Tariff Classification

When you're importing goods for government contracts—whether it's IT equipment for SSC or supplies for DND—you need to assign the correct Harmonized System (HS) code to each product. That's tariff classification. Get it wrong, and you're looking at delays, penalties, or duty reassessments that can derail your contract timeline.

How It Works

Canada uses a 10-digit classification system based on the World Customs Organization's Harmonized System. The first six digits are standardized internationally, while the additional four digits are Canada-specific extensions that allow for more precise categorization. According to the CBSA's guide to tariff classification, the system organizes goods into 21 sections and 99 chapters—with Chapters 98 and 99 reserved for special Canadian uses like temporary imports or specific tariff treatments.

Here's the thing: accurate classification isn't just about following rules. It determines the duty rate you'll pay, which trade agreements apply (like CUSMA), and whether your goods qualify for preferential tariffs. Since May 3, 2004, these codes have been mandatory on all customs invoices. In practice, suppliers often classify their own goods, but as the importer of record, the government department bears ultimate responsibility for accuracy. That means if your vendor gets it wrong, you're still on the hook.

The CBSA's D10-series memoranda provide detailed guidance on classification principles—Memorandum D10-14, for instance, covers the tariff classification of specific goods categories. If you're uncertain about a classification, particularly for complex or novel items, you can request an advance ruling from CBSA. This gives you a binding decision on the correct 10-digit code before you commit to an import, which can save considerable headaches during customs clearance.

Key Considerations

• Classification drives more than duties: The code you assign affects whether goods can enter Canada at all, what documentation you need, and whether they're subject to trade remedies or import controls. A seemingly minor error can trigger compliance reviews.

• Chapters 98 and 99 matter for government: These special classifications cover temporary imports, diplomatic goods, and specific government transactions. Your procurement team should understand when these apply to avoid overpaying duties on goods that qualify for special treatment.

• General Interpretive Rules apply: The Customs Tariff includes six GIRs that determine how to classify goods when multiple codes might apply. You can't just pick the code that seems closest—there's a hierarchy and methodology you must follow.

• Supplier classifications aren't always reliable: Many vendors provide HS codes on their commercial invoices, but these may reflect classifications from other countries or be outdated. CBSA holds the importer accountable, not the exporter. Double-check everything.

Related Terms

Duty Drawback, Customs Broker, Certificate of Origin, Country of Origin

Sources

• Guide to tariff classification for Canadian imports (CBSA)

• Tariff information and Harmonized System codes (Global Affairs Canada)

• Guide to tariff classification: Resources (CBSA)

When in doubt, consult CBSA's classification resources or request an advance ruling. The time you invest up front beats explaining a misclassification to Treasury Board after the fact.