Is International Freight Included in Canadian Duty Value?
Introduction
Few questions create as much confusion for importers buying from Asia as the one in this article’s title. A supplier in Shenzhen quotes a price, a forwarder quotes an ocean freight rate, a Canadian customs broker asks for a “value for duty,” and somewhere in the middle someone has to decide whether the freight belongs in that number. Get it right and you pay duty on exactly what the law requires. Get it wrong and you either overpay on every single entry or, worse, understate your value and invite a verification from the Canada Border Services Agency (CBSA).
The short answer is that, in most situations, international freight is not part of the Canadian value for duty. Canada applies a transaction value method that starts with the price paid or payable for the goods and then removes transportation and insurance costs that arise after the goods begin their direct journey to Canada. Unlike the European Union, the United Kingdom or Australia, which build customs value on a CIF basis, Canada behaves much more like an FOB system, similar in spirit to the approach used in the United States.
That short answer hides several traps, though. Freight incurred before the place of direct shipment is generally part of the value. A CIF invoice from a supplier has to be unbundled before it is declared. The deduction must be supported by documents that prove the actual cost of each shipment, a point the Canadian International Trade Tribunal (CITT) reinforced in the Korhani decision, which the law firm Millar Kreklewetz discussed in a January 2026 article. And with Canada’s counter-tariffs on certain U.S. goods in force since September 8, 2026, every dollar of declared value now carries more weight than it did a year ago.
This guide walks through the rules, the numbers and the paperwork from a freight forwarder’s point of view, so that you can quote, book and clear Canada-bound cargo with fewer surprises.
The Short Answer: Value for Duty Is Measured at the Place of Direct Shipment
What the Customs Act Actually Says
Under section 48 of the Customs Act, the value for duty of goods sold for export to Canada is their transaction value, provided certain conditions are met. CBSA Memorandum D13-4-1 explains those conditions, which relate to restrictions on the use or disposition of the goods, conditions or considerations attached to the sale, resale proceeds that flow back to the vendor, and whether a relationship between buyer and seller influenced the price. Industry commentary suggests that roughly 95 percent of imports into Canada are valued this way, so understanding the transaction value method covers almost every shipment a forwarder will ever handle.
The transaction value is the price paid or payable, adjusted by adding some items and deducting others. On the addition side sit packing costs, commissions and brokerage other than buying commissions, assists, royalties and licence fees related to the goods, and any portion of resale proceeds that accrues to the vendor. On the deduction side, the law allows the importer to remove certain costs that arise after the goods leave the place of direct shipment to Canada. That covers international transportation and the insurance on that journey, and it also covers Canadian duties and taxes, domestic freight inside Canada and Canadian customs brokerage fees if any of those happen to be baked into the price.
CBSA Memorandum D13-3-5 states the underlying principle in plain terms: transportation and associated costs incurred after the goods leave the place of direct shipment are not included in the value for duty.
Why the Invoice Wording Matters
The deduction only applies to amounts that are already inside the price. If the commercial invoice is on FOB terms, there is nothing to deduct, because the ocean freight was never part of what the buyer paid the seller. If the invoice is CIF or delivered, the freight sits inside the price and has to be taken out. In both cases the declared value for duty lands in the same place: the value of the goods plus the costs incurred up to the place of direct shipment, and nothing beyond it.
One consequence is that two importers buying identical goods at identical total landed prices can end up declaring different values for duty. The first agreed to FOB terms and kept clean freight records. The second let a supplier bury the freight inside an unitemized unit price, and when CBSA asked for proof, he had nothing to show for the deduction.
Understanding the Place of Direct Shipment
The Point Where the Canadian Clock Starts
The phrase “place of direct shipment” is the hinge on which the whole rule turns. It is the place from which the goods begin their direct and uninterrupted journey to Canada. For a container of consumer electronics loaded at a factory in Dongguan, trucked to Yantian port and sailed to Vancouver, the place of direct shipment is normally the Chinese port or terminal where the ocean voyage to Canada begins, not the factory gate.
