Customs & Trade
Glossary

Canada's mandatory electronic pre-arrival cargo reporting system. Carriers must transmit cargo data to CBSA before goods arrive at a Canadian port of entry. ACI encompasses eManifest for trucks, ACI Ocean for vessels, and ACI Air for aircraft.

A written decision issued by CBSA before importation, confirming the tariff classification, country of origin, or customs value of specific goods. Advance rulings provide regulatory certainty and are binding on CBSA for the period they are in effect.

The non-negotiable transport document used for air freight shipments. The AWB serves as a receipt for cargo, a contract of carriage between shipper and carrier, and provides customs documentation. Unlike a Bill of Lading, an AWB cannot be used as a title document.

An additional duty imposed on imported goods that are sold into Canada at prices below their normal market value in the country of export. Anti-dumping duties are administered under Canada's Special Import Measures Act (SIMA) and are investigated by the Canada Border Services Agency.

A notification issued by the carrier or freight forwarder to the consignee or customs broker advising that a shipment has arrived at the port of destination and is available for customs clearance and pickup.

The US Customs and Border Protection system requiring carriers to electronically file cargo manifest data before a vessel, aircraft, or truck arrives at a US port. Canadian exporters shipping to the US must ensure their freight agents file AMS data accurately and on time, as AMS holds can delay cross-border shipments significantly.

A CBSA review of the declared customs value of imported goods that may result in a higher assessed value — and therefore higher duties. Importers can challenge a CBSA re-appraisement by filing a Request for Re-determination (B2 form) within the prescribed time limit. Transfer-pricing situations and related-party transactions are most commonly subject to appraisement reviews.

The primary CBSA import accounting document filed by licensed customs brokers to account for commercial goods entering Canada. The B3 contains the HS tariff classification, customs value, country of origin, and calculated duties and taxes. Also known as the Customs Entry or Import Entry.

The CBSA form used by importers or their brokers to formally dispute a customs decision on tariff classification, customs value, or origin. A B2 must be filed within four years of the original accounting date. Filing a B2 is the first step in Canada's customs dispute resolution process and can lead to a refund of over-assessed duties or a formal ruling by CBSA.

The CBSA form used to declare goods being exported from Canada. Required for most commercial exports valued over $2,000 CAD and all exports of controlled goods regardless of value. Now filed electronically through the Canadian Export Reporting System (CERS).

A legal document issued by a carrier to a shipper that serves three functions: a receipt for cargo, a contract of carriage, and — when issued in negotiable form — a title document to the goods. The original B/L must be presented to take delivery of ocean freight.

A financial guarantee provided to CBSA by an importer, secured through a licensed surety company. Bonds guarantee payment of duties and taxes. Under CARM, importers must post their own financial security directly with CBSA. Common bond types include single-entry and continuous bonds.

A CBSA-licensed storage facility where imported goods can be held without payment of duties and taxes for a defined period (up to four years in Canada). Goods can be stored, manipulated, or sold while in bond, with duties payable only when goods are released into Canadian commerce.

A bilateral free trade agreement between Canada and Chile in force since 1997. CCFTA eliminates tariffs on most goods traded between the two countries. Importers of Chilean-origin goods must provide a certificate of origin to claim preferential rates under CCFTA.

A free trade agreement between Canada and Israel providing for duty-free treatment on most goods. Importers of Israeli-origin goods must meet CIFTA rules of origin and provide appropriate origin documentation to claim preferential tariff treatment at the Canadian border.

A major CBSA initiative that modernizes how duties, taxes, and fees are assessed and collected for commercial imports. CARM Release 2 (May 2024) introduced the CARM Client Portal (CCP), monthly duty statements, and direct importer financial security requirements.

The Canadian federal agency responsible for administering customs, immigration, and border security at all Canadian ports of entry. CBSA enforces the Customs Act, Customs Tariff, and regulations of Other Government Departments (OGDs) for all goods entering or leaving Canada.

