In May 2023, the Canada Border Services Agency (CBSA) introduced amendments (Amendments) to the Valuation for Duty Regulations which, if passed, would alter existing Canadian customs valuation rules.
The proposed amendments outline which “sale” is to be used when calculating the value for duty of imported goods to Canada. The Amendments propose a “last sale” approach to customs valuation, which has the potential to increase the declared value for duty of imported goods, directly increasing duties and taxes owing, and indirectly increasing the cost of doing business in Canada. To read more about the Amendments and the proposed “last sale” approach, read our June 2023 blog post here.
The Amendments were published in Part 1 of the Canada Gazette for a 30-day consultation period which was subsequently extended for an additional 30-days, and closed on July 26, 2023.
On October 3, 2023, 431 public comments were published by the CBSA. You can read the comments here. Industry members stated the Amendments:
- Do not meet their stated objectives;
- Would negatively impact small businesses in Canada and other resident importers;
- Are incompatible with Canada’s international customs obligations;
- Would increase costs to the Canadian economy, which would outweigh the additional duties collected from the new customs valuation rules;
- Make compliance extremely difficult;
- Are uncertain and unpredictable for importers; and
- Will likely have many negative and unintended consequences for importers.
The CBSA consultation notice has been updated and acknowledges the “substantial feedback” received, stating that “[the CBSA] will continue to review all comments and take them into consideration for any further amendments to the proposal. [The CBSA] will communicate directly with respondents, if required, and produce a summary that [the CBSA] will publish in the coming months.” Read the CBSA consultation notice here.
At this time, the CBSA has not issued any public statements regarding whether the Amendments will be further revised, come into force as-drafted, or abandoned altogether.