Costs incurred to get the goods to that point, such as factory-to-port trucking, export documentation and origin-side handling, generally form part of the value for duty. Costs from that point onward, including the ocean leg itself, are deductible or excluded.
For forwarders this explains why an EXW quotation produces a higher value for duty than a FOB quotation for the very same goods. The EXW buyer arranges and pays the first-leg costs, and CBSA expects those costs to be reflected in the declared value because they are incurred before the place of direct shipment. The goods are not worth more. The legal measuring point simply sits further down the road than the place where the invoice price was fixed.
Transshipment, Consolidation and Multi-Leg Journeys
Real shipments rarely sail point to point. A container from Ningbo may transship in Busan or Singapore. An LCL shipment may be consolidated at a container freight station in Shenzhen and stuffed with other cargo. Goods bound for Toronto may land in Vancouver or Prince Rupert and then travel inland by rail. None of these events, on its own, changes the place of direct shipment, as long as the goods remain on a direct and uninterrupted journey to Canada.
The ocean leg, transshipment charges, the intermodal rail leg to Ontario and related fuel or peak-season surcharges all fall after the place of direct shipment and therefore sit outside the value for duty.
The analysis gets harder when goods stop in a third country for a commercial reason, for example when they are warehoused there and sold to a new buyer, or when they are delivered to a foreign address for later importation into Canada. CBSA Memorandum D13-3-5 deals with the related situation of goods delivered to a location outside Canada for subsequent importation, and it illustrates that a separately identified charge for shipping the goods to that location can be left out of the value for duty. Forwarders who run cross-border e-commerce flows through foreign warehouses should review that memorandum with their broker before assuming how the last crossing is treated.
How Common Incoterms Change the Declaration
Incoterms are commercial terms between buyer and seller. They are not customs law, and CBSA applies the Customs Act regardless of what the sales contract says. That said, the Incoterm tells you what is inside the invoice price, and that determines whether you need to add something, deduct something or do nothing. The table below summarizes the usual outcomes for the terms we see most often on China-to-Canada lanes.
| Incoterm | What the invoice price usually covers | Treatment of freight for value for duty | Typical adjustment |
| EXW | Goods at the seller’s premises; buyer arranges everything | Origin inland costs up to the place of direct shipment are not in the price and must be added; ocean freight is not in the price | Add origin costs |
| FCA | Goods handed to the buyer’s carrier at a named place | If the named place is the place of direct shipment, little or nothing to add; if it is inland, add later origin costs | Little or none |
| FOB | Goods loaded on the vessel at the origin port | Ocean freight not in the price, so value for duty equals the invoice price plus any other required additions | None |
| CFR | FOB price plus ocean freight to the destination port | Deduct ocean freight | Deduct freight |
| CIF | CFR price plus cargo insurance | Deduct ocean freight and international insurance | Deduct both |
| DAP | Delivered to a named place in Canada, import clearance by the buyer | Deduct international freight, insurance and Canadian inland freight | Deduct all post-shipment costs |
| DDP | Delivered with import duties and taxes paid by the seller | Deduct freight, inland freight, and any Canadian duties and taxes included in the price | Deduct all post-shipment costs |
FOB and FCA: The Cleanest Starting Point
When goods are bought FOB at the origin port, the invoice price is already very close to what Canada wants to see on the entry. There is no freight to remove and no inland origin cost left to add, so the broker can declare the invoice value, subject to any assists, royalties or packing costs that apply. This is why many experienced Canadian importers prefer FOB or FCA with a named port, and why forwarders often recommend them when the buyer wants control over the carrier and the freight rate.
EXW: Convenient for the Seller, Demanding for the Buyer
EXW looks attractive on a quotation because the supplier’s price is lower. For customs purposes, however, the buyer must remember that the first-leg costs are part of the value for duty. Factory pickup, trucking to the port or consolidation warehouse, export clearance and loading at origin all need to be captured and added. Importers who forget this step tend to undervalue their goods, and the error often surfaces months later during a post-release verification. The fix is simple: ask the forwarder to separate origin charges from main carriage on every quote and invoice.
