Canada: Doing business : Business opportunities

Product certification, labelling and packaging

Labelling

Pre-packaged products sold in Canada are subject to statutory packaging and labelling requirements. These requirements are regulated by both the federal and provincial governments, although the majority is done federally. The Packaging and Labelling Act defines three mandatory labelling requirements: product identity, product net quantity dealer's name and principal place of business.

Cartons for meat, poultry and meat and poultry products must be marked as prescribed and have the prior approval of the Canadian authorities. Importers should obtain the prescribed regulations from the Canadian Department of Agriculture in Ottawa.

No inedible gelatine, glue, grease, tallow or other inedible fat, meat or meat product, may enter Canada unless containers are legibly and plainly marked with the name and address of manufacturer or first dealer, plus the name of the product together with words 'Inedible - Unfit For Food'.

Information shown on labels is subject to minimum type size requirements.

A wide range of consumer items are now limited to a specific number of standard metric package sizes. This particularly relates to products such as laundry detergents, soaps, deodorants, shaving creams, hairsprays, shampoo, perfume, skin creams and other cosmetic goods.

Country of origin markings are a requirement on many consumer and other products. Failure to comply with this regulation will result in goods being refused entry.

Although the Universal Product Code (UPC or bar code) is not required or administered by government, virtually all retailers require the merchandise they carry to be labelled with a UPC. For more information concerning the UPC, contact GS1 Canada.

The regulation of the importation of food into Canada is the shared responsibility of several federal agencies and departments. The primary federal bodies involved are the Canadian Food Inspection Agency (CFIA) and the Department of Foreign Affairs and International Trade.

The CFIA mandates that all foods packaged for consumer use and imported into Canada must comply with basic food labelling requirements specified by the Food and Drugs Act and Regulations and the Consumer Packaging and Labelling Act and Regulations. The Guide to Food Labelling and Advertising is a comprehensive reference document providing current federal food labelling and advertising policies and regulatory requirements.

It should be noted that Canadian labelling requirements may differ significantly from those of the USA and other countries.

In the Province of Quebec, labelling of food products must be in French or have a French version displayed at least as prominently as the other language. Statements of national meat inspection and of plant number must be indicated on labels or cartons of imported meat.

Labelling requirements include:

• The common name of the food
• A list of ingredients and components
• The name and address of the responsible party
• A net quantity declaration in metric
• A 'Best Before' date when required

Nutritional labelling is voluntary unless nutritional claims are made. The format and information provided must comply with the Guidelines on Nutritional Labelling developed by Health Canada and also with the Food and Drug Regulations.

Agricultural and fish products for which standards exist under the Meat Inspection Act, Canadian Agricultural Products Act and associated regulations, and the Fish Inspection Act may have additional labelling requirements (eg. grade or country of origin).

Labels of shipping containers, such as those for commercial, industrial or institutional use, are not required to be bilingual but require a net quantity declaration in either metric or Canadian measure. Other mandatory information such as the common name, the list of ingredients, etc. are also required.

Packaging

A certificate of disinfection is required for straw, hay, peat, moss, or other raw packing materials of the soil. Plant protection import permits are also usually required for all plant materials taken into Canada.
 
Used sacks, bags, canvas and other similar packing materials are prohibited.

Packages that constitute a single shipment must be legibly marked and numbered on the outside.

Special certificates

A certificate of disinfection is required for certain packing materials (see 'Packing, marking and labelling').

Imports of animals, plants and their products (including fruit and vegetables, other foods, seeds, hay and forest products) require health certification issued by an approved authority in the country of origin (see 'Public health requirements').

A confirmation of sale form, available from the Canadian Department of Agriculture, is required for all shipments of fresh fruits and vegetables entering Canada.

Unless shipments of inedible gelatine, glue, grease, tallow and other inedible fat, meat and meat products are marked in the manner described under 'Packing, marking and labelling', a certificate made out on Special Form L (available from importers) must be submitted to customs.

Whisky, brandy and rum must be accompanied by a certificate of age, which must indicate a minimum age of two years.

Specific asbestos products must have a declaration of origin included on the invoice.   

Methods of quoting and payment

Quotations are preferably in Canadian dollars, CIF (Incoterms 1990) Canadian destination (with FOB shown separately).

Usual terms of credit for goods to be retailed are from 30 to 90 days. Methods of payment vary.

Bills of exchange on various terms, banker's draft, as well as payment by cheque or cash, are all in use.

Documentary requirements

Invoices

Exporters should ensure that all details required by the invoice are included and that the original is signed in ink. Three invoicing options can be used:

• The Canada Customs Invoice (CCI) - should be used for shipments of an FOB value of C$1600 and over.
• A commercial invoice containing the same information as the CCI except that this is used for shipments valued at less than C$1200. This may be accompanied by the shipper’s normal commercial invoice provided that it contains all information as provided for in the above prescribed form.
• A commercial invoice which indicates the buyer, seller, country or origin, price paid or payable, and a detailed description of the goods, including quantity, and a CCI that provides the remaining information.

Invoice 

Three invoicing options can be used:

• The Canada Customs Invoice (CCI) should be used for shipments with an FOB value (Incoterms 1990) of C$1200 and over.
• A commercial invoice containing the same information as the CCI should be used for shipments valued at less than C$1200. This may be accompanied by the shipper's normal commercial invoice, provided that it contains all information as provided for in the above prescribed form.
• A commercial invoice which indicates the buyer, seller, country or origin, price paid or payable, and a detailed description of the goods, including quantity, and a CCI that provides the remaining information.

