Customs Tariff

The Customs Tariff is Canada's statute and tariff schedule governing how imported goods are classified and which customs duties, tariff treatments and import restrictions apply to them. It is administered at the border by the Canada Border Services Agency (CBSA) and is a routine reference in federal procurement documents.

In a solicitation or contract, a reference to the Customs Tariff can mean one of two things: the Customs Tariff Act itself, or the Customs Tariff schedule, including specific tariff-item numbers. A tariff item is a numbered entry in the schedule used to classify goods and to apply a duty, a relief or a prohibition. Reading the clause closely tells you which meaning the buyer intends.

Customs Tariff Act and Customs Tariff schedule

The Act is the legislative authority. The schedule is the working list of tariff items that gives each class of goods its treatment. Procurement clauses tend to cite the schedule when they name a tariff item, and the Act when they cite a section such as section 136(1).

The Customs Tariff sits alongside the Customs Act, which governs customs administration and tariff-classification determinations. The Tariff says what applies to a good, and the Customs Act governs how CBSA decides and administers it.

Tariff item 9982.00.00 and duty remission on defence supplies

Defence solicitations on CanadaBuys and related documents use the Customs Tariff to deal with duties on imported defence supplies. One defence solicitation identifies tariff item 9982.00.00 as the basis on which customs duties on qualifying imported defence supplies may be remitted. The solicitation is available at this CanadaBuys notice document.

The same solicitation requires delivery Delivered Duty Paid (DDP), Incoterms 2020, at the named delivery location. It also requires prices to include Canadian customs duties and excise taxes while excluding applicable taxes.

Who handles duties: the contractor or DND

CanadaBuys sets out the rules for defence contracts and defence supplies. Solicitations and contracts valued at $250,000 or more that involve imported defence supplies must include appropriate customs-duty clauses when the contractor is the importer.

• Contractor as importer: the contractor must pre-arrange remission on importation, or pay the customs duties and apply to CBSA for a refund.
• DND as importer: for contracts valued at $250,000 or more, the contract must advise that the Department of National Defence (DND) is responsible for arranging remission or paying the duties and seeking a CBSA refund.
• Certification: DND must apply to Public Services and Procurement Canada (PSPC) in sufficient time for the certification required under the Customs Tariff.

Forced-labour import prohibition

The Customs Tariff also works as a prohibition. The Supply Manual annexes state that section 136(1) of the Customs Tariff and tariff item 9897.00.00 prohibit importing goods mined, manufactured or produced wholly or partly with forced or compulsory labour, including forced child labour.

If a tariff-classification determination indicates that the work or goods are prohibited from importation, the contractor must immediately notify the contracting authority in writing.

What the Customs Tariff means for a supplier bidding on Canadian public contracts

Check who is the importer before you price. Where you are the importer on an imported defence supply, you carry the duty obligation: arrange remission in advance or pay and claim a refund from CBSA. Where DND is the importer, the contract assigns that task to DND.

Build customs duties and excise taxes into offer prices when the solicitation requires it, and confirm the delivery term, since DDP puts import obligations on the seller. Know the tariff classification of the goods you supply, and be ready to notify the contracting authority in writing if a determination shows the goods are prohibited from import.