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Trade Regulations of Canada

Trade Policy

Canada maintains a liberal trade regime. There are no foreign exchange restrictions, and import licenses are only required for a limited number of goods. Imports are generally subject to import duties.

Import licenses are required for items regulated under the Export and Import Permits Act. The Act lists various agricultural products (poultry, eggs, and dairy products), a number of textile and clothing items, and certain steel products.

The importation of certain commodities is however tightly controlled. Examples of regulated goods include: food products, drugs and medical devices, hazardous products, some offensive weapons and firearms, endangered species and motor vehicles.

Duties are assessed on the transaction value (the price actually paid or payable for the goods), including commission, brokerage, packing, royalties and transportation to the Canada point. Hong Kong and China origin goods are eligible for the preferential tariffs under the Canadian General Preferential Tariff (GPT) Scheme.

Import Controls and Licensing

Most goods can enter the Canada market without import restrictions. However, certain commodities are prohibited from importation under the provisions of the Canadian Customs Tariff regulations, while others are regulated under the Export and Import Permits Act. Regulated categories cover various agricultural products (poultry, eggs and dairy products), a number of textiles and clothing items, and certain steel goods.

The Export and Import Controls Bureau is responsible for administering the Export and Import Permits Act. The import Controls List comprises textiles and clothing, agricultural products, steel products and weapons; whereas the Export Controls List contains agricultural products, refined sugar, peanut butter, textiles and clothing, weapons and nuclear energy materials and technology, dangerous goods etc.

All foods imported into Canada are subject to the Food and Drugs Act, which prescribes constituents and quality standards of each constituent, as well as labelling requirements.

Food that is labelled or advertised to the public as a treatment for any diseases or physical disorders may not be imported or sold in Canada. Food additives are strictly controlled.

Many alcoholic beverages have minimum age requirements and subject to provincial regulations and must be imported through the liquor commissions in the province where they will be consumed.

Cosmetics Notification Form must be submitted to the Health Protection Branch of Health Canada within 10 days of the first sale of a new cosmetic product to ensure that the new product complies with all regulatory requirements.

Canada has detailed drug regulations on pharmaceuticals, veterinary products, pesticides and disinfectants which are restricted or controlled under import permits.

The import, manufacture and use of potentially toxic substances, including new chemicals, polymers and biotechnology products are regulated by the Canadian Environment Protection Act and New Substances Notification Regulations.

Any claims about a product (or its packaging materials) being 'environmentally-friendly' must be accurate and in compliance with relevant laws. Claims that are ambiguous, misleading or irrelevant, or that cannot be substantiated should not be used.

Import quota controls on Hong Kong, China and other countries were eliminated when the WTO Textile and Clothing Agreement expired on 1 January 2005. Canada has also replaced all agricultural import restrictions with tariff-rate quotas.

Product Standards and Requirements

The National Standards System is the system for developing, promoting, and implementing standards in Canada. If certification of a product is required, it should be obtained before the goods are imported into Canada. Additional standards and requirements may be imposed at the provincial level. The contact point in Canada concerning product standards and requirements is the Standards Council of Canada.

Marking and Labelling

Canada requires bilingual labelling (English and French) for most products. Bilingual designation of the generic name on most pre-packaged consumer products is required under the federal Consumer Packaging and Labelling Act. Under this Act, the product identity declaration, net quantity declaration and dealer’s name and principle place of business must appear on the package / label of a consumer good sold in Canada. In addition, Textile Labelling and Advertising Regulations have been amended to allow the use of lastol and PLA (or polyactic acid) as generic fibre names in textile and apparel labels in April 2010.

The agency responsible for inspection of imports, Canada Customs and Revenue Agency, also requires an indication of the country of origin on several classes of imported goods. Goods not properly marked will not be released from Canada Customs until suitably marked. In general, environmental claims that are ambiguous, misleading or irrelevant, or that cannot be substantiated, should not be used. 

Customs Tariff and Tax

Canada adopts the Harmonised System (HS) of the Tariff Schedules. All commercial imports are subject to customs duty and the goods and services tax (GST) unless exempted. Depending on the goods or their value, some other taxes may apply, e.g. excise tax on luxury items like jewellery and alcohol. Duties are assessed on the transaction value (the price actually paid or payable for the goods), including commission, brokerage, packing, royalties and transportation to the Canada point.