A document certifying the country in which goods were manufactured, produced, or substantially transformed. Required to claim preferential (reduced or zero) duty rates under free trade agreements such as CUSMA, CETA, and CPTPP. May be self-certified by the exporter, producer, or importer depending on the FTA.

The free trade agreement between Canada and the European Union in force since 2017. CETA eliminates or reduces tariffs on most goods traded between Canada and EU member states. Importers must provide a Statement on Origin on the commercial invoice or other document to claim CETA preferential rates.

An Incoterm under which the seller pays the cost of goods, marine insurance, and ocean freight to the named destination port. Risk transfers to the buyer once goods are loaded on the vessel. CIF is used only for ocean and inland waterway transport.

A federal administrative tribunal that hears appeals on customs and trade matters, including tariff classification disputes, valuation rulings, anti-dumping and countervailing duty inquiries, and safeguard investigations. Decisions of the CITT can be further appealed to the Federal Court of Appeal.

The primary trade document issued by the seller to the buyer describing the goods, their value, and terms of sale. CBSA uses the commercial invoice to verify the declared customs value and HS classification of imported goods. It must accurately reflect the actual transaction value.

The process of combining multiple smaller shipments from different shippers into a single container or truck load. Consolidation is used for LCL (Less than Container Load) ocean shipments and groupage trucking, allowing smaller importers to share container costs.

The country where goods were wholly obtained, produced, or where the last substantial transformation occurred. Country of origin determines the applicable tariff rate, whether FTA preferential rates apply, and whether anti-dumping or countervailing duties are payable.

An additional import duty imposed on goods that have received government subsidies in the country of export, allowing them to be priced artificially low. Countervailing duties are applied under SIMA (Special Import Measures Act) to offset the subsidy benefit and level the competitive playing field.

A free trade agreement among 11 Pacific Rim countries including Canada, Japan, Australia, Vietnam, Mexico, and others. CPTPP eliminates or reduces tariffs on most goods and services traded between member countries, providing Canadian exporters and importers with preferential access to key Pacific markets.

The free trade agreement between Canada, the United States, and Mexico that replaced NAFTA in July 2020 (known as USMCA in the US and T-MEC in Mexico). CUSMA provides preferential (reduced or zero) tariff rates on qualifying goods that meet the agreement's rules of origin.

A tax or tariff levied by a government on goods imported into its territory. In Canada, customs duties are calculated based on the customs value of goods multiplied by the applicable tariff rate from the Canadian Customs Tariff schedule. Rates vary by HS code and country of origin.

Canada's official schedule of import duty rates, organized by HS (Harmonized System) tariff codes. The Customs Tariff sets out the Most Favoured Nation (MFN) rate, preferential rates under various FTAs, and special rates for certain countries or goods.

Substances or articles that pose a risk to health, safety, or the environment during transport. In Canada, dangerous goods shipments are regulated under the Transportation of Dangerous Goods Act (TDG). Importers and shippers must ensure proper classification (UN number), packaging, labelling, and documentation — including a Shipper's Declaration — for all dangerous goods crossing the border.

The minimum value threshold below which imported goods may be exempt from duties and/or taxes without a formal customs entry. Canada's de minimis threshold for duties is CAD $20 for most goods, though CUSMA raises this to CAD $150 for duties and CAD $40 for taxes on qualifying US and Mexican goods.

The value of imported goods as declared to CBSA for the purpose of calculating duties and taxes. The primary basis for Canadian customs valuation is the transaction value — the price actually paid or payable for the goods when sold for export to Canada.

A charge assessed by a shipping line or port terminal when an importer retains a container beyond the agreed free time period without returning it to the carrier. Demurrage is distinct from detention, which applies when a carrier's equipment (e.g., chassis) is kept beyond the allowed free period.

The refund of customs duties paid on imported goods that are subsequently exported from Canada, either in the same condition or as inputs used to manufacture exported products. Drawback claims are filed with CBSA using Form K90 and can cover up to four years of prior import history.

