Guidance

Exporting to Canada

A guide for British businesses interested in selling goods and services in Canada.

Visit great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.

2017 ease of doing business ranking for Canada by World Bank

Source: World Bank: Ease of doing business 2017.

Doing business in Canada

The UK exported £8.2 billion of goods and services to Canada in 2016, making it the UK’s eighth biggest export market outside the EU. The UK is Canada’s seventh largest source of goods imports and second largest services trading partner.

Canada has a stable political environment and a strong record of economic growth. It offers opportunities for UK companies across all sectors.

The implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) opens up further opportunities for UK companies as well as removing barriers to trade.

CETA also gives UK investors assured preferential access into the USA and Mexico for goods produced in Canada that comply with rules of origin requirements under the North American Free Trade Agreement (NAFTA).

Benefits for UK businesses

There are a number of reasons to choose Canada as an export destination:

  • it has similar legal and business practices to the UK
  • there are fewer trade restrictions due to the CETA agreement
  • it offers close proximity and easier access to the US market
  • it has a strong business and consumer base
  • like the UK, it is considered to have one of the most transparent legislatures, with Canada ranked as one of the least corrupt nations in the world

EU-Canada Comprehensive Economic and Trade Agreement (CETA)

CETA will help strengthen trade between Canada and the UK.

Overall the CETA agreement will:

  • eliminate nearly all Canadian import duties
  • create more opportunities to bid for public contracts in Canada
  • make it easier to access Canadian services and investment markets
  • improve the framework for temporary movement of key company personnel and service-providers between the EU and Canada
  • strengthen the Canadian intellectual property environment
  • increase cooperation between European and Canadian standards setting bodies

Specifically the CETA agreement:

  • ends customs tariffs on 98% of goods and eliminates 90.9% of tariffs on agricultural products
  • bases fees charged by local liquor boards on the volume (rather than value) of alcohol, providing a more level playing field for UK exporters of high-value products
  • abolishes Canada’s requirement to blend imported bulk spirits with local spirits before bottling
  • provides improved opportunities to bid on procurement contracts at all levels of government
  • strengthens patent protection for pharmaceutical products

Challenges of doing business in Canada

Canada’s government has a federal structure which means that business activities and taxation are affected by regulation and laws at federal, provincial and local levels. This can make doing business complicated for first time exporters to the country.

The Canada Border Services Agency provides a step-by-step guide for importers of goods into the country, which will help you understand the requirements.

Additionally you should be aware that:

Top goods and services imports into Canada

UN Comtrade ranks Canada’s top goods imports as:

  1. vehicles (not railway or tramway vehicles)
  2. boilers and machinery
  3. electrical and electronic equipment
  4. distillation products and mineral fuels, including oil
  5. plastics and plastic products
  6. optical, technical, photographic and medical apparatus
  7. pharmaceuticals
  8. pearls, precious stones, metals and coins
  9. furniture, lighting, signs and prefabricated buildings
  10. iron or steel products

UN Comtrade ranks Canada’s top services imports as:

  1. travel
  2. transport
  3. government services

Researching the Canadian market

Market research and planning are important before starting to sell your products and services in Canada. Doing so will help prevent mistakes and increase the potential for profits.

Canada’s federal structure means that there are different regulatory structures in place in each province or territory. Therefore good local research is needed to ensure you meet the legal requirements for your products at all appropriate levels of government control.

In addition, you need to research market entry requirements in specific provinces or territories for certain products, using desk research or visits to the country.

You need to determine whether:

  • there is a market for your product or service
  • your pricing is competitive
  • you need to change your product, its packaging and marketing due to cultural considerations
  • you need to adapt your business model

Find out more about researching an overseas market.

Visit DIT’s events portal to find upcoming events in and about Canada.

DIT’s trade specialists can help you commission services from local experts in Canada. This includes:

  • country and sector advice
  • local market research
  • support during overseas visits
  • identification of possible business partners
  • preparation for exhibitions and events

Opportunities for UK businesses in Canada

DIT provides free international export sales leads from its worldwide network. Find export opportunities in Canada.