A provincial sales tax (PST) is assessed on all imports to British Columbia (7%), Manitoba (8%), Newfoundland (8%), New Brunswick (8%), Nova Scotia (10%), Ontario (8%), Prince Edward Island (9%), Quebec (9.975%) and Saskatchewan (5%). Additionally, a broad-based value-added sales tax, known as the goods and services tax (GST), is levied at 5%, effective 1 January 2008. In addition, excise duties and taxes are charged on goods such as spirits, wine, beer, tobacco products, fuel-inefficient vehicles, automobile air conditioners and certain petroleum products.

Canada may impose anti-dumping duties on imports considered to be priced less than the "normal" price charged in the exporter's domestic market and caused material injury to the concerned industry in Canada. Furthermore, if a country is found to be unfairly subsidising its exporters, Canada is authorised to impose a countervailing duty equal to the amount of the subsidy expressed as a percentage of the export price of the goods. These duties remain in place for five years and can be renewed for additional terms of five years. Currently, Canada imposes anti-dumping and / or countervailing duties on several imports from the Chinese mainland, including flat hot-rolled carbon and alloy steel sheet and strip; hot-rolled carbon and high-strength low alloy steel plate; casing, seamless carbon steel or alloy oil and gas well; oil country tubular goods; pup joints; steel piling pipe; carbon steel welded pipe; steel grating; carbon steel fasteners (i.e. carbon steel screws); stainless steel sinks; copper pipe fittings; aluminum extrusions; unitised wall modules; thermoelectric containers; silicon metal; copper tubes and concrete reinforcing bar.

Canada may also invoke China-specific safeguard against imports from China if such imports are being imported in such increased quantities or under such conditions as to be a significant cause of market disruption to domestic producers of like or directly competitive goods in Canada. The first case was initiated in July 2005 and involved self-standing barbeques for outdoor use from China. In that instance, the Canadian International Trade Tribunal (CITT) allegedly found evidence of market disruption and established a 15% safeguard duty for a period of three years. The provisions relating to safeguard inquiries specific to China under the Protocol on the Accession of the People’s Republic of China to the World Trade Organization expired on 11 December 2013.

The Canada Revenue Agency can assist traders to determine the proper tariff classification, value for duty, origin, and the duty and tax rates that apply, and will provide written rulings on request.

Documentary Requirements

A complete documentary package should be presented to the Customs when the imported goods arrive at the country's border. The package includes:

1) Cargo Control Document prepared by the carrier based on the shipper's information;

2) Commercial Invoice indicating the buyer, seller, country of origin, price and detailed description of the goods with quantity and unit price;

3) Import permits, health certificates and examinations as required by other Federal government departments: e.g. the Canadian Food Inspection Agency examines and gives permits for some meat products, and all restricted or controlled drugs require an import permit from Health Canada; the Department of Foreign Affairs and International Trade requires import permits for textiles and clothing;

4) Certificates of Origin for claiming lower customs duty rates for goods from USA and Mexico (under North American Free Trade Agreement), Israel (under Canada-Israel Free Trade Agreement) or Chile (under Canada-Chile Free Trade Agreement) or Form A Certificate of Origin applies to goods covered by the Generalised System of Preferences;

5) Bill of Lading to satisfy the direct shipment condition of preferential tariff treatment - goods must be shipped on a through bill of lading from the country of origin to a consignee in Canada;

6) Other documents include Insurance Certificate, Packing List, Pre-shipment Inspection and pro-forma Invoice as requested.

Consumer Protection

The safety Bill C-36, known as the Canada Consumer Product Safety Act (CCPSA), received Royal Assent in late 2010 and came into force on 20 June 2011. The Act establishes a broad prohibition against manufacturing, importing, advertising or selling consumer products that pose an unreasonable hazard to human health or safety by requiring industry members to report when they become aware of a serious incident or death related to their products, and manufacturers or importers to provide test / study results on products when asked. It also empowers Health Canada to recall dangerous consumer products.

Hong Kong's Trade with Canada

Canada is currently Hong Kong's 24th largest trading partner. Total exports to Canada were valued at HK$9.8 billion in the period of January-June 2015, comprising mainly telecommunications equipment and parts, articles of apparel, of textile fabrics, computers, women's or girls' wear of textile fabrics, not knitted, toys, games & sporting goods and footwear originated chiefly from mainland China. Amounting to HK$7.3 billion, Hong Kong's imports from Canada comprised mainly crude vegetable materials, raw fur skins, telecommunications equipment and parts and meat of bovine animals, fresh, chilled or frozen. Please click here for the market profile of Canada.

Content provided by Picture: HKTDC Research