CFR and CIF: Unbundle Before You Declare
Many Chinese suppliers prefer to quote CIF to Canadian ports because it lets them present a single attractive number. The importer then has to take that number apart. The freight and insurance portions must be removed from the price, and the amounts removed must be the actual amounts paid to the carrier or insurer for that shipment, not a negotiated or estimated figure. If the supplier will not itemize and cannot provide carrier documents, the deduction is at risk.
DAP and DDP: Three Layers to Peel Back
Delivered terms bundle the most costs into the price. In a DAP sale, the seller’s price includes international freight, insurance and delivery to a Canadian address, so each of those must be removed to get back to the value at the place of direct shipment. In a DDP sale, the price may also contain Canadian duties, taxes and brokerage fees. Those items are likewise excluded from value for duty, but only the amounts actually included in the price can be deducted, and CBSA will expect the numbers to reconcile with the entry. Delivered terms also raise the question of who is the importer of record, which is worth settling before the cargo sails rather than at the border.
What Counts and What Does Not: A Reference Table
Because the rule is built on additions and deductions, it helps to see the pieces side by side. The table below sets out the common cost items in a China-to-Canada shipment and how each is generally treated under the transaction value method. It is a working guide, not legal advice, and unusual transactions can change the answer.
| Cost item | In value for duty? | Notes |
| Price paid or payable for the goods | Yes | The starting point for the transaction value |
| Packing costs incurred by the buyer | Yes | Includes materials and labour for packing |
| Commissions and brokerage (other than buying commissions) | Yes | Fees paid to an agent acting for the seller are added if not in the price |
| Buying commissions | No | Fees paid to your own purchasing agent need not be included |
| Royalties and licence fees related to the goods | Yes | When they relate to the imported goods and are a condition of sale |
| Assists (tooling, moulds, materials, engineering supplied by the buyer) | Yes | Value is added even if the supplier’s invoice does not show it |
| Resale proceeds that accrue to the vendor | Yes | Only the portion that returns to the vendor |
| Origin inland freight and handling to the place of direct shipment | Yes | Common under EXW and some FCA terms |
| Origin export clearance and terminal charges | Generally yes | Incurred at or before the place of direct shipment; confirm with your broker |
| Ocean or air freight to Canada | No | Deducted if included in the price |
| International cargo insurance | No | Deducted if included in the price |
| Transshipment, intermodal rail or trucking inside Canada | No | Arises after the place of direct shipment |
| Canadian customs brokerage fees | No | Deducted if included in the price |
| Canadian duties and taxes | No | Deducted if included in the price |
| Post-importation services, separately identified | No | Must be shown separately from the price of the goods |
Two of these items deserve a closer look because they surprise first-time importers. Assists are the first. If you supply a mould, a die or design work to your factory without charge, CBSA treats the value of that contribution as part of what you effectively paid for the goods, even though it never appears on the supplier’s invoice. The second is the buying commission. A fee paid to your own sourcing agent for finding and inspecting goods is not added, but a commission paid to the seller’s agent generally is. The labels on the invoice do not decide the matter; the relationship and the function of the payment do.
Worked Examples With Real Numbers
Rules are easier to remember when they are attached to dollars. The examples below use round figures in Canadian dollars and an illustrative duty rate of 8.5 percent. Your actual rate depends on the tariff classification and the origin of the goods, and currency conversion should follow CBSA’s requirements for the date of direct shipment, so treat these as demonstrations of method rather than as rate guidance.