Government tenders in Canada

You must register as a supplier and obtain a Procurement Business Number (PBN) to access opportunities with the federal government.

Access federal tenders at Buyandsell.gc.ca.

Further opportunities are available through Canada’s state governments and the broader public sector. You can find out about selling to Canada’s provincial or territorial and local governments on the Canadian Business Network.

Access procurement opportunities from other government tender sites in Canada.

Getting started in the Canadian market

Once you’ve done some initial research you should create an export plan and identify your best route to market.

Consult local lawyers when you enter a new market to avoid costly mistakes and ensure you start out in the way that is best suited to your sector of activity.

Direct exports and sales in Canada

Selling directly to customers means you handle all the logistics of marketing, selling, sending your goods overseas and getting paid. Direct exports are possible if you’re selling online or responding to enquiries from Canadian companies.

Selling in Canada through local agents, distributors or wholesalers

Distance and time zone issues may mean it’s more effective to use local representation.

A local point of contact may be important if you need to service customer queries and problems regarding your product or service. Options include using an agent, distributor or wholesaler.

Canada is a big country by land mass. If you’re looking to use an agent you should check they’re based near to your potential buyers.

The DIT’s trade specialists can help you identify local representatives for your products in Canada.

Setting up a company or office in Canada

You can incorporate your business federally or through Canada’s provinces or territories. You should get advice from local lawyers and accountants as to which option best suits your business as there are tax implications depending on which option you choose.

Find out more about setting up a business in Canada.

Find out about different business structures and how to register with provincial and territorial governments.

If you choose provincial or territorial incorporation you must also register with the Canada Revenue Agency (CRA) to get a business number.

However, if you will not need to notify the CRA if you incorporate with the federal government.

Find out more about federal incorporation.

Québec requires a business operating in the province to use a French as well as an English version of its name.

Online selling to Canada

A digital presence can help you gain new customers 24 hours a day, often at low cost. Like many developed economies, online purchasing is becoming increasingly popular in Canada especially with consumers. Companies and government departments are also increasingly likely to purchase small orders over the Internet.

Find out more about reaching new customers online.

Use DIT’s selling online overseas tool to get exclusive online deals for your business in Canada that have been specially negotiated by the UK government.

Find out how DIT’s E-Exporting programme can help you export your products overseas.

You must not charge Value Added Tax (VAT) for online sales to Canada. You must fill out a customs declaration when you ship the products and keep proof of export.

Licensing or franchising in Canada

You can license a product or service to be sold in Canada. It’s is a cheap way to enter the market as there are no set-up costs apart from the cost of a legal agreement.

You should undertake due diligence on licensees to ensure your intellectual property (IP) rights are protected.

Find out more about licensing IP.

Alberta, British Colombia, Manitoba, New Brunswick, Ontario and Prince Edward Island are the only provinces in Canada with legislation on franchising. There is no federal legislation.

Visit the international section of the British Franchise Association for more information on franchising.

Getting finance to fulfil an export contract to Canada

To make it easier to fulfil an export contract and grow your business, schemes are available to UK companies selling products and services in Canada. Contact your bank or specialist financial organisation for assistance.

UK Export Finance (UKEF) has significant risk capacity to support exports to Canada.

Contact one of UKEF’s export finance managers for a free and impartial consultation. They can help check you are getting the appropriate financial support and, if not, explore how to bridge any gaps.

Getting paid in Canada

You may wish to talk to a specialist about finance, including how to get paid in Canada. This could be a bank, accountant, or you can contact the DIT team in Canada to help find a financial adviser in Canada.

Your contract will specify the terms for payment. You need to use secure terms of payment in Canada through a letter of credit, cash, or partial payment in advance.

You should only use open account payment terms (delivery of goods or services before payment) when you have an established trading relationship.