The short-distance trucking of cargo — typically from a port or rail terminal to a nearby warehouse or distribution centre. Drayage is a critical link in the supply chain between ocean/rail modes and final delivery.

A CBSA program allowing importers to defer payment of customs duties under specific conditions. Includes programs such as Temporary Importation under Bond (TIB) and bonded warehouse storage. Duty deferral improves cash flow by delaying duty payment until goods enter Canadian commerce.

The computer-to-computer exchange of standardized trade documents between trading partners and government agencies in a structured electronic format. CBSA accepts customs declarations, manifests, and cargo reports via EDI through approved third-party service providers. EDI enables high-volume importers and brokers to file entries directly from their own systems.

Canada's electronic advance cargo reporting system that requires carriers to submit commercial cargo data to CBSA before goods arrive at the border. eManifest covers all modes of transport (truck, ocean, air, and rail) and is part of Canada's Advance Commercial Information (ACI) program.

The formal filing of documents with CBSA to account for imported goods and pay the applicable duties and taxes. An entry may be a 'release' (allowing goods out of CBSA control) or an 'accounting' (the financial settlement of duties owing). Licensed customs brokers prepare entries on behalf of importers.

A domestic consumption tax levied on specific categories of goods in Canada, including tobacco, alcohol, cannabis, and fuel. Excise taxes on imported goods are collected by CBSA at the border in addition to customs duties and GST/HST.

An Incoterm where the seller makes goods available at their premises and the buyer assumes all costs and risks from that point. EXW represents the maximum obligation for the buyer and minimum obligation for the seller. The seller is not responsible for export clearance under EXW.

Canada's list of goods that require an export permit from Global Affairs Canada before they can be exported. The ECL covers dual-use items, military goods, nuclear materials, and goods subject to multilateral export control regimes. Exporting ECL goods without a permit is a serious criminal offence.

A shipment where one importer or exporter uses an entire shipping container exclusively. FCL is typically more cost-effective per unit than LCL for larger shipments and provides greater security as the container is not shared with other shippers' cargo.

An Incoterm where the seller is responsible for the goods and all costs until they are loaded on board the vessel at the named port of shipment. Risk transfers to the buyer at that point. FOB is used only for ocean and inland waterway transport and is the most common Incoterm in international trade.

A treaty between two or more countries that eliminates or reduces tariffs and other trade barriers on goods and services traded between the parties. Canada has free trade agreements with 51 countries, including CUSMA (US and Mexico), CETA (European Union), and CPTPP (11 Pacific Rim nations).

A designated geographic area where goods may be imported, stored, handled, manufactured, or reconfigured with limited customs duty obligations. Goods in an FTZ are considered outside the customs territory of the host country until they enter domestic commerce.

A licensed agent that arranges the transportation of goods on behalf of shippers. Freight forwarders coordinate carriers, book cargo space, prepare shipping documents, and may arrange customs clearance. Unlike a customs broker, a freight forwarder's primary role is logistics coordination rather than customs compliance.

A unilateral tariff preference extended by Canada to goods originating in designated developing countries. GPT rates are lower than MFN rates and apply automatically when goods meet Canadian origin requirements and are accompanied by a Form A (Certificate of Origin). Canada periodically reviews the list of GPT-eligible countries based on economic development criteria.

The standard duty rate applied to imports from all World Trade Organization (WTO) member countries that do not have a free trade agreement with Canada. MFN rates are set in Canada's Customs Tariff and represent the baseline rate before any FTA preferences are applied.

Canada's 5% federal value-added tax applied to most imported goods and collected by CBSA at the border in addition to any applicable customs duties. GST paid on imports by GST-registered businesses is generally recoverable as an input tax credit on the business's GST return.

The international standardized system for classifying traded goods, developed by the World Customs Organization (WCO). The HS consists of 21 sections and 99 chapters covering all goods in trade. HS codes form the basis for customs tariffs, trade statistics, and rules of origin in virtually every country in the world.

