Canada’s population base is 35 million with a median after-tax income per family of $71,700 per year. The richest 10% of Canadians are earning more than $80,400 annually. The wealthiest 1% is making more than $191,100 which is seven times the average median income.
What do we know about Canadian customers?
Despite a large gap between the poorest and wealthiest, most of Canada is becoming increasingly urbanized with each passing year. This trend is giving birth to more multi-usage projects combining retail, office and residential blocks.
The top exports of Canada are Crude Petroleum ($80.5B), Cars ($45.9B), Refined Petroleum ($18.6B), Petroleum Gas ($12.6B) and Vehicle Parts ($10.7B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($26.1B), Crude Petroleum ($24.3B), Vehicle Parts ($21.4B), Refined Petroleum ($17B) and Delivery Trucks ($13.1B).
What does Canada import?
- Machines, engines and pumps
- Electronic Equipment
Canada’s Top 4 Import Partners
- Unites States
- United Kingdom
What are the major airports of Canada?
- Toronto Pearson International Airport, Toronto
- Vancouver International Airport, Vancouver
- Montréal-Pierre Elliott Trudeau International Airport, Montreal
- Calgary International Airport, Calgary
Major sea ports in Canada
- Port of Montreal
The Port of Montreal is a port located on the St. Lawrence River in Montreal, Quebec, Canada. The port handled 28,422,003 tonnes (31,329,895 short tons; 27,973,121 long tons) of cargo in 2012. The port has three international container terminals. Montreal Gateway Terminals Partnership operates two of the terminals and Termont Montreal Inc. operates the other. Empire Stevedoring Co. Ltd. operates a terminal that handles domestic containers. These facilities cover an area of approximately 90 hectares (36 acres) and have 15 dockside gantry cranes with lifting capacities ranging from 40 to 65 tonnes, yard gantry cranes and other container-handling equipment.
- Port Metro Vancouver
Port Metro Vancouver (legally Vancouver Fraser Port Authority) is a non-shareholder, financially self-sufficient corporation established by the Government of Canada in January 2008, pursuant to the Canada Marine Act, and accountable to the federal Minister of Transport.
Port Metro Vancouver offers 28 deep-sea and domestic marine terminals that service five business sectors: automobiles, break-bulk, bulk, containers, and cruise.
What are the customs and tariffs regulations in Canada?
You will be required to obtain a Business Number (BN) issued by the Canada Revenue Agency. This is a quick and easy procedure and can be done online or over phone.
A detailed description of the product you wish to import is required as certain categories are not permitted into Canada by law. These include:
- Obscene or hate-inducing material
- Coins – base or counterfeit
- Used or second-hand aircraft or motor vehicles
- Goods manufactured partly or whole by prison labour
Tariff, Tax and Time Saving
The tariff charged is based on the classification or HS code of the product you are looking to import. The HS code will also decide the rate of duty. If your product falls under a category covered by a trade agreement between your country and Canada, duty will be subsidized.
Excise tax is charged for the following goods:
- Automobile air conditioners
- Passenger vehicles
- Specific fuels
It is recommended that you engage the services of a licensed custom broker for your initial transactions with Canada. Though the import process is swift, there are strict rules and steps that need to be adhered to. Thorough study or the help of a broker will help you to save time and money in the long run.
Canada’s federal government imposes a 5% sales tax known as the Goods and Services Tax (GST). When a supply is made in a “participating province,” the tax rate includes an additional provincial component of 8%, 9% or 10%, depending on the province. The combined 13%, 14% or 15% tax is known as the Harmonized Sales Tax (HST). When the HST was first implemented, effective from 1 April 1997, the original “participating provinces” were New Brunswick, Newfoundland and Labrador, and Nova Scotia. At that time, those provinces adopted a provincial component of 8%, and the combined rate was 13%.
Every person who makes taxable supplies of goods or services in Canada in the course of a commercial activity is required to register for GST/HST purposes, except in the following circumstances:
- The person qualifies as a “small supplier.”
- The person’s only commercial activity is the supply of real property by way of sale other than in the course of a business.
- The person is a nonresident who does not carry on any business in Canada.
“Commercial activity” means any of the following activities:
- Any business, except to the extent the business involves making exempt supplies
- An adventure in the nature of trade, except to the extent the activity involves making exempt supplies
- The supply of real property, other than an exempt supply
For individuals and partnerships of individuals, the activity must also be carried on with a reasonable expectation of profit to constitute a commercial activity.
What is the distribution structure in Canada?
Canada’s retail and wholesale sectors are equally organised and impactful. In fact, wholesalers in Canada make up the largest chunk of the country’s booming services sector. There are stringent classifications to qualify as a wholesaler as Canadian economists take this multi-billion dollar sector quite seriously.
Wholesale or middlemen businesses in Canada include food, beverage and tobacco, warehouse construction and distribution centres among many others. While retail businesses consist of clothing and footwear, convenience stores, home improvement and garden centres, electronics and appliance specialists.
Knowledge of the customer base, major gateways, legal matters as well as the distribution structure will be beneficial to your expansion. Having a local partner will help you navigate around Canada’s market and ensure optimal results for your strategies.