For many U.S. companies selling goods into Canada, the biggest risk to a successful transaction is not tariffs. The real hurdle is logistics and compliance at the border.
In many cases, products qualify for duty-free treatment under the United States-Mexico-Canada Agreement (USMCA). However, even when no duty applies, most commercial shipments entering Canada remain subject to the five percent Goods and Services Tax (GST) at the time of import.
This raises a strategic question for exporters: Should the U.S. seller act as a Non-Resident Importer (NRI) and control the Canadian import process, or should the Canadian buyer act as the Importer of Record? With Canada’s CBSA Assessment and Revenue Management (CARM) system now fully implemented, your chosen logistics strategy heavily dictates both the ease of doing business and the overall success of the sale.
Even when goods qualify for duty-free entry under a Canadian free trade agreement (CUSMA, CETA, CPTPP, CUKTCA) the core import requirements still apply. Exporters must account for customs clearance procedures, GST payable at import, brokerage fees, transportation costs, and compliance requirements related to classification, valuation, and origin.
Because Federal and Provincial sales tax paid at import can be recovered by a registered business through input tax credits, the real issue is not the tax itself. The issue is deciding who manages the import process and who carries the compliance responsibility.
Under the Non-Resident Importer model, the U.S. seller takes full responsibility for the Canadian importation process. This involves registering for a Canadian tax account, obtaining a Business Number (BN#) import account, registering in the CARM system, posting financial security bond with Canadian customs, and paying duty (if not CUSMA) and sales tax. As mentioned above, GST (General Sale Tax) is often recoverable.
There are four major advantages to utilizing the NRI model for your cross-border sales:
Essentially, you can sell to Canadian customers by acting as a Canadian company. Localize your offer and remove the barrier of having your customers deal with import issues.
Transitioning from individual parcel shipping to a bulk distribution model can radically improve access. Here is the step-by-step process of using Jet Worldwide as your Canadian logistics partner:
Expert Insight: This model is especially effective for exporters to Canada who would like to sell to Canada but lacks sales volume to ship regular consolidations.
Acting as a Non-Resident Importer does introduce additional responsibilities. You will face exposure to Canadian customs audits, ongoing tax filings, renewing surety bonds, meeting requirements under CARM, and administrative oversight of import documentation. However, because taxes paid at import are recoverable, the financial impact is generally a matter of timing rather than a permanent cost.
The alternative is for the Canadian customer to handle the importation themselves. In this scenario, the U.S. exporter sells under shipping terms such as FCA, FOB, or EXW. The Canadian buyer officially becomes responsible for customs clearance.
This structure keeps the transaction incredibly simple for the U.S. seller. You face no Canadian tax registration requirements, no CARM obligations, no customs audit exposure, and minimal administrative burdens. For exporters that ship to Canada infrequently, this approach is highly appealing.
While administratively easier for the exporter, this approach can introduce heavy complications for the buyer. The Canadian customer must arrange their own customs broker, ensure proper CARM registration, post financial security with customs authorities, pay taxes at the time of import, and manage potential customs reviews. For companies that do not regularly import goods, these requirements can create immense hesitation or delay the sale entirely.
The best approach often depends on your broader business strategy. If the shipment is a one-time transaction and the Canadian buyer is a highly experienced importer, allowing the buyer to handle importation makes sense.
However, if the exporter is building long-term business relationships in Canada, controlling the import process through the Non-Resident Importer model creates a significantly smoother, more predictable experience for customers.
Canada’s CARM framework has centralized customs accounting and security requirements, placing much greater responsibility on importers to manage compliance properly. For Canadian companies unfamiliar with these procedures, the administrative burden is severe.
Exporters who remove that complexity often gain a massive competitive advantage by offering a seamless purchasing process.
Many successful exporters find growth by providing flexibility. A smart approach might sound like this: "We can deliver the goods directly into Canada and handle all customs requirements, or you may import directly using your own broker if preferred." Providing the choice reassures the customer while allowing you to maintain a streamlined sales funnel.
With many goods being able to enter Canada duty-free under CUSMA, CETA, CPTPP, CUKTCA or other Canadian Free Trade agreements, the primary challenge to Canada is usually not tariffs. The opportunity is managing the logistics framework that govern importation so your customers do not have to.
Deciding whether the exporter or the customer should act as the importer is a procedural decision. Giving your customer a choice is a vital strategic advantage to international businesses seeking access to Canada.