Exporting to Canada – Overview
Canada is a stable economy in North America and is constantly a top tier GDP economy (source Statistics Times). This offers excellent opportunities for those companies exporting to Canada.
Canada has a stable government, strong rule of law and effective regulatory system. It is ranked by the World Bank in the top 20 in terms of easiest countries in the world to start, run and do business.
Canada has a population of 35.6 million with 26% of the population under 25 years of age (source cia.gov).
Canada is an attractive export market due to its proximity to the United States and Mexican markets. Canada’s major industries include manufacturing, mining and oil and gas, construction and finance. Canada has a dominant services-based economy and is a G7 leader in terms of economic growth.
Exporting to Canada has the added beniefts as Canada has major trade deals with the European Union CETA and is part of North American Free Trade Agreement NAFTA along with the USA & Mexico.
Canada’s Business culture
Canada is a relatively easy market to do business in. Canadians are relaxed and approachable in their business dealings but they do put a high importance on developing strong, long-term business relationships. Face-to-face meetings are important as they help build rapport, which will facilitate exporting to Canada.
Although officially a bilingual country, outside of province of Quebec, business in Canada is conducted in English. French is the language of business in Québec under provincial law. Therefore you may need an interpreter for business meetings in Québec if you do not speak French fluently.
Keep in mind that when exporting to Canada prices quoted in U.S. dollars should be clearly stated so as to prevent any confusion with the Canadian dollar.
Setting up in Canada
Canada’s proximity to the USA and its stable economy plus banking system makes it an attractive destination for companies wishing to set up in North America. For companies interested in setting up in Canada they should visit Canada’s International Gateway portal.
The use of agents or distributors in Canada is common place. However, as Canada is a big country by land mass, you should check that the agents are based near to your potential buyers.
Direct exports to Canada are possible if you’re selling online or responding to inquiries from Canadian companies.
Banking and Finance
The unit of legal tender in Canada is the Canadian dollar.
The Canadian banking system is well-established, advanced, highly conservative and highly regulated. Indeed the World Economic Forum ranked it second in the world ranking of “soundest banks” (source World Economic Forum).
Canada’s banks operate through an extensive network that includes more than 6,000 branches and 18,000 automated banking machines (ABMs) across the country.
Tariffs and Non-Tariff Barriers
Tariff
When exporting to Canada for most products, importers in Canada are not required to apply for import licence.
The Canada Border Services Agency’s website lists the required documents for import. It is worth investigating if Canada has signed any trade agreements with your country. Click here to see a list of the current trade agreement between Canada and other countries.
Non-tariff barriers
Exporters to Canada should keep in mind that certain goods cannot be imported into Canada. click here to find out about prohibited imports into Canada.
You must check that your product, process or service conforms to the legal requirements set out in the relevant Canadian standard.
Suppliers and manufacturers have an obligation to make sure products are safe. Products must meet relevant safety standards, have clear instructions for proper use and include warnings against possible misuse.
The Standards Council of Canada (SCC) oversees Canada’s National Standards System which implements standards in Canada.
Product certification, labelling and packaging
The Canadian Consumer Packaging and Labelling Act requires that all labels be bilingual (English and French) and that the following information appears on the package/label of all consumer goods sold in Canada:
- Product Identity
- Net Quantity
- Dealers Name & Principal place of business
The regulation of the importation of food into Canada is the responsibility of the Canadian Food Inspection Agency (CFIA). Information for food labelling can be found on its Food Labelling for Industry page.
Units of measure In Canada is the metric system.
Methods of quoting and payment
Quotations should be made in Canadian dollars. The price should be quoted as a CIF price (CIF=Carriage+ Insurance+ Freight) unless the buyer requests an FOB price (Free on Board)
Typical payment terms in Canada are from 30 to 90 days. An early payment, issued within 10 days of invoice date, could receive a discount of 1%-2% off the invoice value.
Normal precautions in dealing with a first-time customer should be exercised, and safeguards instituted wherever possible at least until a relationship has been established.
Documentary & Clearance Requirements
Documentation required:
The website of the Canada Border Services Agency (CBSA) advises on the required documents for importing goods into Canada. Exporters are generally required to submit the following information for exports to Canada:
- Two copies of the invoice.
- Two copies of the cargo control document (CCD).
- Two copies of a completed Form B3, Canada Customs Coding Form.
- Any import permits, health certificates or other forms that are required (i.e. certificate of origin, health certificate).
A Canada Customs Invoice (CCI) should be used for all shipments with a freight on board (FOB) value of C$1,600 and over. Commercial invoices can be used but must include all the information required in the CCI. The CCI may be prepared by the supplier, importer or customs broker.
Certificates of origin are only required to support any tariff treatment claimed in the Customs Coding Form (Form B3).
For food products entering Canada, CFIA requires an Import Declaration which provides product and packaging information related to the shipment.
Customs process:
A carrier must report all shipment to the Canadian Border Services Agency (CBSA) when it arrives at the Canadian port of entry. It does this by filling out a manifest/cargo control document (CCD) or by using CBSA’s Electronic Data Interchange (EDI) System. The most commonly used CCD is Form A8A (B).
In relation to fresh produce shipments, a Confirmation of Sale form is required by the Canadian Food Inspection Agency (CFIA) as evidence that a firm purchase agreement has been made. This is reviewed by Canada Customs at the point of entry and relayed to the CFIA.
Business Risks in Canada
Companies wishing to operate in Canada should commit to the highest level of corporate behaviour and familiarise themselves with the laws of their country and the penalties pertaining to bribery of foreign officials.
Intellectual Property Protection
Trademarks, designs, patents and copyright are the principal forms of IP available under common law in Canada. Canada’s Intellectual property (IP) regime is administered by the Canadian Intellectual Property Office (CIPO), an agency of Industry Canada, and is governed under six pieces of federal legislation:
- The Copyright Act.
- The Industrial Design Act.
- The Integrated Circuit Topography Act.
- The Patent Act.
- The Plant Breeders’ Rights Act.
- The Trade-marks Act
Registration of design & copyright, patents and trademarks can be made online via the CIPO website.
Note that registration of integrated circuit topographies (ICT) must be submitted in writing to the CIPO.
Plant varieties must be submitted in writing to the Canadian Food Inspection Agency who administers PBR.
Dispute resolution
Canada’s legal system offers parties the ability to settle commercial disputes, however for those companies exporting to Canada, it can be lengthy and costly.
However the Canadian Department of Justice does suggest an Alternative Dispute Resolution (ADR) system.
Canada Web Resources
Canada Revenue Agency
Canadian Border Services Agency
Canadian Food Inspection Agency
Canadian Department of Justice
Canadian Intellectual Property Office (CIPO)
Export and Import Controls Bureau
GS1 Canada
Statistics Canada
About the Author
Aidan Conaty is founder of TCI China & Goodada. Aidan’s background is in Supply Chain Consultancy and he is a qualified accountant.