Do I need a Certificate of Origin?Canada has free trade agreements with forty-nine countries and extends preferential treatment to many others.
Trade agreements often allow Canadian consumers to import goods without paying customs duty, but you will sometimes need to present a certificate of origin in order to take advantage of a trade agreement.
To import goods, you will always need to tell CBSA where the goods were manufactured and where they were shipped from. This information is part of the customs declaration and is mandatory to provide, regardless of whether you will be claiming the terms of a trade agreement. You don’t need a certificate of origin to declare the origin of goods, but you often need a certificate to use the tariff treatment for a trade agreement. Essentially, if you are going to be claiming that your goods are duty-free because of where they were made, over a certain price threshold you will need a certificate of origin to support your claim.
Trade Agreements
Canada extends the Most Favoured Nation (MFN) Tariff to every country in the world except North Korea, Russia and Belarus. This is the tariff that charges the normal rate of duty. You do not need a certificate of origin to use the MFN tariff. In addition to the MFN, many countries also have trade agreements with Canada.
When Canada has a trade agreement with another country, it means that the Canadian government has agreed to reduce or eliminate the import duty on goods from that country. Often, but not always, this is in exchange for the beneficiary country agreeing to eliminate customs duty on goods imports from Canada.
For example, Canada has a tri-lateral free trade agreement with the USA and Mexico. Under the terms of the agreement, Canada will not collect duty on American and Mexican-made goods, and in exchange, the USA and Mexico will not collect duty on goods from Canada. When imported goods are subject to customs duties, it drives the price up for the consumer. Canada will miss out on potential revenue from waiving customs duties from the USA and Mexico, but by ensuring our goods can be exported to those countries without import duty, American and Mexican consumers will have a greater incentive to buy Canadian goods because they can be competitively priced. Trade agreements make imported goods cheaper for Canadian consumers, and make Canadian goods more competitive in foreign markets.
Trade agreements aren’t always reciprocal. For example, Canada extends a tariff treatment called the Least Developed Country Tariff (LDCT) to forty-nine of the poorest countries in the world. The objectives of the LDCT are to “reduce poverty in the world’s poorest countries; promote investment and development in the world’s poorest countries; and enhance economic development through the reduction of trade barriers by providing enhanced opportunities for access to the Canadian market.”
Under the LDCT, Canada waives or reduces the duty on most goods from the beneficiary countries, but there is no expectation that, say, Yemen or Togo will reciprocate by waiving customs duty on Canadian goods.
Customs Duty
Not all imported products attract customs duty. Books, for example, have a 0% rate of duty regardless of where they are imported from, as do most medical supplies, fabrics, and machinery parts. Some examples of goods that do incur customs duty include:
• Denim jeans: 18%
• Umbrellas: 7.5%
• Ukeleles and banjos: 6%
• Wooden bunk beds: 9.5%
• Cotton pillows: 14%
• Christmas lights: 7%
The rate of customs duty will depend on the exact HS tariff classification of the imported item. If you are importing an item that doesn’t attract any duty, even if it comes from a country that has a trade agreement with Canada, you can choose to use the Most Favoured Nation tariff and not present a certificate of origin.
Low Value and High Value Shipments
Goods valued at $3300 CAD or less are considered to be Low Value Shipments and do not need certificates of origin. When you import low-value goods from any country that has a trade agreement with Canada, you can claim your goods duty-free without a certificate of origin.
Casual and Personal Goods
You do not need to provide a certificate of origin for goods that are being imported for your personal use. Certificates of origin are only required for goods that are being resold or used for commercial, industrial, institutional or occupational purposes. More information about the rules of origin for casual and personal goods can be found here.
Place of Export
Most free trade agreements specify that the goods have to not only be manufactured in one of the countries that have signed the agreement, but also shipped from a signatory country. For example, Canada has a free trade agreement with South Korea, but if you buy goods that were made in South Korea from a company in the United States, and the goods are shipped from the USA, you cannot use the Canada-Korea Trade Agreement to import your goods duty-free. You can only use the MFN tariff and pay any duty that the goods attract. To use the Canada-Korea Trade Agreement tariff, the goods must be made in South Korea and also shipped from South Korea.