Example 1: A FOB Shipment Declared Correctly and Incorrectly
An importer buys goods FOB Shenzhen for CAD 30,000. The ocean freight to Vancouver is CAD 3,300 and cargo insurance is CAD 180, both invoiced separately by the forwarder. The correct value for duty is CAD 30,000. Some importers, however, add freight and insurance because they assume Canada works like the European Union. The comparison shows what that mistake costs.
| Line | Correct declaration | Freight and insurance wrongly added |
| Value for duty | CAD 30,000.00 | CAD 33,480.00 |
| Customs duty at 8.5% | CAD 2,550.00 | CAD 2,845.80 |
| Value for GST | CAD 32,550.00 | CAD 36,325.80 |
| GST at 5% | CAD 1,627.50 | CAD 1,816.29 |
| Total duty and GST | CAD 4,177.50 | CAD 4,662.09 |
| Overpayment | — | CAD 484.59 |
An overpayment of nearly CAD 485 on a single container may not sound dramatic, but a company clearing fifty containers a year loses more than CAD 24,000 and has to go through the correction and refund process to recover any of it.
Example 2: An EXW Shipment With Origin Costs
A buyer purchases goods EXW Dongguan for CAD 30,000 and appoints a forwarder to collect and ship them. The forwarder charges CAD 450 for trucking to Yantian, CAD 150 for export customs clearance and CAD 300 for origin terminal handling and loading. The ocean freight of CAD 3,300 is invoiced separately.
| Component | Treatment |
| Ex-works price: CAD 30,000 | Included |
| Origin trucking: CAD 450 | Included |
| Export clearance: CAD 150 | Included |
| Origin terminal handling and loading: CAD 300 | Included |
| Ocean freight: CAD 3,300 | Excluded |
| Resulting value for duty | CAD 30,900 (before any other required additions) |
The buyer in this example pays the same ocean freight as the FOB buyer in Example 1 but declares a value for duty that is CAD 900 higher. That is not a penalty. It is the correct reflection of the costs the buyer bore before the place of direct shipment.
Example 3: A CIF Invoice That Must Be Unbundled
A supplier invoices CIF Vancouver for CAD 33,480. The invoice shows no breakdown, but the supplier’s forwarder has issued a freight invoice of CAD 3,300 and an insurer has issued a certificate for CAD 180, both tied to the bill of lading number. The importer submits those documents to the broker, who deducts them and declares CAD 30,000.
Now change one fact. The supplier refuses to share the forwarder’s invoice and offers only a signed statement that “freight was about CAD 3,300.” This is exactly the type of evidence that struggled in the Korhani case. If CBSA denies the deduction, the importer pays duty and tax on the full CIF price, and the cost of the missing document becomes the same CAD 484.59 from Example 1, repeated on every entry.
Proof Matters: The Korhani Decision and the Documentation Burden
In Korhani of Canada Inc. v. CBSA (AP-2022-030), the appellant imported area rugs and claimed deductions for international transportation costs. To support the deductions it submitted vendor-issued commercial invoices, vendor-signed statements describing historic shipping rates, specific amounts the vendors said they had paid and averages of transportation costs over the relevant periods. CBSA denied the deductions because the evidence did not establish the actual transportation costs.
The CITT upheld CBSA’s position. According to the summary published by Millar Kreklewetz in January 2026, the Tribunal stressed that importers must demonstrate the actual costs ultimately paid to the freight company, rather than relying on costs negotiated between the importer and the vendor. Commercial invoices from the vendor, or documents showing estimated costs, are insufficient in most cases because they do not reliably reflect what the carrier was actually paid. By contrast, bank records, bills of lading and shipping invoices exchanged between vendors and shipping companies are usually considered objective and sufficient.
