Over $52.4 billion worth of freight was moved to and from Canada in 20141. When shipping cross-border, it’s important to know what to expect and to be prepared. Familiarizing yourself with the process will also allow you to make more realistic delivery predictions. Whether you are shipping to the United States to Canada or from Canada to the United States, the first few steps are the same.
A Simplified Explanation of the Process:
1. The first step is to determine your business number is issued by the Canada Revenue Agency (CRA).
2. It’s also important to determine what you’re shipping and find out as much information on your shipment as possible. This can help determine the type of tariff classification the items falls into and other documentation that may be required.
3. Next you should determine if you’re going to use a customs broker. A customs broker handles release of goods and duties, takes care of necessary documents, and maintains records while responding to the Canada Border Service Agents (CSBA).
4. Keep in mind that whether you use a broker or not, you are responsible for accounting documentation and the payment of tax and duties. You should also check to see if your goods are subject to any permits, restrictions, or regulations. The CBSA and other government agencies have requirements that need to be met when shipping certain items and the CBSA is responsible to see that all those requirements are met.
Shipping Goods from Canada to the United States:
5. Determine the tariff classification number and the applicable tariff treatment for your goods. From this information you’ll be able to determine the rate of duty. This can be done by visiting the Customs Tariff Schedule.
6. See if your goods are subject to the Goods and Service Tax (GST), excise tax, or excise duty. Most goods pay a GST of about 5% at the time of importation.
7. Determine value of duty and estimate duty and tax amounts. This is usually the amount paid to the vendor for the goods. You should have proof of the amount that contains a description of goods, selling price and terms of sale.
8. Ship your order and report goods to the CBSA.
9. Obtain your released goods. There are two ways to obtain your goods. One way is to complete and present paperwork and pay for your duties and taxes. The other way is to release the goods prior to payment of duties. There is an application process for this option and needs to be approved by the CBSA.
Shipping Goods from the United States to Canada
5. Determine if your goods need to be declared on the Export Declaration. If you are exempt from the Export Declaration then the carrier must indicate “no declaration required” (NDR) with an explanation and code on the documentation. If it is required then you need to determine the appropriate export code which can be either the Canadian Export Classification Number or the Tariff Classification Number.
6. Determine the method of shipping and the expected time frame. Goods need to be reported at the designated export office. The location of this office can be found on your export permit.
7. Submit an Export Declaration if needed. This can be submitted through the Canadian Automated Export Declaration (CAED), G7 Electronic Export Declaration Process, Summary Reporting or the B13A Export Declaration.
8. Present proof of export if needed.
9. Ship goods and provide a Certificate of Origin to the receiver of the goods if it’s requested.
It’s important that if you are shipping cross-border that you understand the requirements. Each country may treat the same product differently. Staying prepared and informed will save time and money. View the full shipping infographic here and for more information on shipping cross border visit the Canada Border Services Agency.