On May 27, 2023 the Canada Border Services Agency (CBSA) introduced a proposal that will have a profound effect on the ‘value for duty’ assigned to imported goods into Canada. CBSA’s stated position is that this change will establish a fairer practice of assigning value, which currently favors Non-resident Importers (NRI) that take advantage of their acquisition cost.

It is noteworthy that in the current draft amendment, the changes will affect both NRI and resident importers.  The revision introduces the concept that the ‘last sale’ in a sequence of agreements to purchase goods will be the value assigned at the time of accounting for imported goods.

The overriding condition is that if the NRI or resident importer has agreed to sell goods to a Canadian customer, in advance of importation, then the importer must use that selling price and not their purchase price as the ‘value for duty’.

The present valuation regulations are based on the concepts of ‘Purchaser in Canada’ and ‘sale for export’, which are structured to push most imported goods into the use of the ‘transaction value method’ for assigning value.

The proposed revision is a quantum shift from the current approach and expose the importing community to increases in ‘value for duty’ and ultimately more duty and GST payable for imported goods.

CBSA has allowed a 30-day period for those concerned to submit questions or concerns as it relates to the draft amendments. Presently, there is no specific timeline for implementation of the proposed changes.

Ultimately, for companies that import goods for sale to other Canadian customers, it is imperative to ensure that they are in knowledge of the changes and that the import value assigned going forward reflects the new regulations.

It is highly likely that CBSA will be monitoring and targeting these valuation changes for compliance verifications in the next round of priorities.