Exporting Products From Canada
Determining the Suitability of your Product
Is your product going to sell in your target market? Ask yourself the following questions:
More information on finding a suitable market for your product can be found in section 2.3.
Global Affairs Canada, Export Development Canada, the Business Development Bank of Canada, and export consultancy services are valuable resources for market research. Chambers of commerce and trade associations, both in Canada and in your target market, can also help.
Declaring Goods with Customs
The export of goods from Canada is governed by the Canada Border Services Agency (CBSA). Our federal customs authority was created in 2003 by integrating the functions of the Canada Customs and Revenue Agency, Citizenship and Immigration Canada, and the Canadian Food Inspection Agency, into a new agency.
The CBSA has jurisdiction over customs, passenger inspection services, and intelligence, interdiction, and enforcement functions related to citizenship and immigration.
The CBSA is charge of administering Canada’s export regulations and controls, but there are a number of government agencies that manage regulation and legislation on the control and flow of certain goods across borders. While these regulations are enforced by the CBSA, inquiries about specific customs rules should be addressed to the government agency responsible for them.
This CBSA page can direct you to the relevant government agencies if you have questions about the export of certain goods. Also, keep in mind that you may need to obtain a permit or certificate from one of these agencies, (not the CBSA) before you export.
Before you start exporting, you need to obtain a business number from the Canada Revenue Agency (CRA) for an import/export account. This can be done either through your business or individually. Your export/import account is free and can be set up relatively quickly.
More information on business numbers—a nine-digit number that identifies your business to all levels of government—and links to registration can be found here.
You will need to determine the country of origin for your product before you start exporting, since origin can affect permit, certificate or license requirements.
Details on rules of origin and goods classification can be found in section 2.3.
Based on the origin of your goods, or the nature of what your exporting, you may need a permit from a government agency. If this is the case, your exports fall under the restricted category, and in addition to obtaining the relevant permit you may need to declare your exports to the CBSA.
Restricted and Non-Restricted Goods
Restricted goods are those which are regulated or controlled by the federal government and require licenses or permits, while non-restricted goods are those that don’t require a permit under any Act of Parliament.
Non-restricted goods to the U.S. don’t require an export declaration, and neither do goods to other international destinations valued under $2000.
Any goods to being sent to non-U.S. destinations valued over $2000 require an export declaration, as do any restricted goods heading to non-U.S. destinations. If restricted goods are U.S. bound, you must satisfy the permit or license requirement of the applicable Canadian regulatory body, but no export declaration is required.
In addition to Canadian regulations, there may be import regulations that need to be adhered to in the market you want to sell to. The World Customs Organization has information on import regulations in international markets, as does Canadian Consular Services. If you are using a customs broker to export your goods, they can find this information on your behalf.
If your goods require an export declaration, you are responsible for submitting this document. You can delegate this responsibility to a third party like a customs broker, but you are liable for making sure your declaration is accurate.
If your goods don’t need to be declared, indicate No Declaration Required on the packaging and shipping documents, with an explanation or the relevant numerical code.
Goods that require an export declaration must be classified with either Statistics Canada’s eight-digit Canadian Export Classification number or the CBSA’s ten-digit Canadian Tariff Classification number.
Goods exported using the Canadian Automated Export Declaration, an electronic reporting mechanism, must use the Canadian Export Classification number.
If you need to report your exports to the CBSA, you must do so according to specific timeframes depending on the mode of transportation used to export the goods from Canada:
Air: Two hours before goods are loaded
Highway: Prior to export
Marine: Forty-eight hours before goods are loaded
Mail: Two hours before goods are brought to the post office
Rail: Two hours before goods are loaded
If you need to submit an export declaration, you can do so using one of the following methods:
Canadian Automated Export Declaration: This electronic method allows you to report exports directly to the federal government using online software. Businesses need to register by mail or fax, but once they’ve signed up, they are free to use this service as much as they want. The reporting software is free, and the service is available 24 hours a day, seven days a week.
G7 Electronic Export Declaration Process: An initiative of the G7, this is another electronic reporting method which allows exporters to report goods using electronic data interchange. This program is not restricted to G7 countries. Exporters who are part of the Canadian Automated Export Declaration program need to register for the G7 program separately.
Summary Reporting: Exporters of bulk goods who export on a regular basis and have met specific CBSA requirements can make use of summary reporting. This allows you or your agent to summarize export data, which can be submitted on a monthly basis in writing, after your goods have left Canada.
B13A, Export Declaration: This paper form must be submitted to an export office.
If you need to cancel a shipment or modify information about a shipment you’ve already reported, you need to submit an amended declaration to an export office identifying the changes. Depending on the process used, this can be done electronically or manually.
This should go without saying, but always ensure that the information you provide to the CBSA is accurate. The organization can slap your company with fines, seize your goods or even press criminal charges if it believes you are willfully providing fraudulent information.
The CBSA stipulates that you must keep records of exports for six years. More information on bookkeeping regulations can be found here.
The aforementioned information is a bare-bones look at export regulations. For a more comprehensive picture of export controls and trading controlled goods, this guide from Foreign Affairs, Trade and Development Canada may be of use.
Before you start negotiating sales with a foreign customer, you will need to make sure that it’s legal to do business with firms from that country. The Canadian government currently has sanctions against 19 countries. These range from asset freezes restricting property transactions, to import/export restrictions on specific goods, bans on services and sweeping financial prohibitions.
A breakdown of the various types of sanctions the federal government can impose is found here.
Many of these sanctions have exceptions, most of which are for humanitarian goods or services. Information on applying for a sanction exception permit can be found here.
Source: Global Affairs Canada
Conformity assessments help to ensure that products and services have the required characteristics and that these characteristics are consistent from product to product and from service to service. These assessments include sampling, testing, inspection, certification, and quality and environmental system assessment and registration. This also includes accreditation of competence of those activities by a third party and recognition (usually by a government agency) of an accreditation program’s capability.
The Standards Council of Canada can help you understand accreditation programs, services and activities; identify applicable standards, regulations and conformity-assessment procedures that would apply to the market acceptance of your product; find competent standards authorities to contact in Canada or other countries; and locate standards published by a specific technical committee.
The SCC operations a service called ExportAlert!, which will tell you about pending changes to trade-related regulations.
Before delivering a service into a foreign market, you will need to find out about requirements for entering and working in the country, such as entry visas, work permits and professional certification requirements.
Source: Canada Business Network
If you run a service business, you understand the challenge of selling an intangible asset, and the need to adapt your service to the unique needs of your client. This is even more important in foreign markets, where cultural and linguistic differences will necessitate further tailoring your offerings to the circumstances of your international clients. This can be costly and time-consuming, so it’s a factor to be aware of.
The intangible nature of services can also make securing financing difficult, given that there is no physical collateral involved. However, if you have solid credit, and if you insure your accounts receivable, banks should be more amenable to your financing needs.