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The Canada Border Services Agency (CBSA) is suggesting changes to the Valuation for Duty Regulations to safeguard the competitiveness of Canadian businesses and importers.
According to the CBSA, they regularly review customs procedures, laws, and regulations to support Canadian businesses and handle the growing volume of e-commerce. The proposed amendments aim to level the playing field for Canadian importers in comparison to foreign importers and address the issue of lost customs revenue due to undervalued declarations.
In the year 2022 alone, the CBSA collected more than $39 billion in duties and taxes, which encompassed various types of duties and taxes related to customs and imports. The CBSA acknowledges the increasing significance of e-commerce as a business platform. They have observed a significant surge in retail e-commerce sales, with a 67.9 percent increase between February 2020 and July 2022. The proportion of retail e-commerce sales in relation to total retail sales rose from 3.9 percent in 2019 to 6.2 percent in 2022.
The current regulations in Canada for determining the value of imported goods do not align with the international consensus established by the World Customs Organization. This misalignment gives an unfair advantage to foreign importers who can declare a lower sale price and pay reduced duties on their goods. To address this issue, the CBSA aims to introduce a definition for "sold for export to Canada" and modify the definition of "purchaser in Canada." These proposed regulatory changes will establish a consistent and reliable method for calculating the value of all imported goods.
The CBSA has released draft regulations in the Canada Gazette, Part I, to invite public input. Interested parties, including importers, businesses, and customs brokers, are encouraged to provide written comments on the draft regulations before June 26.