Customers in Canada may require credit terms to buy your products and services. Payment conditions must be factored into prices. For business-to-business transactions these can range from immediate payments on receipt of goods (often with a negotiated small discount) to a negotiated 60-day payment.

Payment risks in Canada

UKEF helps UK companies get paid by insuring against buyer default.

Speak to one of UKEF’s export finance managers for a free and impartial consultation on your insurance options or contact one of UKEF’s approved export insurance brokers.

Currency risks when exporting to Canada

If you have not fixed your exchange rate you have not fixed your price. You should consider whether the best option for you is to agree terms in sterling or Canadian dollars in any contract. You should also consider getting expert financial advice on exchange rates (sometimes called FX).

Transferring money from Canada

In principle, capital can be moved in and out of Canada without any restrictions.

Currency transfers of CAD10,000 or more must be reported to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

English common law is the basis for the law in 9 provinces and 3 territories. French civil law is the basis of the law in Québec.

Canada is a federal state. Federal jurisdiction tends to be narrowly focussed on particular kinds of business, property and behaviour.

Your business in Canada will be subject to both federal and provincial or territorial laws.

Some industry sectors are regulated in Canada. Find out more about the specific regulations in force and the permits/licences needed.

Contact the DIT team in Canada to help find tax and legal advisers before entering into agreements in Canada.

Controlled goods export licences for Canada

You must have a licence to supply any goods, software, technical information and technology to Canada which are on the UK Strategic Export Control Lists.

There are a number of open licences available for exporting military and certain dual use controlled items to Canada with a straightforward registration process. If you can’t use an open licence you’ll have to apply for a standard licence.

Check if you need an export licence and apply on SPIRE.

Some other products, including consumer items, may need additional certification or licensing.

Import restrictions into Canada

Certain goods cannot be imported into Canada.

Find out about prohibited imports into Canada.

Other goods are subject to import controls.

Consumer protection in Canada

If you’re selling to consumers (rather than businesses) you must comply with Canada’s consumer protection laws, which guarantee consumer rights when buying goods and services.

Consumer rights across Canada can be different as legislation is set at federal, provincial and territorial level.

You must check with the federal government and the relevant province or territory to see if you’re complying with consumer protection legislation.

Professional indemnity insurance for doing business in Canada

If you provide a service and want to protect yourself against negligence claims from clients or third parties, you may wish to consider taking out professional indemnity insurance.

Standards and technical regulations in Canada

You must check that your product, process or service conforms to the legal requirements set out in the relevant Canadian standard.

Suppliers and manufacturers have an obligation to make sure products are safe. Products must meet relevant safety standards, have clear instructions for proper use and include warnings against possible misuse.

The Standards Council of Canada (SCC) oversees Canada’s National Standards System which implements standards in Canada.

Canada has 4 accredited standards development organisations. These are:

Product liability insurance for doing business in Canada

You should consider taking out product liability insurance if you manufacture or supply a physical product.

Packaging regulation in Canada

Packaging must meet the requirements that are set out in Canada’s Consumer Packaging and Labeling Act. Consumer products must comply with the Consumer Packaging and Labelling Regulations.

Used sacks, bags, canvas and other similar packing materials cannot be used as packaging.

Find out more about regulations for wood packaging.

Labelling your products for Canada

Labels for consumer goods must include:

  • product identity declaration in both French and English
  • net quantity in metric units
  • supplier’s name and address

Products sold in Québec must have French labelling displayed in equal prominence to English. This requirement extends to:

  • all labelling
  • warranty certificates
  • product manuals
  • instructions for use

Find out about food labelling requirements in Canada.

Find out about labelling for textiles and precious metals.

Any claims about a product being ‘environmentally friendly’ must meet Canada’s guiding principles on use of environmental labelling.

Read a guide for industry and advertisers on environmental claims in Canada.

Protecting your intellectual property (IP) in Canada

Trademarks, designs, patents and copyright are the principal forms of IP available under common law in Canada. They are all governed by legislation.

