Value-for-Duty: Use Last Sale for Imports

Summary#

This is a proposal (published in the Canada Gazette, Part I on May 27, 2023) to change how the value for duty (the price customs uses to calculate taxes and duties) is determined for imported goods. The changes would say which sale in a chain of transactions must be used to set that value. Interested people had 30 days from publication to comment.

What it does#

• Defines the phrase “sold for export to Canada” to mean any sale, agreement, purchase order, intent to buy, or other arrangement that causes goods to be exported to Canada.
• Says that when there are multiple sales or arrangements before import, the applicable sale is the last sale in the supply chain that caused the goods to be brought into Canada.
• Changes the definition of “purchaser in Canada” so it is simply the person who buys (or will buy) the goods in that relevant sale, without tying the definition to being a resident or having a permanent establishment in Canada.
• Ties the coming-into-force of the rules to section 212 of the Budget Implementation Act, 2021, No. 1, or to registration if the rules are published later.

These changes are meant to make the transaction value method (the primary way of valuing imports under the Customs Act) use the sale that actually brought the goods into Canada, not an earlier foreign sale.

Who's affected#

• Non-resident importers (NRIs) — businesses outside Canada that ship goods to Canadian customers (including many e-commerce sellers).
• Importers based in Canada (domestic importers), including Canadian subsidiaries of foreign companies.
• Customs brokers, retailers, and businesses that arrange international logistics and invoicing.
• The Canada Border Services Agency (CBSA), which enforces valuation rules.
• Potentially the federal treasury, because duties collected depend on declared values.

If the source is unclear about a specific group, it is noted: the rules target situations where earlier foreign sales have been used instead of the sale that caused importation.

Why it matters#

• Affects who pays how much duty: under the proposed rules, the value used to calculate duties would be the price of the sale that actually brought the goods into Canada. That can raise the customs value declared by some foreign sellers.
• Aims to level the playing field between Canadian importers and foreign sellers who were using earlier, lower-priced foreign sales to reduce duties.
• The government’s regulatory analysis estimates higher customs revenue: an increase starting at $181.8 million in 2023, rising to $273.2 million by 2031, averaging about $224.7 million per year over 10 years. Another estimate said NRIs’ declared values for 2016–19 would have been about $14.7 billion higher, leading to roughly $150 million more in duties per year. These are estimates from the impact analysis, not guaranteed outcomes.
• The change would bring Canada closer to international practice under the World Trade Organization’s rules (the so-called “last sale rule”), and is intended to reduce disputes and lost revenue linked to modern e-commerce supply chains.