A numeric code assigned to imported or exported goods based on the Harmonized System classification structure. The international HS provides a 6-digit code; Canada extends this to 10 digits in the Canadian Customs Tariff for more specific classification. The HS code determines the applicable duty rate and any regulatory requirements.

A combined federal and provincial sales tax applied in Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. For imported goods, HST replaces GST in these provinces and is collected by CBSA at the border at the applicable provincial combined rate.

The global trade association for the world's airlines, responsible for setting industry standards for air transport, including dangerous goods regulations, cargo documentation (air waybills), and freight rating. IATA certifications are required for freight forwarders and airlines handling dangerous goods by air.

A government authorization required before certain restricted goods can be imported into Canada. Import permits are issued by Global Affairs Canada for goods on the Import Control List, such as certain agricultural products, steel, and firearms. Some OGD permits (e.g., CFIA, Health Canada) also function as import authorizations.

The legal entity (company or individual) named on customs documents as the responsible party for a commercial importation into Canada. The IOR is accountable to CBSA for the accuracy of customs filings, payment of duties and taxes, and compliance with all applicable import regulations.

A set of internationally recognized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international trade transactions. Incoterms specify who is responsible for transportation costs, insurance, and the risk of loss at each stage of the journey. Common terms include EXW, FOB, CIF, and DDP.

The transport of imported goods within Canada under CBSA control, without payment of duties, from one port of entry to another authorized point (e.g., an inland port or bonded warehouse). Goods in-bond remain under customs control and must be presented at the destination bonded facility for final accounting.

A supply chain strategy where goods are imported and delivered to the point of use exactly when needed, minimizing inventory holding costs. JIT importing requires highly reliable customs clearance timelines. PARS pre-clearance and a trusted customs broker with real-time CARM access are critical to maintaining JIT workflows at the Canadian border.

The CBSA statement issued to importers under CARM summarizing all accounting entries processed in a given month. The K84 consolidates duties, taxes, and fees owed across all entries into a single monthly payment. Importers must post sufficient CARM financial security to ensure their monthly K84 obligations are covered.

A shipping arrangement where an importer's cargo does not fill an entire container, so the space is shared with other shippers' freight. LCL shipments are consolidated at the origin and deconsolidated at the destination. Also known as 'groupage' in some markets.

A financial document issued by a bank on behalf of a buyer guaranteeing that payment will be made to the seller upon presentation of specified shipping and trade documents. Letters of credit reduce payment risk in international trade, particularly with new trading partners or in high-risk markets.

Regulatory requirements that imported goods be clearly marked with their country of origin. CBSA enforces origin marking requirements primarily under the Customs Act and trade agreement obligations. Consumer goods sold in Canada must accurately indicate their country of manufacture. Improper marking can result in goods being detained at the border or subject to penalty.

A comprehensive list of all cargo aboard a carrier (vessel, aircraft, truck, or rail car), including details such as shipper, consignee, commodity description, quantity, and weight. Carriers must submit advance manifests to CBSA under the ACI/eManifest program before goods arrive at Canadian ports of entry.

The standard WTO tariff rate applied to imports from countries with which Canada does not have a free trade agreement. MFN status is required by WTO rules — if Canada grants a tariff rate to one WTO member, it must generally offer the same rate to all other WTO members (with FTA exceptions).

A foreign company (typically a US or overseas seller) that acts as the Canadian Importer of Record for goods being sold into Canada. By acting as NRI, the foreign seller takes on all Canadian customs obligations — including duty payment, CBSA compliance, and GST/HST registration — on behalf of Canadian buyers.

The negotiable transport document issued by an ocean carrier covering a specific shipment from a foreign port to a Canadian port. The OBL serves as a title document — the consignee must surrender the original OBL to take delivery of the cargo. Telex release (electronic release) has largely replaced physical OBL surrender for many routine shipments.

Federal government agencies other than CBSA that have regulatory authority over specific categories of imported goods. Key OGDs include CFIA (food, plants, animals), Health Canada (drugs, medical devices, pesticides), Transport Canada (vehicles, dangerous goods), and Global Affairs Canada (export/import controls).

