Understanding Duty and Importing into Canada
IMPORTING INTO CANADA – WHAT COUNTRIES HAVE REDUCED DUTY OR DUTY FREE?
When importing items into Canada, the number 1 questions we are asked is “is it duty free?”. People feel that this will make up the largest portion of their cost and want to know the best way to minimize it. The best way to minimize duty is to know which countries to import from. Canada has many trade agreements with a wide variety of countries that offer reduced or 0% duty on items that would otherwise incur duty.
List of Agreements:
All current agreements are made available on the Government of Canada website for international trade. Those agreements are summarized below with the corresponding abbreviation.
Agreement name
Abbreviation
Countries/blocs involved
Signed
Entered into force
Canada–United States Free Trade Agreement
FTA
United States
12 October 1987
1 January 1989
North American Free Trade Agreement
NAFTA
Mexico
United States
17 December 1992
1 January 1994[a]
Canada–Israel Free Trade Agreement
CIFTA
Israel
31 July 1996
1 January 1997
Canada–Chile Free Trade Agreement
CCFTA
Chile
5 December 1996
5 July 1997
Canada–Costa Rica Free Trade Agreement
CCRFTA
Costa Rica
23 April 2001
1 November 2002
Canada–European Free Trade Association Free Trade Agreement
CEFTA
Iceland
Liechtenstein
Norway
Switzerland
26 January 2008
1 July 2009
Canada–Peru Free Trade Agreement
CPFTA
Peru
29 May 2008
1 August 2009
Canada–Colombia Free Trade Agreement
Colombia
21 November 2008
15 August 2011[b]
Canada–Jordan Free Trade Agreement
Jordan
28 June 2009
1 October 2012
Canada–Panama Free Trade Agreement
Panama
14 May 2010
1 April 2013
Canada–Honduras Free Trade Agreement
Honduras
5 November 2013
1 October 2014
Canada–Korea Free Trade Agreement
CKFTA
South Korea
11 March 2014
1 January 2015
Canada–Ukraine Free Trade Agreement
CUFTA
Ukraine
11 July 2016
1 August 2017
Comprehensive Economic and Trade Agreement
CETA
European Union
30 October 2016
21 September 2017 (provisional)[9]
Comprehensive and Progressive Agreement for Trans-Pacific Partnership
CPTPP,
TPP-11
Australia
Brunei
Chile
Japan
Malaysia
Mexico
New Zealand
Peru
Singapore
Vietnam
8 March 2018
30 December 2018
Source: https://en.wikipedia.org/wiki/Free_trade_agreements_of_Canada
Checking your item:
Every item imported must be classified with an HS Code. This code can be looked up in the Government of Canada Customs Tariff book available here.
Once you have identified your item, it is just a matter of looking at the correct column to determine the duty rate for it.
Reading the Canada Customs Tariff book:
After you have your HS code for your item, you can use the book to lookup the appropriate rate of duty.
Glossary:
HS Code: The Harmonized Tariff code for your item. The first 6-digits are internationally standardized, while the remaining 4 digits are country specific.
MFN Tariff or MFN Duty rate: The basic duty rate for your item if the origin country does not have a preferential rate.
Preferential Tariffs or Preferential Duty rate: The special rate if the origin country has a Trade Agreement or qualifies for the Preferential rate.
Our expertise can help you not only to navigate the tariff and intricacies of the Tariff Book, but also do find the most appropriate code for your goods. Leveraging our experience, finding the correct code and the best possible duty rate can have a significant impact on your decision to import the good, and which country you are sourcing your items from. The ever evolving landscape of international trade can be difficult without sound advice, and that is where we can help.
Contact us today and we can help you navigate the process and set you up for success.