Tax & Trade Blog

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CBSA LOSES CHALLENGE ON NHP IMPORTS!

CBSA ARGUED CHANGE IN EXPLANATORY NOTES REQUIRED EVIDENCE OF EFFICACY

The recent decision of the Canadian International Trade Tribunal (the “CITT”) in Atrium Innovations Inc. (AP-2021-032 and AP-2022-026) is good news for importers of licensed Natural Health Products (“NHPs”). 

In its decision the CITT upheld 25 years of precedent and rejected arguments by the Canada Border Services Agency (the “CBSA”) that December 2019 changes to the WCO Explanatory Notes now require evidence of efficacy before classifying an NHP as a “medicament” for tariff purposes.

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CANADA-AUSTRALIA CUSTOMS PACT SIGNED

AUSTRALIA-CANADA'S LATEST PARTNER IN CUSTOMS MUTUAL ASSISTANCE AGREEMENT

Since 1979, Canada has been putting together a web of Customs Mutual Assistance Agreements (“CMAAs”) with a number of trading partners, including the US, Mexico, UK, EU, Israel, China, Korea, Chile, and Argentina.  Australia recently became the 15^th nation to agree to a CMAA with Canada, and we discuss below how these protocols allow Canada to tighten its enforcement on goods coming into Canada from foreign lands.

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CBSA AUDITING STRUCTURAL STEEL

CBSA'S ONGOING SCRUTINY IN STEEL PRODUCTS CLASSIFICATION SIGNALS RISING COMPLIANCE RISK

As we have blogged here and here, the Canada Border Services Agency (the “CBSA”) sets out its priority areas for compliance audits and verifications in its Trade Compliance Verification Priorities publication.  Steel and metal products have long been among the CBSA’s primary focuses for compliance review.

Recently, the CBSA has intensified its challenges to the classification of steel containers, interpreting tariff headings in ways that go beyond prevailing industry practice.  This shift reflects a broader trend toward more aggressive enforcement in the steel sector.

For importers, this trend heightens compliance risk.  The best approach is to seek legal advice early in the audit process and resolve classification issues before they escalate into formal assessments.

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BORDER INFRACTION CONSEQUENCES

IMMIGRATION STATUS ISSUES MAKE APPEALS A NO BRAINER

While the consequences of border infractions, either under the Customs Act (“CA”) or Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”), are generally not that severe, the situation may be very different for non-citizens of Canada.

Depending on how an infraction is handled by the CBSA—and what is disclosed on immigration or citizenship applications—infractions linked to the CA and PCMLTFA can trigger inadmissibility under the Immigration and Refugee Protection Act (IRPA) or prohibitions under the Citizenship Act. Consequently, as a preventative measure, non-citizens should appeal border infractions under the relevant legislation to head off any potential quasi-criminal prosecutions and protect their status in Canada.

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PROVISIONAL DUTIES ON CAST IRON SOIL PIPE

CBSA IMPOSES PROVISIONAL DUTIES ON CAST IRON SOIL PIPE FROM CHINA

On October 9, 2025, the Canada Border Services Agency (“CBSA”) released a notice of its preliminary determination of dumping in respect cast iron soil pipe originating in or exported from the People’s Republic of China (the “Subject Goods”).

Provisional duties are now imposed on imports of the Subject Goods released from the CBSA on or after October 9, 2025!

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CBSA INVESTIGATING CERTAIN STEEL WIRE

DUMPING OF CERTAIN CARBON AND ALLOY STEEL WIRE

• Reading from Vietnam and want a Vietnamese version? / Đọc bài viết bằng tiếng Việt tại đây

On April 22, 2025, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) in respect of the alleged dumping of certain carbon and alloy steel wire originating in or exported from China, Taiwan, India, Italy, Malaysia, Portugal, Spain, Thailand, Turkiye and Vietnam.  This investigation was prompted by a joint complaint filed by two manufacturers headquartered in Quebec. 

The goods under investigation are more specifically described as: 

Carbon or alloy steel wire, of round or other solid cross section, in nominal sizes up to and including 24.13 mm (0.950 inches) in diameter, whether or not coated or plated with zinc, zinc-aluminum alloy, or any other coating, including other base metals or polyvinyl chloride or other plastics (the “Subject Goods”).