Exporters should ensure that all details required by the invoice are included and that the original is signed in ink.
Additional data must be included in customs invoices for footwear and textile products (including further specific details for garments, carpets, gloves and mittens).
Regardless of the type of invoice used, Customs Canada requires two copies of non-warehouse and three copies of warehouse document packages.

Bill of lading/Airway bill

Only special requirement is that ultimate destination must be shown. To Order bills acceptable.

Certificate of origin

Certificates of origin are used to support the tariff treatment claimed in Form B3. The tariff treatment is linked to several trade agreements which may benefit the importer since they offer lower duty rates. It is not necessary to present the certificate at the time the shipment is released, but this must be produced at the time of accounting for the shipment.

There are four main types of certificates of origin. These apply if claiming lower customs duty rates for goods from the US or Mexico under the terms of:

• North American Free Trade Agreement (NAFTA)
• Canada-Israel Free Trade Agreement (CIFTA)
• Canada-Chile Free Trade Agreement (CCFTA)

There is also a Form A - General Preferential Tariff (GPT) certificate of origin. This is applicable to goods covered by the GPT. It is issued by an exporter in the country where the goods originated.

Public health requirements

Imports of animals, plants and their products (including fruit and vegetables, other foods, seeds, hay and forest products) require health certification issued by an approved authority in the country of origin. Many of these imports are also subject to inspection upon arrival.

Fruit and vegetables, honey, meat, fish and processed foodstuffs are subject to specific regulations. Exporters must confirm with their importers that their products meet the full requirements of the Canadian legislation.

The Government of Canada has consolidated all federally mandated food inspection and quarantine services and quarantine services into a single federal food inspection agency called The Canadian Food Inspection Agency. 

Quality standards and labelling requirements for drugs and patent medicines are prescribed. Health Canada's Therapeutic Products Programme (TPP) is the national authority that evaluates and monitors the safety, effectiveness and quality of drugs, medical devices and other therapeutic products available to Canadians.

The TPP plays a national role in the control of illicit drugs and related substances in Canada Samples, plus details of ingredients, manufacturing methods, test reports and a sample label, must be submitted for the prior approval and allocation of a Drug Identification Number (DIN) by the TPP. The DIN is the number located on the label of prescription and over-the-counter drug products that have been evaluated by the TPP.

Business number (BN)

The Government of Canada has introduced a more efficient numbering system for businesses. The BN replaces the many numbers businesses need to deal with government, thus helping them reduce costs and increase competitiveness. The BN has 15 digits: nine numbers to identify the business and two letters and four numbers identify the program and each account. A BN can be obtained from any Revenue Canada office.

Canadian businesses that register for one or more of the following accounts require a BN:

• Corporate income tax
• Importer/exporter account number
• Payroll (source) deductions (trust accounts)
• Goods and services tax

The BN import/export account must be shown on all customs documents. This applies to most shipments that enter Canada.

Importing commercial goods 

A final accounting package must be submitted to Revenue Canada for shipments that enter into Canada. In most cases a complete accounting package consists of:

• Two copies of the cargo control document (CCD)
• Two copies of the invoice
• Two copies of a completed Form B3, Canada Customs Coding Form
• Any import permits, health certificates, or forms that other federal government departments require
• A Form A certificate of origin (when necessary)

Cargo control document 

The carrier uses the cargo control document (CCD) to report any shipments to Revenue Canada. The CCD acts as Revenue Canada's initial record of the shipment's arrival. This document is also used for all shipments moved in-bond to an inland customs office, sufferance warehouse, or bonded warehouse.

Customs coding form 

The Customs Coding Form, Form B3, is used to account for commercial goods. Information must include:

• Importer name and the import/export account
• A description of the goods
• The direct shipment date
• The tariff treatment
• The country of origin
• The tariff classification
• The value for duty
• The appropriate duty or tax rates
• The calculation of duties owing

Insurance

Normal commercial practice.

Weights and measures

The metric system

Taxation

The Goods and Services Tax (GST) is a multi-stage tax that applies to most goods and services sold or provided in Canada at a rate of five per cent:

• The GST on imports is initially levied on the freight on board (FOB) price plus applicable Canadian customs duties.
• The GST on domestically produced goods is initially imposed at the manufacturer’s level.
• GST is levied at the retail level on the provincial sales tax (PST) paid value, ie. the value including the PST.

A limited range of goods and services have no GST applied:

• Sales of basic groceries and prescription drugs.
• Services including sales of used housing, financial services, some health, legal, and educational services, services by governments and other specified public bodies, and activities by charities and non-profit organisations.

Excise tax of 10 per cent of the duty-paid value is levied in addition to the GST on specific goods and services. Goods subject to excise include:

• jewellery
• lighters
• playing cards
• cigarettes and tobacco
• wine
• beer and other alcoholic beverages
• gasoline
• aviation gasoline
• diesel fuel

Provincial retail sales taxes (PST)  ranging from six to 10 per cent, are levied in all provinces except Alberta, the Northwest Territories and the Yukon.

The harmonised sales tax (HST) for imported goods is applicable in the provinces of New Brunswick, Nova Scotia, and Newfoundland instead of the GST and PST. The HST is at a rate of 15 per cent, comprising a seven per cent federal part and an eight per cent provincial tax.

More detailed information on Canadian taxation requirements is available from Canada Customs and Revenue Agency.