Canada, the USA and Mexico are all signatories of the same trade agreement, so if a product was made in Mexico and shipped from the USA it can still use the trade agreement to be imported duty-free. Canada also has a single trade agreement with all the member countries of the European Union, so if a product was made in Sweden and shipped from Spain, or made in Italy and shipped from Portugal, the trade agreement is still applicable. But a product made in Italy and shipped from Japan would not be able to use the agreement, because Japan is not signed to the same trade agreement.
What Counts as a Certificate of Origin?
It depends on the trade agreement. Many trade agreements have their own certificate template, which are usually available online. The Canada-US-Mexico Agreement, for example, requires a specific certificate of origin for goods over $3300. If you are purchasing from an exporter who does business with Canadian importers regularly, they might already have copies of their certificates of origin available. For some countries, such as countries which are beneficiaries of the LDCT and the Commonwealth Caribbean Countries, an exporter’s statement of origin can be used instead of a certificate of origin. For goods from Australia, New Zealand, or any of the countries which are beneficiaries of the General Tariff (GT), a separate certificate is not required and a statement printed on the invoice will suffice. A full list of requirements for different countries is available online here.
So, Do I Need a Certificate of Origin or Not?
In general, you only need a certificate of origin if:
• You are importing goods for commercial use,
• Your shipment is valued at greater than $3300 CAD,
• The goods were both manufactured and shipped from a country that has a trade agreement with Canada,
• The terms of Canada’s trade agreement with the country of origin require a certificate of origin, and
• The goods are normally subject to customs duty.
When in doubt, ask your customs broker!
Every shipment is a little different, and your broker should be able to advise you of whether a certificate is needed and provide you with blank template forms. Certificates of origin are usually filled out by the seller, and your broker can help explain the requirements to your vendors and assist them if they have any questions about how to fill out forms.
If you have any questions about certificates of origin, we’re here to help .
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
Canada has free trade agreements with forty-nine countries and extends preferential treatment to many others.
Trade agreements often allow Canadian consumers to import goods without paying customs duty, but you will sometimes need to present a certificate of origin in order to take advantage of a trade agreement.
To import goods, you will always need to tell CBSA where the goods were manufactured and where they were shipped from. This information is part of the customs declaration and is mandatory to provide, regardless of whether you will be claiming the terms of a trade agreement. You don’t need a certificate of origin to declare the origin of goods, but you often need a certificate to use the tariff treatment for a trade agreement. Essentially, if you are going to be claiming that your goods are duty-free because of where they were made, over a certain price threshold you will need a certificate of origin to support your claim.
Trade Agreements
Canada extends the Most Favoured Nation (MFN) Tariff to every country in the world except North Korea, Russia and Belarus. This is the tariff that charges the normal rate of duty. You do not need a certificate of origin to use the MFN tariff. In addition to the MFN, many countries also have trade agreements with Canada.
When Canada has a trade agreement with another country, it means that the Canadian government has agreed to reduce or eliminate the import duty on goods from that country. Often, but not always, this is in exchange for the beneficiary country agreeing to eliminate customs duty on goods imports from Canada.
For example, Canada has a tri-lateral free trade agreement with the USA and Mexico. Under the terms of the agreement, Canada will not collect duty on American and Mexican-made goods, and in exchange, the USA and Mexico will not collect duty on goods from Canada. When imported goods are subject to customs duties, it drives the price up for the consumer. Canada will miss out on potential revenue from waiving customs duties from the USA and Mexico, but by ensuring our goods can be exported to those countries without import duty, American and Mexican consumers will have a greater incentive to buy Canadian goods because they can be competitively priced. Trade agreements make imported goods cheaper for Canadian consumers, and make Canadian goods more competitive in foreign markets.