Just as important is the Tribunal’s insistence that evidence allow CBSA to verify costs transaction by transaction. Averages, estimates and generalized statements do not meet that standard, and where documents cannot link a specific freight charge to a specific importation, the deduction may be denied. For a forwarder, this is a very practical message: the way you invoice your customers can decide whether their deduction survives an audit.
| Type of evidence | Strength | Reason |
| Carrier or forwarder freight invoice tied to the bill of lading number | Strong | Objective record of what was actually charged for that shipment |
| Bank or payment records showing the freight was paid | Strong | Confirms the amount that actually left the account |
| Bill of lading showing the freight charge and shipment details | Strong | Links the cost to a specific movement |
| Vendor’s commercial invoice listing a freight line | Weak | Reflects a price between buyer and vendor, not the carrier’s charge |
| Vendor-signed statement of freight paid | Weak | Not independent and often not shipment specific |
| Average rate sheets or historical quotes | Weak | Estimates do not prove the cost of the specific entry |
| Quotations that were never invoiced | Weak | Quoted rates often differ from final billed amounts |
The practical lesson is to ask for the carrier’s invoice, or the forwarder’s invoice, at the time of booking and to store it with the entry. CBSA can verify declarations after release, and the burden of producing proof usually arrives long after the people who handled the shipment have moved on to other files.
Why Accurate Value for Duty Matters More in 2026
GST Is Built on Value for Duty, So Freight Stays Out There Too
Most goods imported into Canada are subject to the 5 percent federal goods and services tax. On a commercial import, the base for that tax is the value for duty plus the customs duty and any excise taxes or special duties and surtaxes that apply. Because international freight is not in the value for duty, it does not enter the GST base at the border either. Provincial taxes depend on the province and the type of shipment, so your broker should confirm how they apply to your imports.
This is why a freight error costs twice. As Example 1 showed, adding freight to the value inflates the duty, and then inflates the GST computed on top of the duty-paid value.
The September 2026 Counter-Tariff Surtax on U.S. Goods
The trade relationship between Canada and the United States moved into a new phase in 2026. According to law firm summaries on Legal 500, Canada announced counter-tariffs ranging from 15 percent to 50 percent on approximately CAD 27.6 billion of U.S. imports, effective September 8, 2026, in response to U.S. tariffs imposed under Section 338. The measures cover more than 700 product classifications across sectors that include steel, aluminum, dairy, appliances and electronics, and CBSA issued Customs Notice 26-23 to explain how the surtax is applied, calculated and collected.
For valuation, the important detail is that the surtax is calculated as a percentage of the value for duty, before GST or HST, and is then added to the amount on which GST is computed. Industry guidance also notes that the surtax can apply to shipments that would otherwise fall under low-value remission thresholds. Eligibility depends on the origin of the goods and not simply on where they were shipped from, so an error in either the value or the origin can have a large effect on the final bill.
The following illustration uses a hypothetical U.S.-origin consignment with a value for duty of CAD 10,000, a most-favoured-nation duty of 5 percent and a surtax of 25 percent. It then shows what happens if CAD 1,000 of freight is wrongly added.
| Line | Correct declaration | Freight wrongly added |
| Value for duty | CAD 10,000 | CAD 11,000 |
| Customs duty at 5% | CAD 500 | CAD 550 |
| Surtax at 25% | CAD 2,500 | CAD 2,750 |
| Value for GST | CAD 13,000 | CAD 14,300 |
| GST at 5% | CAD 650 | CAD 715 |
| Total duty, surtax and GST | CAD 3,650 | CAD 4,015 |
The extra CAD 365 on CAD 1,000 of freight shows the leverage that a surtax creates: each wrongly included dollar now draws roughly 36 cents of additional charges instead of the 14 cents or so it would draw at ordinary rates. Importers sourcing from the United States through consolidated warehouses should be especially careful about both valuation and origin documentation.
Anti-Dumping and Countervailing Duties on Chinese Goods
Importers of Chinese-origin products face their own layer of risk. Law firm bulletins report that CBSA imposed provisional anti-dumping duties of between 0 and 227.5 percent on certain Chinese decorative and non-structural plywood from August 24, 2026, and that investigations into truck and bus tires from China have preliminary determinations expected by November 30, 2026. Depending on the order, trade remedy duties can be an ad valorem rate applied to the value for duty or a fixed per-unit amount. In the first case, the value you declare feeds directly into the amount of duty, so a valuation error compounds quickly.
