The Canada Border Services Agency website lists the required documents for import. The most important document required from a U.S. exporter is a properly completed Canada Customs Invoice or its equivalent for all commercial shipments imported into Canada. The exporter can use their own form if the required information is provided. At the border, the importer or customs broker also submits Form B3, the customs coding form. Other documents that trucking companies provide for customs clearance may include a cargo control document and bill of lading. Some goods such as food or health-related products may be subject to the requirements of other federal government departments and may need permits, certificates, or examinations.
Customs brokers can assist U.S. exporters with details of the import documentation process, including Canada’s non-resident importer program, in which the United States exporter in the United States obtains a “business number” and can then be the “importer of record” for purposes of customs clearance. This arrangement offers many marketing advantages, in particular the opportunity to remove the burden of customs clearance of commercial shipments from the Canadian customer. Large retailers often demand that an exporter complete whatever paperwork is required so that all the retailer needs to do is unload the goods from the truck and pay the exporter for the goods. Many brokers advertise their non‑resident importer programs on their websites.
To claim duty-free status under the U.S.-Mexico-Canada Agreement, goods need to meet certain eligibility. To learn more about qualifying goods and certifying origin, visit trade.gov/usmca website.
For most mail-order shipments, the only paperwork needed is a standard business invoice. Companies should indicate the amount the customer paid for the goods, in either U.S. or Canadian dollars. If goods are shipped on a no-charge basis (samples or demos), the company must indicate the retail value of the shipment.
U.S. companies shipping commercial goods to Canada need to be aware of the Canada Border Services Agency (CBSA) eManifest program. eManifest requires carriers, freight forwarders, and importers in all modes of transportation (air, marine, highway, and rail) to transmit cargo, conveyance, house bill/supplementary cargo, and importer data electronically to CBSA prior to loading in the marine mode and prior to arrival in the air, rail, and highway modes.
Agricultural Supply Management
Canada uses supply-management systems to regulate its dairy, chicken, turkey, and egg industries. Canada’s supply-management regime involves production quotas, producer-marketing boards to regulate price and supply, and tariff-rate quotas (TRQs) for imports. Canada’s supply-management regime severely limits the ability of U.S. producers to increase exports to Canada above TRQ levels and inflates the prices that Canadians pay for dairy and poultry products. Under the current system, U.S. imports above quota levels are subject to prohibitively high tariffs (e.g., 245% for cheese and 298% for butter).
The USMCA expands market access opportunities for dairy products through new TRQs exclusively for U.S. products. For example, by year six of the USMCA, quota volumes will reach 50,000 metric tons (MT) for fluid milk, 10,500 MT for cream, 4,500 MT for butter and cream powder, 12,500 MT for cheese, and 7,500 MT for skim milk powder. Under the USMCA, Canada will eliminate tariffs on whey in 10 years and margarine in 5 years. Canada has opened new TRQs for U.S. chicken (quota volume will reach 57,000 MT by year six of the USMCA) and for U.S. eggs and egg products (quota volume will reach 10 million dozen eggs equivalent by year six of the USMCA). In addition, Canada expanded access for U.S. turkey. Canada and the United States also agreed to strong rules to ensure TRQs are administered fairly and transparently to help ensure exporters benefit from the full market access negotiated in the USMCA.
On May 25, 2021, the United States requested and established a dispute settlement panel under the USMCA to review Canada’s dairy TRQ allocation measures that undermine the value of the TRQs by setting aside and reserving access to in-quota quantities exclusively for processors. On December 21, 2020, Canada and the United States held consultations, which did not resolve the matter. On October 25 and 26, a panel hearing was held in Ottawa. The final panel report was released to the public on January 4, 2022. The Panel agreed with the United States that Canada’s allocation of dairy TRQs, specifically the set-aside of a percentage of each dairy TRQ exclusively for Canadian processors, is inconsistent with Canada’s commitment in Article 3.A.2.1 l(b) of the USMCA not to “limit access to an allocation to processors.”
While Canada has proposed to stop setting aside and reserving access to in-quota quantities exclusively for processors, the United States remains concerned with Canada’s proposal to implement the panel’s finding and continues to discuss the matter with Canada with the aim of agreeing on a resolution of the dispute. The United States also remains concerned about potential Canadian actions that would further limit U.S. exports to the Canadian dairy market and continues to monitor closely any tariff reclassifications of dairy products to ensure that U.S. market access is not negatively affected.
Milk Classes
Canada establishes discounted prices for milk components for sales to domestic manufacturers of dairy products used in processed food products under the Special Milk Class Permit Program (SMCPP). These prices are “discounted,” being lower than regular Canadian milk class prices for manufacturers of dairy products and pegged to U.S. prices or world prices. The SMCPP is designed to help Canadian manufacturers of processed food products compete against processed food imports into Canada and in foreign markets. An agreement reached between Canadian dairy farmers and processors in July 2016 introduced a new national milk class (Class 7), with discount pricing for a wide range of Canadian dairy ingredients used in dairy products, to decrease imports of U.S. milk protein substances into Canada and increase Canadian exports of skim milk powder into third country markets. Provincial milk marketing boards (agencies of Canada’s provincial governments) began implementing Class 7 in February 2017.
Under the USMCA, Canada was obligated to eliminate Class 7 within six months of entry into force. In addition, Canada is obligated ensure that the price for non-fat solids used to manufacture skim milk powder, milk protein concentrates, and infant formula will be no lower than a level based on the USDA price for nonfat dry milk. Transparency provisions obligate Canada to provide information necessary to monitor compliance with these commitments. Canada is obligated to apply charges to exports of skim milk powder, milk protein concentrates, and infant formula in excess of thresholds specified in the USMCA.
Wine, Beer, and Spirits
Canada allows residents to import a limited amount of alcohol free of duty and taxes when returning from trips that are at least 48 hours in duration. If the amount exceeds the personal exemption, duties and taxes apply. The taxes vary by province, but generally inhibit Canadians from importing U.S. alcoholic beverages when returning from shorter visits to the United States.
Most Canadian provinces restrict the sale of wine, beer, and spirits through province-run liquor control boards, which are the sole authorized sellers of wine, beer, and spirits in those provinces. Market access barriers imposed by the provincial liquor boards greatly hamper exports of U.S. wine, beer, and spirits to Canada. These barriers include cost-of-service mark-ups, restrictions on listings (products that the liquor board will carry), reference prices (either maximum prices the liquor board is willing to pay, or prices below which imported products may not be sold), label requirements, discounting policies (requirements that suppliers must offer rebates or reduce their prices to meet sales targets), and distribution policies.