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Canadian's Basic Guide to Customs & Importing

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Old 04-15-2011, 04:09 PM   #1

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Exclamation Canadian's Basic Guide to Customs & Importing

1. Preamble.

So you've been thinking about saving a few bucks by buying from the USA but have never done so? Along with CBSA's (Canada Border Services Agency) webpage, this guide will serve to help you import your cheap boat / car parts with ease.

When buying from the states, you have two options. You can either have the product shipped directly to your residence in Canada, or you can have it shipped to an address in the USA if you have one. Usually, you'll save more with the latter option, but it results in more work and effort on your part. I'll be covering both bases in this guide, and it'll be up to you to decide which is for you. I'll start with the monetary fees you might incur, and then work my way into the methods of shipment.
2. Monetary fees.

Below are the various fees the taxman will take from you.

(1) Sales Taxes (PST & GST).

You will always pay PST and the GST (or HST depending on which province you are located in) on all products imported into Canada unless you fall into one of the exceptions below. This is equal to 13% of the total value of your goods (which you'll need to include both shipping and any state taxes if you want to do things legitimately).

Exceptions: If you've been gone: less than 24 hours - nothing; more than 24 hours - $50 tax free. Anything over that limit, and you'll be paying taxes on everything; more than 48 hours - $400 tax free. Anything over that limit and you'll be paying taxes on the difference; more than 7 days - $750 tax free. Anything over that limit and you'll be paying taxes on the difference.
(2) Duties.

This fee depends on where your product was manufactured and in some cases can also depend on how much you bring back as well. You can find out how much you're obligated to pay by visiting this fee schedule: http://www.cbsa-asfc.gc.ca/trade-com...-01-99-eng.pdf

Exceptions: If you product was made in North America, it falls under the NAFTA act and you are exempt from duties (which is different from sales taxes).
(3) Brokerage.

Brokerage is a fee assessed and collected by your shipping agent for clearing your items at customs (and lending you the money for taxes). This is only when you have the item shipped to your residence in Canada from the states and does not apply if you're bringing product back yourself.

Since the rate you're charged is hugely dependent on your shipping agent (UPS, Fedex, or USPS), please refer to section 3.

Exceptions: None.
3. Shipping.

You have a few options for shipping, and they're listed below.

(1) UPS.

Fast, but expect to pay ridiculous brokerage fees if you're not shipping express (KMM). They charge the highest brokerage fees of all three shipping companies and you can find their brokerage rates here. In addition to the brokerage fee, you are also responsible for a $4.25 fee for collecting the brokerage fee. This is all payable when your item is delivered.
(2) Fedex.

Probably the fastest, but also the most expensive (before brokerage, that is). Unlike UPS, Fedex sends you an invoice in the mail. Their brokerage fees can be found here (not listed on their site).
(3) USPS.

Slowest, and has a poor tracking system - but one of the best reasons to go with USPS is that they have a flat rate (up to a value of $1,200) brokerage charge of $5.
4. Mailboxes.

In many occasions, you may find that a retailer will only ship to addresses in the states - and like the most of us, we don't have friends or family living right across the border willing to accept a shipment on your behalf. This section will help you get around these obstacles.

There have been a number of businesses that address these problems, and will actually accept and hold your shipments at a nominal fee. All you do is simply have the shipment sent to their address, with your full name included on the shipment information. Many (myself included) also use these mailboxes to save even more money as in some cases, shipping is generally free within the continental USA, but is grossly inflated when shipping internationally (Tirerack, and DiscountTiresDirect are great examples).

Although there are several businesses that rent mailboxes, I'm going to recommend (based on my personal experiences) CBIUSA and will explain the process you'll need to go through if you're considering using a mailbox. They charge a flat rate per parcel received or you can buy a yearly membership.

(1) At the time of purchase.

If you're considering about using a mailbox with your credit card, you might need to add CBIUSA as one of your alternate addresses on file with your credit card provider. Many online merchants require credit card verification by address - and without this step - your order will most likely be rejected. You can call your bank to do this, and it's a fairly simple process.

Obviously, instead of using your personal address for the shipping information - you'll be using your mailbox in the states. If you're taking my recommendation and using CBIUSA - you'll be giving the following address to both your bank and the shop you're buying from: 1711 Cudaback Avenue - Niagara Falls - NY (USA) - 14303.
(2) Prices.

CBIUSA charges a flat rate of either roughly $10 per package, or $15 for oversized ones and they'll hold your packages indefinitely so you can pick them up when it's convenient for you.
(3) What to do when it's been recieved?

So your package has been received by the guys at CBIUSA, and you're itching to know what to do now? Drive down to the states (read section 5), and bring some identification to pick up your goodies at CBIUSA. Their hours are listed on their site, but if you're lazy - they're Monday-Friday 9AM-5PM, Saturday 9AM-12PM, and closed Sundays.

Declare your goods at customs, or you can gamble and hide them. Refer to sections 5, 6, and 7 for more information.
5. Crossing the border.

You'll need to bring a valid passport in order to cross. If you're bringing any pets, you'll need to provide documentation that your pet has their up-to-date vaccinations. Fruits are not allowed past the border (and that includes oranges. )
6. Declaring to customs.

You are responsible for declaring all goods obtained from the states upon re-entry into Canada. This includes any taxes, shipping, or fees you've paid to obtain the goods. Taxes and fees will be charged appropriately (refer to section 2), and you can pay with cash, credit, or debit cards. Yes, you are legally supposed to pay taxes on top of taxes.

You can try to avoid paying these fees, but if you're considering to do so - please refer to section 7.
7. Warnings and advice.

If you're considering about evading remitting your taxes to the CBSA, please read this section clearly and consider the ramifications thoroughly.

You are responsible for proving the origin of all goods you're bringing back into Canada - and should they get suspicious about your new shoes, or tires - you'll need to prove that you either bought it in Canada, or have already remitted your taxes previously. If you are caught with smuggling goods (or undervaluing your declaration) - your passport will be entered into a national blacklist (shared by both the Americans and CBSA) for a total of seven (7) years. Should you get blacklisted, you will be questioned very thoroughly, and almost guaranteed subjected to even more thorough searches of your car and possibly your person each time you cross either border. In addition to being blacklisted, you will be required to pay even higher rates of taxation on your goods (I've heard of up to 50%, but I could be wrong) - and your vehicle may be impounded depending on the severity. For those that think you need a warrant to conduct searches of private property - the CBSA are exempt to this law under the Customs Act. Contrary to popular opinion, getting caught and violating the Customs Act is not a criminal offense.

So while you're free to gamble and risk an cavity search of both yourself and your car - I'm strongly not recommending it. If the taxes make the deal not a deal - it's not worth it (unless you're a fan of fingers up your glory hole).

You also may get lucky and be waived through (tax-free) if you've been co-operative, your story sounds plausible, and if it's not too much money. I've been waived through a few times, including once where I was importing a $300 bag for my girlfriend.
8. Useful links.

Rarely visit this site given its problems and lack of management interest.
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