How to Import Commercial Goods into Canada

So You Want to Import: Where do You Begin?

Just about any good may be imported into Canada by anyone, subject to compliance with certain conditions imposed by the government; so where do you begin when you want to start your import business?

1. Obtain an Import / Export Number

To begin importing goods into Canada, you will need to obtain an import/export number in addition to your regular business number. For information on how to open a business in BC and how to add an import/export number visit the legal requirements section on our website.

2. Research the Regulations Applicable to Your Business

Certain products may require you to obtain permits or licenses, or follow specific government regulations.  Visit the Canada Border Services Agency for a full list of the regulations applicable to your business.

3. Create a Business Plan 

Just like any other business, your importing business will require a comprehensive plan, which will not differ significantly from a plan for a business buying and selling domestically.

For help writing a business plan, visit our Business Planning section.

4. Assess Your Market

Market research is an essential step in developing your business strategy.

You’ll need to know who your buyers are, and what their buying preferences are, in order to determine the best sales and marketing strategies. Visit the Market Research section to find out how to assess your target market.

5. Find Your Suppliers

Once you know what products you want to import, you’ll need to find suppliers. You can find suppliers by:

• Searching online. Use Google, Kompass, or Alibaba.
• Searching manufacturer directories. We have a number of directories of international manufacturers in the Small Business BC library that you can refer to.
• Contacting industry associations. Find industry associations in Canada and abroad that represent the goods you wish to import. These associations will often publish a list of their member companies that you can contact. 
• Contacting foreign trade offices. Foreign trade representatives are located in Canada to promote their country's goods and services, and to encourage trade between the two countries. The best way to find these trade offices is to contact the embassy or consulate of the country that you want to buy from.
• Attend trade shows. For a list of trade shows, refer to biztradeshows.com.

6. Negotiate With Suppliers

Once you have chosen a potential supplier, research the company's background thoroughly to ensure it has a sound reputation.

Trust is a major aspect of an importing relationship as your business will depend upon the supplier providing the goods you need. You should ask for references and contact each one to see what their experience has been with the supplier. At this stage, a face-to-face meeting with a potential supplier is usually required.

After you have made contact with suppliers, you can request a price list, catalogues, and samples. If the samples are acceptable, you can test them in the market. Be persistent when negotiating for free samples.

7. Research the CBSA's Requirements for Your Business

Before you’ll be allowed to import products into Canada, Canada Border Services Agency (CBSA) will require you to conform to certain requirements. These requirements are for both your business and the products that you want to import. For a full list of those requirements, contact the CBSA or attend their free Importing commercial goods into Canada seminar.

8. Calculate the Relevant Duties

Follow these steps to determine the import duties (if any) for your products: 

1. Determine the HS code for the product you’re going to import. The HS code is a 10-digit code that identifies your product. This code is universal at the 6-digit level. This means that the first six digits are the same in China as they are in Canada. To determine what the first six digits are, you can refer to the Canada Post website and use their search engine, or contact the CBSA direct. 
2. Determine where the product was manufactured. Keep in mind that this may not be the same place from where the product was shipped. 
3. Consult the CBSA Customs Tariff. Look up your product by the HS code and check to see what the import duty is. For instructions on how to interpret the Customs Tariff, contact the CBSA.

Note that, on top of the import duty, you will also need to pay GST on the products you import, as well as any inspection fees for CBSA to inspect your shipment, and customs brokerage fees if you use a customs broker.

If you’re importing alcohol, tobacco, or gasoline, you’ll also be charged excise duty. Contact CBSA for more information on excise duties.

9. Decide if You Will Use a Customs Broker 

You’ll need to decide if you are going use a customs broker, a company or person that is licensed by the CBSA to act on your behalf to help clear goods across the Canadian border.

Make sure the broker you select is reliable and financially reputable. Ask for references and call these companies to ask them if they were satisfied with the broker’s services. For advice on hiring a customs broker, contact the CBSA . 

Note that, even if you use a customs broker, as the importer, you’re responsible for all duties owing until either you or your broker pays them. This applies regardless of whether or not you paid the amount to your broker.

10. Clarify Your Payment Terms

It is important to clarify with your seller the terms of sale that outline the obligations, risks, and costs of the buyer and the seller. Incoterms are the most commonly agreed upon terms of sale in international business. Please visit the International Chambers of Commerce website for a full description of incoterms. 

11. Manage Your Payments

You will want to make sure that your suppliers get paid in full and on time. How you manage this will depend on how trustworthy your seller is.

The basic methods of payment, listed in order of most risky to least risky for the importer, are:

1. Cash in advance. Your company pays for the goods, usually by wire transfer, or sometimes by cheque or credit card, in advance of the shipment. Once you send the money, the supplier arranges to ship the product to you. 
2. Documentary Letter of Credit. Letters of Credit (LCs) are usually a good compromise for both the buyer and the seller, and are the most common payment method in international business. LCs work by relying on banks to receive and check shipping documents and guarantee payment. For more information on LCs, contact your business bank.
3. Open account. If you’re well established, very trustworthy, and have excellent credit worthiness, the seller may consider simply billing you, the buyer, and you’ll be expected to pay at a later date.

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Small Business BC: How to Import Commercial Goods to Canada (part of the Import series)

Want to find out more?

Why not attend Small Business BC's Are you thinking of Importing or Importing Regulations for Small Business seminars.

Alternatively why not book a one-to-one trade advisory consultation with our in-house specialist.  To book your Trade Advisory appointment, contact Client Services at 604-775-7085 or at 1-800-667-2272.

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