Anyone shipping goods that are or might be subject to a trade remedy order should check the applicable CBSA measures before booking, and should keep the supporting file for each entry.
Low-Value Shipments and Courier Programs
Canada has kept its own de minimis relief even as the United States suspended duty-free treatment for low-value parcels. Under the courier remission framework, thresholds of CAD 20 apply for most origins, and higher thresholds of CAD 40 and CAD 150 apply to qualifying courier shipments from the United States or Mexico. Eligible low-value shipments can move through the Courier Low Value Shipment program up to a value for duty ceiling of CAD 3,300. These tests are applied to the value of the goods, not to the freight charge, so for e-commerce sellers the freight question again affects the result: a seller who mistakenly includes shipping in the declared value may push a parcel above a threshold it would otherwise have met.
Common Mistakes Forwarders See on Canadian Entries
After years of handling cross-border cargo, certain errors appear again and again. The first is treating the Incoterm as if it were the customs rule. A seller’s CIF quotation does not make the freight part of Canadian value for duty, and a buyer’s FOB purchase does not guarantee that every origin cost has been captured. The Incoterm is an input, and the Customs Act is the standard.
The second is double-deducting. A broker sees an invoice, assumes freight is inside it and subtracts a freight amount from a price that was FOB all along. The result is an understated value for duty, which can lead to a reassessment, interest and administrative monetary penalties. CBSA is generally more concerned about a pattern of understatement than about an honest overpayment, so this mistake is the riskier of the two.
A third error is forgetting origin costs on EXW and FCA shipments. Trucking, export clearance and loading charges are easy to overlook because they are billed by the forwarder rather than the factory, but they belong in the value when they arise before the place of direct shipment.
The fourth is allocation. A single ocean freight invoice often covers several purchase orders, several suppliers or several customs entries. Under the transaction-by-transaction approach emphasized in Korhani, the importer should allocate the freight to each entry on a consistent and documented basis, such as weight, volume or declared value, and keep the calculation with the file. Guessing at the split, or applying an average rate, invites the same difficulty that sank the deduction in that case.
The fifth is currency. When goods are invoiced in one currency, freight in another and the entry has to be filed in Canadian dollars, the exchange rate used for each component should be consistent and appropriate under CBSA’s rules. Spot freight rates move quickly, and a stale estimate converted at the wrong rate can create a mismatch between the declared figure and the carrier’s final bill. Some customs advisers also warn that a pattern of freight understatements can trigger verification and penalties.
Finally, many importers overlook assists and royalties while concentrating on freight. Moulds, tooling and software or brand licences connected to the goods can raise the value for duty by more than any freight adjustment would lower it.
Building a Freight Paper Trail That Survives an Audit
A good documentation habit begins before the booking is confirmed. Ask the supplier to state on the commercial invoice the Incoterm, the named place, the unit prices and, if they are shipping CIF or delivered, a separate line for freight and insurance. Then ask the forwarder to issue invoices that separate origin charges, main carriage, destination charges and any Canadian inland movement. Tie every invoice to a bill of lading number and container number so the cost can be tracked to a specific entry.
Once the cargo is released, store the commercial invoice, the packing list, the bill of lading, the forwarder’s invoices, the payment proof and the broker’s valuation worksheet together. CBSA may ask for them in a post-release verification, and retrieving them months later from several mailboxes is a recipe for failure. Importers should also keep a short note explaining how multi-shipment freight invoices were allocated, because that reasoning is exactly what a verification officer wants to see.
Finally, give the broker complete information. A Canadian customs broker can only declare what the file reveals, and the best valuation outcomes come from sharing the sales contract, the Incoterm, evidence of any assists or royalties and a clear description of who is the importer of record. If the transaction involves related parties, deferred payments or unusual rebates, raise it early. Some trade commentary has pointed out that even freight subsidies or discounts paid by a government to an exporter may be considered an indirect payment in certain circumstances, which shows how many corners of valuation can affect the number.
