The trade incentive programs keep Canadian companies competitive by providing relief from duties under special circumstances. The Canada Border Services Agency has a variety of programs that enable it to waive (relieve), postpone (defer) or refund (drawback) some or all of the duties and taxes that would otherwise be payable.
Goods entering Canada are normally subject to duty and/or taxes. However, legislative provisions, such as tariff item No. 9993.00.00, provide relief from the payment of applicable duties for goods that enter Canada on a temporary basis, such as goods being repaired in Canada or goods imported temporarily for training or demonstration purposes. There are also several provisions that provide for the full or partial payment of excise taxes, including the goods and services tax/harmonized sales tax (GST/HST), for goods that are temporarily imported under certain circumstances. Although temporary importations may qualify for relief from duties and taxes, they may need to be documented on a Form E29B, Temporary Admission Permit, and a refundable security deposit may be required.
Canada is a signatory to the international Customs Convention on the A.T.A. Carnet for the Temporary Admission of Goods. This convention provides an alternative to Canada's Temporary Admission Permit (Form E29B) and eliminates the need to post a security deposit at the time of importation. Importers may obtain an A.T.A. Carnet in the country of export. A.T.A. Carnets are not issued by customs administrations. In those countries that participate in the Convention, A.T.A. Carnets are generally issued by the national chamber of commerce. Each country has only one guaranteeing association, but it may have more than one issuing association. Security is posted through the guaranteeing association in the issuing country. In Canada, the guaranteeing association is the Canadian Chamber of Commerce. For more information about A.T.A. Carnets, please visit the Chamber of Commerce's website.
Canadian Goods Abroad program
When Canadian goods are exported for repair, alteration, additions or further processing, the Customs Act generally requires that they be subject to duties and taxes on the full value of the goods at the time of their return to Canada. However, the Canadian Goods Abroad program allows for the relief of duties on the "Canadian" portion of the value of the goods. Under this program, the duty is payable only on the value added to the Canadian goods in the form of labour or additional material. Similarly, under the Value of Imported Goods (GST/HST) Regulations, the GST/HST is payable only on the value of the processing performed outside of Canada.
- Memorandum D8-2-1, Canadian Goods Abroad Program
- Memorandum D8-2-4, Canadian Goods Abroad Program – Emergency Repairs
- Memorandum D8-2-6, The Outward Processing Remission Order (Textiles and Apparel) Program
- Memorandum D8-2-10, Goods Returning to Canada Having Been Repaired Outside of Canada
- Memorandum D8-2-11, Goods Returning to Canada After Being Altered or Worked on Outside Canada
- Memorandum D8-2-25, Canadian Vessels Repaired or Altered in the United States, Mexico, Chile, Israel or Another CIFTA Beneficiary, Colombia, Costa Rica, Peru, Jordan, Panama, Iceland, Liechtenstein, Switzerland or Norway
- Memorandum D8-2-26, Goods Returned After Repair or Alteration in the United States, Mexico, Chile, Israel or Another CIFTA Beneficiary, Colombia, Costa Rica, Peru, Jordan or Panama
Duty Deferral Program
The Duty Deferral Program comprises three options, each with particular advantages:
The Customs Bonded Warehouse Program enables you to defer paying all duties and taxes on goods until the goods are released for Canadian consumption or exported. A customs bonded warehouse is a licensed and regulated facility used to store imported goods before the Canada Border Services Agency releases them, and imported and domestic goods destined for export.
The Duties Relief Program relieves you from having to pay duties on imported goods if you will eventually re-export the goods either in the same condition or after using, consuming or expending them to process other goods.
The Drawback Program has the same advantages as the Duties Relief Program. The only difference is that the Drawback Program is for people who have already paid the duties and are asking for a drawback (refund) of those duties as authorized under the Customs Tariff.
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