Trade agreements aren’t always reciprocal. For example, Canada extends a tariff treatment called the Least Developed Country Tariff (LDCT) to forty-nine of the poorest countries in the world. The objectives of the LDCT are to “reduce poverty in the world’s poorest countries; promote investment and development in the world’s poorest countries; and enhance economic development through the reduction of trade barriers by providing enhanced opportunities for access to the Canadian market.”
Under the LDCT, Canada waives or reduces the duty on most goods from the beneficiary countries, but there is no expectation that, say, Yemen or Togo will reciprocate by waiving customs duty on Canadian goods.
Customs Duty
Not all imported products attract customs duty. Books, for example, have a 0% rate of duty regardless of where they are imported from, as do most medical supplies, fabrics, and machinery parts. Some examples of goods that do incur customs duty include:
• Denim jeans: 18%
• Umbrellas: 7.5%
• Ukeleles and banjos: 6%
• Wooden bunk beds: 9.5%
• Cotton pillows: 14%
• Christmas lights: 7%
The rate of customs duty will depend on the exact HS tariff classification of the imported item. If you are importing an item that doesn’t attract any duty, even if it comes from a country that has a trade agreement with Canada, you can choose to use the Most Favoured Nation tariff and not present a certificate of origin.
Low Value and High Value Shipments
Goods valued at $3300 CAD or less are considered to be Low Value Shipments and do not need certificates of origin. When you import low-value goods from any country that has a trade agreement with Canada, you can claim your goods duty-free without a certificate of origin.
Casual and Personal Goods
You do not need to provide a certificate of origin for goods that are being imported for your personal use. Certificates of origin are only required for goods that are being resold or used for commercial, industrial, institutional or occupational purposes. More information about the rules of origin for casual and personal goods can be found here.
Place of Export
Most free trade agreements specify that the goods have to not only be manufactured in one of the countries that have signed the agreement, but also shipped from a signatory country. For example, Canada has a free trade agreement with South Korea, but if you buy goods that were made in South Korea from a company in the United States, and the goods are shipped from the USA, you cannot use the Canada-Korea Trade Agreement to import your goods duty-free. You can only use the MFN tariff and pay any duty that the goods attract. To use the Canada-Korea Trade Agreement tariff, the goods must be made in South Korea and also shipped from South Korea.
Canada, the USA and Mexico are all signatories of the same trade agreement, so if a product was made in Mexico and shipped from the USA it can still use the trade agreement to be imported duty-free. Canada also has a single trade agreement with all the member countries of the European Union, so if a product was made in Sweden and shipped from Spain, or made in Italy and shipped from Portugal, the trade agreement is still applicable. But a product made in Italy and shipped from Japan would not be able to use the agreement, because Japan is not signed to the same trade agreement.
What Counts as a Certificate of Origin?
It depends on the trade agreement. Many trade agreements have their own certificate template, which are usually available online. The Canada-US-Mexico Agreement, for example, requires a specific certificate of origin for goods over $3300. If you are purchasing from an exporter who does business with Canadian importers regularly, they might already have copies of their certificates of origin available. For some countries, such as countries which are beneficiaries of the LDCT and the Commonwealth Caribbean Countries, an exporter’s statement of origin can be used instead of a certificate of origin. For goods from Australia, New Zealand, or any of the countries which are beneficiaries of the General Tariff (GT), a separate certificate is not required and a statement printed on the invoice will suffice. A full list of requirements for different countries is available online here.
So, Do I Need a Certificate of Origin or Not?
In general, you only need a certificate of origin if:
• You are importing goods for commercial use,
• Your shipment is valued at greater than $3300 CAD,
• The goods were both manufactured and shipped from a country that has a trade agreement with Canada,
• The terms of Canada’s trade agreement with the country of origin require a certificate of origin, and
• The goods are normally subject to customs duty.
When in doubt, ask your customs broker!
Every shipment is a little different, and your broker should be able to advise you of whether a certificate is needed and provide you with blank template forms. Certificates of origin are usually filled out by the seller, and your broker can help explain the requirements to your vendors and assist them if they have any questions about how to fill out forms.
If you have any questions about certificates of origin, we’re here to help .
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
