Customs Tariff Measures

March 22, 2011


Customs Tariff Simplification

The Federal Government announced the initiation of a process to simplify the Customs Tariff in order to facilitate trade and lower the administrative burden for businesses. This follows in the footsteps of the last two Federal Budgets to eliminate duty on machinery and equipment and reduce red tape. A variety of legislative amendments to the Customs Tariff and related regulatory modifications will be made in three categories.

The first category includes changes related to the reduction of the customs processing burden for businesses in light of the Federal Government’s broad tariff elimination measures included in the 2009 and 2010 Federal Budgets. For example, a number of tariff items contained in the Schedule to the Customs Tariff will be reduced to simplify tariff classification of imported goods and to eliminate many “end-use provisions”.

Second, changes will be made to modify the structure of the Customs Tariff to make it more user-friendly. The applicable Tariff Treatments (rates of duty) in the Schedule to the Customs Tariff will be restructured to make the tariff treatments applicable to imports from each country more transparent.

Third, obsolete provisions that have either expired or become redundant due to recent tariff and trade initiatives will be removed. For example, a number of provisions under Part 2, Division 4 of the Customs Tariff (Special Measures, Emergency Measures and Safeguards) can no longer be used under the terms of Canada’s free trade agreements and will be revoked.

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Facilitating Low Value Imports

The Budget proposes the introduction of three new “basket” tariff items (0%, 8% or 20% baskets depending on the category of goods, for example, apparel) in Chapter 98 of the Schedule to the Customs Tariff to facilitate the processing of low value non-commercial imports arriving by post or by courier. These new tariff items will simplify the Canada Border Service Agency’s (CBSA) tariff classification and release process for postal and courier imports with values less than $500.

Goods classified under the new generic basket tariff items will be subject to the Goods and Services Tax/Harmonized Sales Tax (“GST/HST”).  To ensure that certain existing GST/HST relieving provisions are applied to low value shipments imported by post or courier, the new tariff items will not apply where the goods are relieved from GST/HST.


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