Proposed changes from Canada Border Services Agency (CBSA) on how value for duty is determined for imports

CBSA has proposed changes that will amend the base at which duties are defined and paid, whereby an importer of goods into Canada (whether resident or non-resident in Canada) will be required to use the selling price of a product rather than its purchase price when assessing the value for duty. This change would apply to goods sold for the purpose of being exported to Canada, regardless of whether the transfer of ownership of the goods is completed before or after the goods are imported, aka whether the person in the last sale is the importer of the goods. CBSA’s intent in this is removing the perceived advantage for foreign-based importers as they can declare a lower priced sale in the trade chain to value their goods and pay less duty on imported goods, however, there does not appear to be anything in the regulation that would limit it to foreign importers, so it appears that resident importers with multiple sales could also experience higher duty import values.

RCC notes this is extremely likely to increase the prices paid by retailers to wholesalers as the duties become payable on their purchase prices, rather than the wholesale prices paid by their suppliers. This impact does not seem to have been properly considered by CBSA. RCC is active on the file and will be pursuing an extension of the comment period, which is currently only open until June 26, 2023.