The amendments also aim to meet the increasing volume of e-commerce
The Canada Border Services Agency (CBSA) has proposed amendments to the Valuation for Duty Regulations, strengthening the statutory and regulatory frameworks to protect the competitiveness of Canadian businesses and importers.
The CBSA said in a news release that it is continuously reviewing customs processes, including legislative and regulatory instruments, to protect the competitiveness of Canadian businesses and meet the increasing volume of e-commerce. The proposed amendments aim to help Canadian importers compete on a more level playing field with foreign-based importers and address lost customs revenue to the government in duties paid on lower value for duty declarations.
In 2022 alone, the CBSA assessed over $39 billion in duties and taxes, encompassing customs duties, Special Import Measures Act duties, and GST and Excise taxes. The CBSA also claimed that e-commerce is becoming an important platform for business operations. The CBSA observed a surge in e-commerce, with retail e-commerce sales witnessing a substantial 67.9 percent increase between February 2020 and July 2022. The share of retail e-commerce sales, as a proportion of total retail sales, rose from 3.9 percent in 2019 to 6.2 percent in 2022.
Canada's present regulatory framework on determining the value for duty of imported goods does not align with the international consensus established at the World Customs Organization. This disparity gives foreign-based importers an unfair advantage by allowing them to declare a lower sale price and pay reduced duties on their imported goods. To address this misalignment, 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 ensure a consistent and reliable method for calculating the value for duty of all imported goods.
The CBSA has published draft regulations in the Canada Gazette, Part I, to facilitate public input. Interested parties, including importers, businesses, and customs brokers, are encouraged to provide written comments on the draft regulations by June 26.