Find out about Canada’s IP laws.

Read the UK Intellectual Property Office’s (IPO) guidance on exporting your IP.

Taxation in Canada

The UK and Canada have signed a double taxation agreement.

This agreement should, in most cases, prevent any double tax liability from UK and Canadian authorities over the same income.

UK companies operating in Canada will be subject to local taxation requirements.

The Canada Revenue Agency (CRA) has overall responsibility for taxation in Canada, but this responsibility is shared with the provinces and territories.

Value Added Tax (VAT) on goods exported to Canada

You can zero-rate the sale of your goods to Canada, provided you get and keep evidence of your export, and comply with all other laws. You must also make sure the goods are exported, and you must get the evidence within 3 months from the time of sale.

Find more information on VAT in non-EU markets.

Goods and services tax (GST) and harmonised sales tax (HST) in Canada

Canada’s goods and services tax is levied at 5% for most Canadian provinces. GST is imposed on the supply of goods and services purchased in Canada, and it’s often included in the price of sales to customers.

HST is a consumption tax, used in provinces where both the federal GST and the regional provincial sales tax (PST) have been combined into a single value added sales tax. HST is charged at 13% in Ontario, and is levied at 15% in:

  • New Brunswick
  • Newfoundland and Labrador
  • Nova Scotia
  • Prince Edward Island

Québec places an additional levy called Québec Sales Tax (QST) on top of GST.

Canada’s provinces and territories can exempt different items from these taxes.

Excise duty in Canada

You should check you’ve paid excise duty on any alcohol, fuel, tobacco or other excise equivalent products you send to Canada.

Find out more about excise duty and duty drawback outside the EU.

Find out about excise duty in Canada.

Company and corporate tax in Canada

The basic federal corporation tax rate is 38% of taxable income. However, after potential abatements and reductions the net rate is 15%.

Provinces and territories operate a dual tax system setting their own higher and lower income tax rates.

Alberta and Québec (in French only) do not have corporate tax collection agreements with the CRA.

Find out more about federal, provincial or territories corporation tax rates in Canada.

Customs and documentation in Canada

Complying with HMRC regulations to export to Canada

You must make export declarations to HMRC through the National Export System (NES) to export your goods to Canada.

Find out how to declare your exports to Canada through the NES.

You must classify your goods as part of the declaration, including a commodity code and a Customs Procedure Code (CPC).

Find commodity codes and other measures applying to exports in the UK Trade Tariff.

Contact the HMRC Tariff Classification Service for more help on tariffs.

You must declare any goods that you take with you in your baggage to sell outside the EU.

Benefiting from preferential tariff treatment in Canada

UK goods exported to Canada may benefit from new preferential duties if they meet rules of origin requirements.

An origin declaration must accompany the goods, and appear on a commercial document (excluding the bill of lading) or invoice. You must use the origin declaration text on p485 of Council Decision (EU) 2017/37.

Contact dutyliability.policy@hmrc.gsi.gov.uk if you have any queries about the implementation of preferential duty rates as a result of the CETA agreement.

You must be a registered exporter to make an origin declaration for consignments above €6,000. You must use your registered exporter number (as the customs authorisation number) in your origin declaration.

If the consignment value falls below €6,000 you should include your registered exporter or approved exporter number in the origin declaration, if you have one. Otherwise the reference to the customs authorisation number on the origin declaration must be deleted or left blank.

HMRC has pre-registered all UK exporters holding a valid Economic Operator Registration and Identification (EORI) number who exported goods to Canada during 1 December 2015 to 1 December 2016.

Approved exporter numbers are valid until 21 December 2017. A registered exporter number will be required after 21 December 2017 to support preferential duty claims

If you have not been pre-registered you can apply to be become a registered exporter. You’ll need:

  • your EORI number
  • your approved exporter number (if you have one)
  • the first 2 or 4 digits of the commodity codes of the goods that you trade in

Temporary export of goods to Canada

You can use an ATA (temporary admission) Carnet to simplify the customs procedures needed to temporarily take goods into Canada. Temporary exports mean you can take your products into another country under strict time limits, usually as commercial samples or for display at exhibitions.

