Canada oh Canada. Shipping to and from Canada

Shipping Truckload or LTL shipments to Canada is pretty easy for someone who has been doing it for decades, but for a U.S company shipping to a client in Canada for the first time the rules and paperwork requirements can be pretty daunting.

I have been fortunate to have logistics experience on both sides of the border and have benefited from years of experience in dealing with the Canadian Border Services Agency and Revenue Canada while bringing a multitude of commodities in and out of Canada.

The transportation of materials in and out of Canada has become seamless, a routine and easy task for truckload haulers and LTL Carriers, but for many U.S manufacturers, distributors and e commerce retailers the paperwork and customs requirements can be a bit confusing.

We have a client who sells auto part kits and we recently shipped an LTL shipment to the province of Alberta for him. He was here at our offices for over an hour asking questions about Canada shipping. One thing he didn’t understand was how it was possible for some U.S Companies to sell items and have them delivered to the Canadian Customers door without the customer having to pay duty, but he had to ask his customer to pay the duty whenever he shipped to them?

In the late 1990s I was tasked by a U.S based global electronics manufacturer to setup a Non Resident Importer account in Canada (NRI). An NRI account is a tax identification number given by Revenue Canada (The IRS of Canada) to your U.S Business that allows you to operate as a Canadian business.

To justify the expense and time in setting up an NRI you can’t just ship a few times a year into Canada from the US. For a business that does ship frequently into Canada an NRI account is the way to go because you can pay the duties and taxes associated with your Canadian import allowing you to give your Canadian customer an all in price to their door.

For the majority of our clients that don’t have NRI accounts, there is no way to escape the Canadian Customer paying the duty. Gateway Optimum Transportation has a great partnership with a Canadian Customs Brokerage firm that give clients calling in under our account name a discount on clearance fees and services. All the Canadian purchaser has to do is fill out a Power of Attorney, provide their Canadian Tax ID and Pay the duty and fee for the shipment.

I tell our clients most Canadian purchasers are pretty familiar with the process and already have a preferred broker they have a Power of Attorney with. Gateway can ship the item to the door of the customer but it is the customer’s responsibility to pay the taxes and fees.

Another difficulty for our clients without an NRI is they want to know how much more their customer is going to have to pay for their item. Tax rates in Canada are determined by jurisdiction. Each Province has their own Tax Rate Structure.

There are three different types of tax rates in Canada they are: HST, GST and PST

If the province has a HST then it is only one tax. The other provinces have a combination of PST and GST and then there is also a province that only has a GST.

HST is Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador.

GST and PST is British Columbia, Sascatchewan, Manitoba and Quebec

GST only is Alberta.

Having the Canadian purchaser have to pay the customs fees and duties does not mean it is difficult for a US seller to make the sale, like I mentioned previously most Canadian purchasers have already done this before. As far as taxation payment is concerned you are either a US NRI entity in Canada or the Recipient in Canada has to pay the import tax and fees, no way around it.

Another question in regards to selling to Canadian buyers your US goods is the paperwork involved. If the item qualifies as a NAFTA item certain commodities are exempt from taxation and others have a reduced rate. A NAFTA Certificate for the items must accompany the shipment to qualify for preferential treatment. Most are submitted electronically.

Freight from the US moving into Canada will either travel on a PARS or in bond. PARS is the Pre-arrival Review System which allows CBSA to review and process the shipment through customs before it arrives, which speeds up the clearance and delivery process.

Most Gateway O.T shipments travel on a PARS which has its own separate bar code attached to the BOL and or commercial Invoice. This is known as release on minimal documentation (RMD). We specifically route with carrier’s setup on the PARS system. All shipments to Canada must also have a Commercial Invoice that represents the sale value of the goods sold.

It is not difficult to sell and ship items to customers in Canada from the U.S. if you know what you need. Gateway O.T has the experience and expertise to make your Canadian shipments delivery go seamless. Hopefully this article has helped you with a basic understanding of how to ship to Canada.

For more resources for shipping to Canada from the U.S visit http://www.gatewaycrateandfreight.com/shipping/canada.html

Gateway Optimum Transportation and Gateway Crate and Freight is an asset light 3PL managing International and Domestic Freight for Corporate and Residential Customers. Visit www.gatewaycrateandfreight.com and www.gatewayot.com or call Toll Free 855-474-4685 for more info

Steven Tittle is the Owner of Gateway O.T (3Pl) and has experience setting up NRI accounts in Canada as well as managing Canadian Distribution warehouses for a global electronics manufacturer as well as managing logistics for a global distributor of consumer cosmetics based in Canada.