The country where goods were wholly obtained or manufactured, or where the last substantial transformation took place. Origin determines applicable duty rates, FTA eligibility, and whether anti-dumping or countervailing duties apply. Rules of origin vary by product and by trade agreement.

Canada's pre-clearance system for truck shipments that allows customs brokers to submit import documentation to CBSA before cargo arrives at the border. When PARS is approved before arrival, release can occur within minutes of the truck arriving at the port of entry, dramatically reducing border wait times.

A CBSA voluntary trusted trader program that recognizes businesses committed to supply chain security. PIP members undergo a security assessment and agree to implement CBSA-recommended security measures. Benefits include enhanced border facilitation, reduced examination rates, and strengthened relationships with CBSA officers.

An officially designated location where goods (and people) can legally cross into Canada under CBSA supervision. Canada has over 100 ports of entry including major land border crossings (Windsor, Niagara), international airports (YYZ, YVR, YUL), and marine ports (Halifax, Vancouver, Montreal).

A reduced or zero duty rate applied to imports from countries with which Canada has a free trade agreement. To qualify for a preferential rate, goods must meet the rules of origin requirements of the applicable FTA and be accompanied by a valid certificate or statement of origin.

A preliminary or estimated invoice issued by a seller to a buyer before an order is confirmed or goods are shipped. Pro forma invoices are used for quotation purposes, to obtain import permits or letters of credit, and are sometimes used for customs purposes when the final commercial invoice is not yet available.

Quebec's provincial sales tax at 9.975%, administered by Revenu Québec. Unlike HST provinces, Quebec operates its own tax administration separate from the CRA. Importers receiving goods into Quebec may have QST obligations depending on the nature of their business and the distribution of goods within the province.

A government-imposed limit on the quantity or value of specific goods that can be imported (or exported) during a defined period. Tariff-rate quotas (TRQs) allow a specified quantity of goods to enter at a lower duty rate, with additional quantities subject to a higher out-of-quota rate.

CBSA's formal authorization allowing imported goods to leave the port of entry and enter Canadian commerce. Release is separate from accounting (duty payment). Under CARM, most commercial importers can obtain release prior to payment under a monthly accounting cycle, subject to posting adequate financial security.

The criteria used to determine the national origin of a product for trade policy purposes. Under free trade agreements, rules of origin specify what manufacturing processes or content thresholds goods must meet to qualify as 'originating' and eligible for preferential duty rates. Rules vary by product and by agreement.

The oversight and coordination of all activities involved in sourcing, procurement, conversion, and logistics management. Effective SCM for Canadian importers involves aligning procurement lead times with customs clearance requirements, managing landed cost calculations, and ensuring compliance with CBSA documentation requirements at every stage of the import process.

A document issued by the shipper to the freight forwarder providing detailed instructions for the booking, documentation, and export of a specific shipment. The SLI authorizes the forwarder to prepare export documents, arrange transportation, and — in some cases — act as export agent. Accurate SLIs prevent documentation errors that delay clearance at the Canadian port of entry.

Canadian legislation providing for the imposition of anti-dumping and countervailing duties on imported goods that are being dumped (sold below normal value) or subsidized by foreign governments. CBSA administers SIMA investigations while the CITT determines whether dumping or subsidization has caused injury to Canadian producers.

A declaration made by an exporter, producer, or importer on a commercial document (such as an invoice) certifying that goods meet the rules of origin requirements of a specific free trade agreement. Used under agreements such as CETA and CPTPP instead of a separate certificate of origin form.

A manufacturing or processing operation that changes a good's country of origin by creating a new and different article of commerce with a distinctive name, character, and use. Substantial transformation is one of the key tests used to determine country of origin for goods manufactured in multiple countries.

A three-party financial guarantee instrument in which a surety company (bonding company) guarantees to CBSA that an importer will fulfil their obligations (primarily duty and tax payment). Required under CARM for importers who want to obtain release of goods before making payment on their monthly CBSA statement.