You’ll need a licence to temporarily take any goods on the UK export controls lists to Canada. This includes goods for:

  • demonstration
  • exhibition
  • use in repair or maintenance

Check if you can use an Open Licence for your temporary export.

If the items aren’t being returned to the UK, you’ll need a permanent export licence.

Find out more about temporary imports into Canada.

Customs in Canada

The Canada Border Services Agency (CBSA) regulates all goods imported into Canada. CBSA provides a step-by-step guide to importing commercial goods into Canada.

Find out which federal government departments and agencies are responsible for granting commodity-specific import permits or certificates.

The EU’s Market Access Database provides information on import conditions into Canada, including:

  • import tariffs
  • customs clearance formalities and documentation
  • sanitary (animal related) and phytosanitary (plant related) restrictions

Documentation in Canada

Documents needed to clear customs include:

  • a Canada customs invoice or equivalent
  • form B3, Canada customs coding form
  • a cargo control document
  • a bill of lading
  • relevant permits or certificates

Help with shipping your goods to Canada

If you’re not knowledgeable about international shipping procedures, you can use a freight forwarder to move your goods. A forwarder should have extensive knowledge of documentation requirements, regulations, transportation costs and banking practices in Canada.

Find out about shipping your goods to international markets using a freight forwarder.

Find freight forwarding companies to help you transport your goods to Canada via the British International Freight Association (BIFA) or the Freight Transport Association (FTA).

Posting goods to Canada

Find out about sending goods by post to Canada.

Shipping dangerous goods to Canada

Special rules apply if you’re shipping dangerous goods to Canada.

Terms of delivery to Canada

You must have a clear written contract to minimise the risk of misunderstanding in international commercial transactions.

Incoterms are a series of widely used commercial terms for international trade in goods, which set out:

  • where the goods will be delivered
  • who arranges transport
  • who is responsible for insuring the goods, and who pays for insurance
  • who handles customs procedures, and who pays any duties and taxes

Find out more about agreements on terms of delivery using Incoterms.

The International Chamber of Commerce (ICC) publishes the Incoterms Rules.

Incoterms do not cover contracts for the delivery of services.

Contracts for the international delivery of services should focus on desired outcomes such as what the service should achieve. This should be part of a service level agreement in your contract.

Reporting a trade barrier in Canada

Regulatory, tariff or technical barriers in an overseas market can make imported goods and services less competitive than those produced locally.

Language and culture in Canada

Canada was the first country in the world to adopt an official policy of multiculturalism. It’s officially a bilingual country. The official languages spoken are English and French, but English is widely spoken outside of Québec province.

French is the language of business in Québec under provincial law. Therefore you may need an interpreter for business meetings in Québec if you do not speak French fluently.

Both French and English translations should be included on business cards in Québec.

Businesses with 50 employees or more in Québec must register with the Québec French Language Office and provide satisfactory evidence to the government that workplace communications are in French.

First-name terms tend to be the norm in most business situations. However, culture does vary between Canada’s provinces and territories as Canadians can identify very closely with their province.

Business communication is quite direct in Canada. Your own communications should also be direct and succinct.

Entry requirements for Canada

You must have a valid passport and an Electronic Travel Authorization (eTA) before travelling to Canada.

Find out about applying for an eTA.

Travel advice for Canada

If you’re travelling to Canada for business, check the Foreign and Commonwealth Office (FCO) travel advice first.

DIT contacts for Canada

Contact a local DIT trade adviser in the UK if you are interested in finding out more about doing business in Canada.

Contact the DIT team in Canada for more information and advice on opportunities for doing business in Canada.

For all trade inquiries, UK companies must enter a submission through our North American export portal.

Published 18 September 2017