How To Import Commercial Goods Into Canada

Are you curious about how to import commercial goods into Canada? Just about anyone can do it as long as they comply with government regulations. Take a look through our guide to find out the 11 necessary steps involved in importing goods into Canada.

1. Obtain an Import/Export Number

To begin importing goods into Canada, you’ll need an import/export number in addition to your regular business number. For more information, visit the Canada Revenue Agency’s How to Register for a Business Number page.

2. Research the Regulations Applicable to Your Business

Certain products may require you to obtain permits or licenses or follow specific government regulations. Visit the Canada Border Services Agency’s (CBSA) list of imported commodities that may be subject to permits or regulations.

3. Create a Business Plan

Like any other business, your importing business requires a comprehensive plan. Your business plan shouldn’t differ significantly from a plan for a business buying and selling domestically. 

Need help? Visit SBBC’s Business Planning section for more information.

4. Assess Your Market

Market research is an essential step in developing your business strategy. You’ll need to know who your buyers are and their buying preferences to determine the best sales and marketing strategies. Visit our Market Research section to discover how to assess your target market.

5. Find Your Suppliers

You’ll need to find suppliers once you know what products you want to import. You can find them by:

  • Searching online – Using Google, Kompass, or Alibaba.
  • Searching manufacturer directories – We have a few directories of international manufacturers in the Small Business BC library that you can refer to.
  • Contacting industry associations – Find industry associations in Canada and abroad representing the goods you wish to import. These associations often publish lists of their member companies that you can contact.
  • Contacting foreign trade offices – Foreign trade representatives are located in Canada to promote their country’s goods and services and to encourage trade between the two countries. The best way to find these offices is to contact the embassy or consulate of the country you want to buy from.
  • Attending trade shows

6. Negotiate With Suppliers

Once you’ve chosen a potential supplier, thoroughly research the company’s background to ensure it has a good reputation.

Trust is a major aspect of an importing relationship, as your business depends on the supplier providing the goods you need. You should ask for references and contact them to see what their experience has been like with the supplier. A face-to-face meeting with a potential supplier is usually required at this stage.

After contacting suppliers, you can request a price list, catalogues, and samples. If the samples are acceptable, you can test them in the market. Remember to be persistent when negotiating for free samples.

7. Research the CBSA’s Requirements for Your Business

Before you can import products into Canada, the CBSA requires you to meet specific requirements. These requirements are for both your business and the products you want to import. Check the CBSA’s website for a complete list of regulations.

8. Calculate Relevant Duties

The CBSA Assessment and Revenue Management (CARM) system is the new way they assess and collect import duties. Check out the CARM onboarding documents for guidance through the registration process.

Follow these steps to determine the rate of import duty for your products, if any:

  1. Determine the tariff classification number – Many trading countries use the Harmonized System (HS) as their classification system. The six digits at the beginning of the number are universal for all countries using HS for that product. To determine your tariff classification number, consult the Canadian Customs Tariff or the Border Information Service (BIS).
  2. Establish where the product was manufactured – Keep in mind that this may not be the same place the product was shipped from. The rate of duty depends on the product’s country of origin.
  3. Find the tariff treatment and duty rate – Once you have the tariff classification number, you’ll need to find the applicable tariff treatment that applies to your product before determining the duty rate. There are “Most-Favoured-Nation (MFN) Tariffs” and “Applicable Preferential Tariffs.”
  4. Consult the Canadian Customs Tariff page – Look up your product by its HS code and check the import duty. For instructions on how to interpret the customs tariff, contact the CBSA.

On top of the import duty, you must also pay GST on the imported products, CBSA inspection fees, and customs brokerage fees if you use a customs broker. If you’re importing alcohol, tobacco, or gasoline, you’ll also be charged excise duty.

9. Decide if You Want To Use a Customs Broker

You’ll need to decide if you want to use a customs broker. This is a person or company licensed by the CBSA to act on your behalf and help clear goods across the Canadian border.

Ensure your broker is reliable and financially reputable. Follow up with their references and ask if they were satisfied with the broker’s services. Read the CBSA’s page on hiring a licensed customs broker for more advice.

Even if you use a customs broker, you, as the importer, are responsible for all duties until you or your broker pays them. This applies regardless of whether or not you paid the amount to your broker.

10. Clarify Your Payment Terms

It’s essential to clarify the terms of the sale with your seller. It should outline the buyer and seller’s obligations, risks, and costs. Incoterms are the most commonly agreed-upon terms of sale in international business.

11. Manage Your Payments

You must ensure that your suppliers are paid in full and on time. How you manage this depends on how trustworthy your seller is.

The primary methods of payment, listed in order of most to least risky for the importer, are:

  1. Cash in advance – Your company pays for the goods before the shipment. Funds are usually sent by wire transfer, cheque, or credit card. Once you send the money, the supplier arranges to ship the goods to you.
  2. Documentary Letter of Credit – Letters of Credit (LCs) are the most common payment method in international business and are usually a good compromise for both the buyer and seller. LCs rely on banks to receive and check shipping documents and guarantee payment. For more information on LCs, contact your business bank.
  3. Open account – If you’re well-established, trustworthy, and have excellent creditworthiness, the seller may consider simply billing you and expect you to pay later.

Small Business BC is Here to Help

SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our business articles.