The process of assigning the correct HS (Harmonized System) tariff code to imported or exported goods. Proper tariff classification determines the applicable duty rate, preferential tariff eligibility, and whether OGD regulations apply. Misclassification is the leading cause of CBSA penalties and duty overpayments.

A CBSA program allowing goods to be imported into Canada temporarily, duty-free, provided they will be exported within a specified timeframe (typically one year, extendable). A bond or security deposit is required to guarantee the goods' re-export. Common for trade show equipment, tools, and rental items.

The primary method of customs valuation under the WTO Customs Valuation Agreement and Canada's Customs Act. Transaction value is the price actually paid or payable for goods when sold for export to Canada, adjusted for certain additions (e.g., royalties, assists) and deductions (e.g., post-importation costs). Used in the vast majority of Canadian imports.

The pricing of transactions (goods, services, intellectual property) between related parties (e.g., a parent company and its subsidiary). For customs purposes, CBSA scrutinizes transfer prices to ensure the transaction value between related parties reflects arm's-length market conditions. Year-end transfer pricing adjustments may require amended B2 filings.

The transfer of goods from one carrier or conveyance to another at an intermediate point during transit from the country of origin to the country of destination. Transshipment is common in international ocean shipping (e.g., goods going via a hub port) and must be declared accurately on customs documents.

The per-unit price of an imported good as declared on the customs entry. CBSA may use statistical unit values derived from historical import data to benchmark declared values, particularly for commodities with known undervaluation risk such as apparel, footwear, and electronics. A declared unit value significantly below the CBSA benchmark may trigger a customs valuation review.

The US name for the Canada–United States–Mexico Agreement (CUSMA in Canada, T-MEC in Mexico). USMCA replaced NAFTA on July 1, 2020 and provides preferential tariff treatment for qualifying goods traded among the three North American countries.

The practice of declaring a customs value lower than the actual transaction value of imported goods, resulting in underpayment of duties and taxes. Undervaluation is a serious violation of the Customs Act and can result in penalties, seizure of goods, and criminal prosecution. CBSA uses valuation audits and transaction comparisons to detect undervaluation.

The process of determining the customs value of imported goods for the purpose of calculating duties and taxes. Canada follows the WTO Customs Valuation Agreement, which establishes a hierarchy of six valuation methods beginning with transaction value. The customs value generally includes the price of goods plus certain costs incurred up to the point of importation.

The total weight of a packed shipping container, including cargo, dunnage, and packing materials but excluding the tare weight of the container itself. SOLAS (Safety of Life at Sea) regulations require shippers to verify and submit the VGM to the carrier and port terminal before the container is loaded aboard a vessel.

A CBSA customs entry type used when imported goods are being placed into a licensed bonded warehouse upon arrival in Canada. Duties and taxes are deferred until the goods are withdrawn from the warehouse for consumption. Warehouse entries are used for duty deferral planning and to manage cash flow on high-value or slow-moving inventory.

The international intergovernmental body responsible for developing standards for global customs administration, including maintaining the Harmonized System (HS) classification system, developing customs procedures, and combating customs fraud. Based in Brussels, the WCO has 185 member countries.

The global international organization that deals with the rules of trade between nations. The WTO administers trade agreements, provides a forum for trade negotiations, and operates a dispute settlement system. WTO rules govern how member countries may apply customs duties and other trade measures.

CBSA uses mobile and fixed X-ray imaging technology at major ports of entry to scan commercial shipments for contraband, undeclared goods, and security threats without requiring physical unloading. Importers whose shipments are flagged for X-ray examination should expect a 2–6 hour delay. Repeated X-ray hits on the same importer account may trigger a formal trade compliance review.

A tariff rate of 0% applied to specific goods under Canada's Customs Tariff, either as a standing MFN rate for certain product categories (e.g., many industrial inputs not produced in Canada) or as the preferential rate under a free trade agreement. Zero-rated goods still require a complete and accurate customs entry and are subject to GST/HST collection at the border.