Compliance with Canadian Exporting and Importing Regulations

Spoiler Alert – Similar but Different

As a U.S. importer or exporter, we are required to comply with specific regulations.

For defense articles, we are regulated by the International Traffic in Arms Regulations (ITAR), for dual-use and commercial items, we must comply with the Export Administration Regulations (EAR), and for importing into the U.S., we are subject to the Customs Regulations and the Harmonized Tariff Schedule of the U.S. (HTSUS).

Canadian importers and exporters are also subject to complex regulations. In fact, from a humble U.S. trade compliance professional’s point of view, I would observe that Canada’s own import requirements and export regulations are like the U.S. in complexity and exporters and importers must also work within a matrixed organization of government agencies. And on a side note, Canada loves their acronyms as much as we do in the U.S., but maybe not as much as they love their ice hockey!

Importing into Canada

When making entry into Canada, a Canadian company must be registered with Canada Revenue Agency (CRA), have a Business Number and bond on file with the Canada Border Services Agency (CBSA). They companies that imports must also be registered in the CBSA Assessment and Revenue Management (CARM) system and have provided a Customs Broker with a power of attorney.

After these tasks have been performed, the importer must work with their supplier to obtain all shipping documents including the commercial invoice, packing list, air waybill/bill of lading and provide to their Customs broker. The importer must also ensure that the invoice indicates the correct destination Country of Origin, values and determines the Harmonized Schedule Number and duty rate for the goods and services trade are being imported.

From there, the importer and Customs broker will work together to clear the shipment, obtain the release of the shipment from CBSA and deliver the goods. The importer will also pay duties associated with the Harmonized Tariff Number as well as any applicable Goods and Services Tax (GST) and Provincial Sales Tax (PST).

You also need to be careful of any other Canadian government agencies that can regulate the importation of access to certain goods or other documents. For example, Health Canada regulates drug products, etc.

Last but surely not least, there are preferential trade programs including the Canada, U.S., Mexico Agreement (CUSMA) (formally NAFTA) that further provide duty savings opportunities but also complex compliance requirements.

Exporting from Canada

Canada also controls the exports of certain goods. For example, the exports of goods are distinguished from commercial goods by being “dual use”, regulated by Global Affairs and enumerated on the Export Control List (ECL). Goods exports that are deemed to have military or national security significance under the Canadian Defense Production Act are regulated by the Canadian Controlled Goods Program (CGP).

Goods that are found on the ECL or are controlled via the CGP require permits to most countries. Exporters must work with Global Affairs (GA) in applying for Permits for their exports to canada, through the NEXCOL environment. There are not any costs in obtaining a Permit from GA. The issuance value of a permit is based on the end user, end use, country of destination and any other risks that GA has identified.

When working in other countries with items controlled via the CGP, the Canadian company must be registered as a manufacturer/exporter, and they must keep documentation of their registration up to date.

Goods that are not on the market access the ECL or controlled via the CGP would not require permits unless they are subject to other areas of export controls including restricted countries, restricted parties or for any restricted end uses. End use controls would include military end uses, chemical/biological weapons, missile, UAVs, nuclear, etc.

Like the U.S., Canada’s Foreign Affairs also enacts and enforces sanctions on various countries, entities and activities.  For example, Canada has joined with the U.S. in imposing strict sanctions specific to Russia.

When not exporting goods from out of Canada, exporters must also work with a Freight Forwarder and file the appropriate export declaration.

Comparison

While the United States and Canada share a border and close economic ties, their import and export regulations have both similarities and notable differences.

This section will explore the key regulatory bodies, processes, and requirements for international trade in both countries, highlighting where they align and diverge in their approaches to trade compliance.

Importing
Canada	U.S.
Canada Border Services Agency (CBSA)	U.S. Customs and Border Protection
Canada Revenue Agency (CRA)	Internal Revenue Service (IRS)
CBSA Assessment and Revenue Management (CARM)	Automated Commercial Environment (ACE)
B3	Customs Form 7501
CUSMA – Canada, U.S. Mexico Agreement (Formerly NAFTA)	USMCA – U.S., Mexico, Canada Agreement (Formerly NAFTA)

 

Exporting
Canada	U.S.
Global Affairs (GA)	Department of Commerce Bureau of Industry and Security (BIS)
Canada Controlled Goods Program (CGP)	Department of State Directorate of Defense Trade Controls (DDTC)
Export Control List	Commerce Control List

In both cases, importers and exporters are reminded to maintain records, and have policies and procedures supporting compliance with all relevant and applicable regulations.

Things to keep in mind to be compliant

• Understand the items that you are importing or exporting.
• Work with compliance third party service providers including Customs Brokers and Freight Forwarders.
• Determine how your products are classified for importing and what duties and taxes are applicable
• Determine how your products are classified for export and whether they require a permit.
• Know your customers and suppliers.
• Develop appropriate procedures and policies.
• Maintain records

Know Your Regulations Before Trading With Canada

Navigating Canadian import and export regulations requires diligence and expertise. From registering with CBSA to obtaining necessary permits from Global Affairs, businesses must stay informed and compliant.

While similar to U.S. regulations in complexity, Canadian rules have unique aspects. Working with experienced professionals and maintaining thorough documentation is crucial for successful international trade operations in Canada.

Need help?  We have been assisting companies with export compliance for 16 years. Schedule a no-charge consultation with our team of experts today.