher you can expect the fees to be. 

This is why the right customs broker is a great source for importers aiming to make informed decisions about their international trade endeavors.

Read up on NAFTA vs the USCMA to find out how different trade agreements impact costs.

Duties and Tariffs

Most Canadian imports face a 35% tariff, while imports of Canadian energy products and potash are 10%. That said, the CUSMA free trade agreement can still be used to import many goods from Canada duty-free. You simply need to prove that your imports meet the agreement’s rules of origin. 

The rules of origin are essentially the requirements your Canadian imports will have to meet to be eligible for duty free treatment. There are six of them in total. 

While CUSMA can still help you import numerous items duty free, this isn’t the case for certain commodities affected by Section 232 tariffs. For example, steel, aluminum, and copper are ineligible for preferential duty treatment for this reason.

In case you ever need to facilitate trade both ways, check out our article on costs to import from Canada to the U.S.

Getting Started with a Canadian Customs Broker: Consultation and Next Steps

At USA Customs Clearance, we handle more than just imports into the US. With experienced Canadian Customs Brokers on staff, we can handle your Canadian customs brokerage with ease.

Remember that a customs broker isn't just an option – they're your passport to a stress-free, guess-free import journey.

Schedule a personalized, 1-on-1 consultation with one of our licensed brokers or fill out a brokerage request quote to get access to our full suite of customs services. When you need to import into North America, we’re here to help. If you have more questions, give us a call at (855) 912-0406.