Build a compliant, cost-efficient Canadian import program. This guide reviews CARM registration, HS classification, valuation, duties and taxes, Incoterms, documentation, and importer models (Resident vs. NRI).
Last Updated: October 2025
Executive Summary: The Keys to Canadian Imports
To successfully import into Canada, businesses must master four core pillars:
- Compliance First: Ensure correct HS classification, declared valuation, and valid permits (CARM registration is mandatory).
- Cost Clarity: Calculate total landed costs, including Duty, GST/HST, and brokerage fees.
- Inco-term: Define who pays what (DDP vs. DAP) to avoid surprises at the border.
- Carrier Network: Utilize a mix of express courier, postal, airfreight, and ocean flows.
Resource: Download the Import Guide to Canada PDF
Getting Started: Your Pre-Shipment Checklist
Before moving your first pallet or parcel, complete these six steps to prevent border delays:
- Define the Importer: Will you use a Canadian entity or register as a Non-Resident Importer (NRI)?
- Register for CARM: Create your portal account, set roles, and delegate authority to your broker.
- Classify Products: Assign HS codes and verify admissibility (health standards, labeling, etc.).
- Select Incoterms: Choose DDP (for better customer experience) or DAP (for lower seller risk).
- Choose a Clearance Path: Low Value Shipment (LVS) program, independent broker, or self-clearance.
- Prepare Docs: Commercial invoice, packing list, and certificates of origin.
CARM and Importer Accounts
CARM (CBSA Assessment and Revenue Management) is the mandatory digital initiative for importing into Canada. It centralizes accounts, statements, and payments.
- Action Item: Create or claim your business account in the CARM Client Portal (CCP).
- Delegation: You must explicitly delegate access to your customs broker or carrier within the portal.
- Benefits: Pre-map SKUs and HS codes to streamline entries and reduce manual exceptions.
Learn more: Canada importer registration for CARM explained
HS Codes and Valuation
Your classification drives your duty rates. Your valuation determines the tax base. Getting these wrong leads to AMPS penalties.
- Description Quality: Descriptions must be plain English. Avoid internal codes. State what it is, what it is made of, and what it is used for.
- Valuation: The "Transaction Value" is standard, but be aware of additions like assists, royalties, or commissions.
- Currency: Always specify the currency of settlement on the commercial invoice (e.g., USD, CAD, EUR).
Resources: HS codes basics · Declared value and CIF valuation
Duties and Taxes in Canada
Unlike many other regions, Canada has a distinct separation between Duty and Sales Tax.
- Duty: Determined by HS code, Country of Origin, and Value. (Note: CUSMA/USMCA can eliminate duties for eligible North American goods).
- GST/PST/HST: Canada applies a Goods and Services Tax (5%) federally. Provinces may add PST or combine it into HST (up to 15%). Tax is calculated on (Value + Duty).
- Carrier Fees: Expect brokerage fees, disbursement fees (for fronting the tax), and handling charges.
Deep dive: Common Canadian import fees breakdown
Incoterms for Canadian Imports
Incoterms define the transfer of risk and cost. For Canadian imports, two terms dominate:
DDP (Delivered Duty Paid)
Best for: Customer Experience & NRIs.
The seller pays all duties and taxes. The Canadian buyer receives the package with no hidden fees at the door.
DAP (Delivered at Place)
Best for: Seller simplicity.
The buyer is responsible for duties and taxes. Carriers often charge the buyer a collection fee (COD) before releasing the goods.
Understanding Terms of Sales and Incoterms
De Minimis (Low-Value Shipments)
Canada allows for simplified clearance for low-value goods, but the threshold is complex compared to the USA.
- Duty Free: Generally applied to shipments valued under CAD 150 (if shipped by courier from specific regions).
- Tax Free: Generally only applied to shipments under CAD 40.
- Requirement: You must transmit complete data (SKU, HS, value, origin). Vague data will trigger a formal entry regardless of value.
Importer Models: Canadian Entity vs. NRI
Who acts as the Importer of Record (IOR)?
| Model | Pros | Cons |
|---|---|---|
| Canadian Entity | Full control over tax recovery (ITC). Traditional setup for warehousing. | Requires maintaining a physical local business presence. |
| Non-Resident Importer (NRI) | Sell DDP without a physical office. Seamless customer experience. | Requires a customs bond, CARM registration, and tax filing management. |
Understand customs value for NRI Shipments
Choosing Logistics Networks
- Postal Network: Best for C2C (consumer to consumer) and occasional low-value items.
- Express Courier: Fastest transit (1-3 days), integrated brokerage, predictable total cost.
- Airfreight: Cost-effective for consolidated pallets over 100kg.
- Ocean LCL/FCL: Lowest unit cost for heavy bulk. Requires 4-6 week lead times.
- Hybrid Direct Injection: Consolidate bulk freight into Canada, clear customs once, and inject into domestic last-mile networks.
Documentation Essentials
The Commercial Invoice is your passport for goods. It must include:
- Date of Issue
- Shipper and Consignee full address
- Detailed description of goods
- HS Code (minimum 6 digits)
- Country of Origin (manufacture)
- Value and Currency
- Incoterms
Other docs: Packing List, Certificate of Origin (for CUSMA/CETA), and Bill of Lading.
Landed Cost: Your Forecasting Model
Formula: Product Cost + Freight + Insurance + Duty + Tax + Brokerage + Disbursement
| Component | What to Watch For |
|---|---|
| Duty | Varies by HS code and Origin. Check for Trade Agreement eligibility. |
| GST / HST | Calculated on the (Value + Duty). Based on destination province rates (5% to 15%). |
| Brokerage Fee | Fee for entry preparation. Couriers often include this for air express, but charge for ground. |
| Disbursement | A percentage fee (usually 2-3%) charged by the carrier for fronting the duty/tax payment to CBSA. |
Common Mistakes to Avoid
- Vague Descriptions: "Samples" or "Parts" are not acceptable. Use "Steel machine screws for printing press."
- Wrong HS Codes: This leads to retroactive duty claims up to 4 years later.
- Ignoring CARM: Failing to register can result in goods being held at the border.
- Surprise Fees: Shipping via Ground service often triggers expensive brokerage "entry preparation fees" upon delivery.
Need a Compliant, Cost-Efficient Canada Import Plan?
Jet Worldwide helps you map HS codes, estimate landed costs, and implement hybrid logistics strategies.
Talk to an Expert Get a Shipping RateFrequently Asked Questions
What documents do I need to import goods into Canada?
At minimum: a commercial invoice with precise descriptions, HS codes, value, country of origin, and Incoterms. You also need a waybill/BOL. Specific goods may require permits.
Who is the Importer of Record?
The Importer of Record (IOR) is the party responsible for paying duties and taxes. This can be a Canadian entity or a foreign company registered as a Non-Resident Importer (NRI).
How are duties and taxes calculated?
Duties are a percentage based on HS code and origin. GST/HST (sales tax) is applied to the sum of the Item Value + Duty.
Do I need a customs broker?
While you can self-clear, it is complex. Most businesses use a broker. Express couriers (like Jet Worldwide, FedEx, UPS) act as the broker for you on most parcel shipments.
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