How Topway Shipping Supports Canada-Bound Importers
Since 2010, Topway Shipping, headquartered in Shenzhen, China, has been a professional provider of cross-border e-commerce logistics solutions. Our founding team has more than 15 years of experience in international logistics and customs clearance, with a strong focus on China–U.S. transportation, and that background shapes how we think about valuation questions like the one in this article.
Our services span the full logistics chain, including first-leg transportation, overseas warehousing, customs clearance and last-mile delivery. We also provide flexible full-container-load and less-than-container-load ocean freight from China to major ports worldwide. Because we handle the first leg as well as the main carriage, we can help customers see exactly where the place of direct shipment sits in their journey and which charges fall on each side of it.
In practice, this means we structure quotations and invoices so that origin charges, ocean freight and destination charges appear as separate lines. For a Canada-bound importer, that makes the included and excluded costs in the tables above easy to identify, and it gives your broker the documentary evidence needed to support a freight deduction. For customers who are still choosing between EXW, FCA and FOB, our team can explain how each term changes both the logistics workflow and the declared value, so that the decision is made before the goods are produced rather than after they arrive.
Topway Shipping does not replace a licensed Canadian customs broker, and the final declaration remains the importer’s responsibility. What we can do is coordinate the movement, keep the shipping paperwork clean and consistent, and work alongside your broker so that the numbers on the entry match the numbers on the freight invoices. Whether you ship by FCL, consolidate through LCL or combine overseas warehousing with last-mile delivery, you can talk to our team about building a Canada-ready workflow.
Conclusion
International freight is generally not included in the Canadian value for duty. Canada measures value at the place of direct shipment, so ocean or air freight to Canada, the related insurance, transshipment, Canadian inland transport, brokerage and Canadian duties and taxes are excluded or deducted, while costs incurred up to the place of direct shipment, such as origin trucking and export handling, are normally included. Assists, royalties, packing and certain commissions are added regardless of the freight terms.
What turns this simple rule into a compliance issue is evidence. The Korhani decision shows that a deduction depends on documents proving the actual amount paid for the specific shipment, and estimates, averages and vendor statements rarely suffice. In 2026, with a counter-tariff surtax on certain U.S. goods, active trade remedy cases against Chinese products and continuing scrutiny of low-value imports, the cost of getting the value wrong is higher than it used to be.
The best defence is a combination of clear Incoterms, itemized freight invoices tied to bills of lading, consistent allocation across entries and early communication with your customs broker. If you are planning a shipment to Canada and want a forwarder who will separate the charges clearly and help keep your documents audit-ready, Topway Shipping is ready to help you plan the route and the paperwork together.
FAQs
Q: Is ocean freight included in the value for duty in Canada?
A: Generally no. Canada excludes international transportation and insurance costs that arise after the goods leave the place of direct shipment. If your supplier includes them in the price, for example on CIF terms, they should be deducted with supporting documents.
Q: Do I pay GST on international freight when I import into Canada?
A: The import GST is calculated on the value for duty plus customs duty and any excise taxes or surtaxes. Because international freight is not part of the value for duty, it is not part of that base. Provincial taxes and domestic services may be treated differently, so confirm with your broker.
Q: What if my supplier quotes CIF and will not itemize the freight?
A: The deduction is at risk. CBSA and the CITT expect objective proof of the actual freight paid, such as carrier or forwarder invoices and payment records. Ask for those documents before accepting CIF terms, or buy FOB or FCA and book the freight through your own forwarder.
Q: Does EXW or FOB change the duty I pay?
A: It can. Under EXW, origin costs up to the place of direct shipment are not in the supplier’s price and need to be added, so the value for duty is higher than the invoice price. Under FOB, the invoice price is usually close to the correct value.
Q: Is cargo insurance included in the Canadian value for duty?
A: International insurance on the journey to Canada is generally excluded, in the same way as freight, provided it is identified and supported. Insurance that covers the goods only up to the place of direct shipment is treated differently, so check the policy with your broker.