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DUTY DRAWBACK UPDATE

DUTY DRAWBACK AN IMPORTANT OPTION IN CURRENT TRADE WAR

Since we last wrote about duty drawback, there have been significant developments in the trade war between Canada and the United States (“US”).  Canada has enacted three rounds of retaliatory tariffs, while the US has also imposed a number of different tariffs, with the most recent being President Trump’s reciprocal tariffs.

Amid this escalating trade war with no end in sight, businesses should consider duty drawback as a mechanism to mitigate the impact of tariffs and obtain legal advice to determine eligibility.

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CHINESE SURTAX RELIEF IMPLEMENTED

 REMISSION AVAILABLE FOR SURTAXES ON CERTAIN CHINESE GOODS

As we blogged on previously here and here, the surtaxes imposed on certain Chinese goods imported into Canada have the potential to place undue burdens on Canadian businesses relying on those products. 

The recently implemented China Surtax Remission Order (2024) (the “Order”) provides much needed remission for Canadian businesses.  Continue reading this Report for more details.

For frequent travelers between Canada and the United States, the opportunity to save time at the border and make use of the NEXUS entry process is alluring.  Applying for NEXUS is a labour-intensive process, and after submitting some applicants may be surprised to find their applications rejected.  Not all hope is lost, however.  In this Report we review appeal rights, and why specialized assistance will usually be required, if results are to be maximized.  

Why was my NEXUS application denied?

Many travelers, including seasoned and sophisticated travelers, misunderstand the fundamental obligation to declare all goods being imported into Canada.

The most common misconception is often that “I’m within my exemption limits” and therefore “I don’t have to tell anybody what I’m bringing in”.

A recent case from the Federal Court of Appeal (“FCA”) demonstrates that this is far from the truth!

Based on recent inquiries, it appears that the Canada Border Services Agency (the “CBSA”) is currently focusing on verifying whether importers are using the correct tariff classifications when reporting importations of various spices and seasoning products.

Importers of spices and seasoning products – and their foreign producers – should take any inquiries from CBSA seriously!

The Government of Canada’s website cautions returning travellers to “Be sure . . . declare everything”.  However, problems can arise, and the Canada Border Security Agency (“CBSA”) could seize your goods like jewellery.

Having one’s jewellery, especially rings and necklaces of sentimental or significant value, seized can be an incredibly stressful situation. Our previous blog considered this subject, and we will provide you with further insight into the appeal process.

If a person intends to carry CAD $10,000 or more in Cash over Canada’s border (either entering or exiting Canada), the person carrying the cash must declare the amount being carried to Canadian Border Services Agency (“CBSA”). If a CBSA officer determines that a traveller is carrying undeclared cash and suspects that it may be proceeds of a crime, the CBSA may seized the cash and hold it until the matter is proven otherwise. A recent Federal Court decision in Evans v Canada (Public Safety and Emergency Preparedness), 2022 FC 1516 (“Evans”) serves notice that while there are appeal mechanisms available, it can be extremely difficult to overturn these seizures.

With all of the concerns that businesses engaged in the import/export of products in the United States and Canada face (increased global competition, currency fluctuations and product quality), one of the least considered but most important involves the often confusing world of customs compliance.

While it is inevitable that errors or omissions may occur in customs compliance, errors can be expensive. To avoid customs assessments, and attendant interest and penalties (not to mention potential prosecution), constant vigilance of one's customs obligations is required.

The Customs Act requires corrections of errors in import declarations – such as a tariff classification, country of origin, or value for duty.  Each correction requires the filing of a form B2 adjustment request, which can be an onerous task when multiple corrections are required. The CBSA has an administrative practice that streamlines the procedure for authorized importers by allowing them to file a single blanket adjustment request - a single form with an attached spreadsheet - to process multiple corrections with one form.  However, the CITT decision in Worldpac Canada (AP-2014-021) shows that administrative practice does not have the force of law and a taxpayer’s reliance thereon involves risk. 

In AG v. Bri-Chem Supply Ltd. et al. (2016 FCA 257), the Federal Court of Appeal (FCA) reproached the Canadian Border Services Agency (“CBSA”) for administrative practices that amounted to an abuse of process.

The Supreme Court of Canada rendered its first decision on the Customs Tariff in Canada v.Igloo Vikski Inc. (2016 SCC 38).  The decision provides guidance on applying the General Rules for the Interpretation of the Harmonized System (“General Rules”), particularly in the context of how the General Rules inform one another.