Tariff Classification

Tariff classification is the determination of the tariff item under which imported goods are classified for customs purposes. In Canada, that determination is made under the Customs Tariff and related customs legislation. The tariff item decides the customs treatment that applies to the goods, including whether bringing them into the country is prohibited.

Tariff classification is not the same as the codes used to describe what a government buyer wants to purchase. CanadaBuys uses the United Nations Standard Products and Services Code (UNSPSC) to identify goods and services in procurement notices, while tariff classification is a customs matter about imported goods. The two systems answer different questions, and suppliers who sell imported goods to the Government of Canada need to understand both.

The Customs Tariff and the Harmonized System

Canada's customs classification rests on the Customs Tariff, which contains the tariff schedules and the individual tariff items. The structure underneath is the Harmonized Commodity Description and Coding System, a structured classification system for goods that Canada and most trading nations have adopted for customs purposes. The Supply Manual annexes on CanadaBuys identify the Harmonized System in exactly these terms.

A classification decision places a product under one tariff item. That placement is what determines how customs law treats the product at the border.

Tariff item 9897.00.00 and forced-labour clauses

Tariff classification appears most concretely in Public Services and Procurement Canada (PSPC) contract clauses on forced labour. The Government of Canada's general terms and conditions for low-complexity goods and services contracts include an anti-forced-labour requirement. Under it, the contractor must not deliver to Canada or import goods whose importation is prohibited under section 136(1) of the Customs Tariff and tariff item 9897.00.00. That tariff item covers goods mined, manufactured or produced wholly or partly by forced labour.

• Notification: if a tariff-classification determination under the Customs Act establishes that importing the work, or part of it, is prohibited, the contractor must immediately notify the contracting authority in writing.
• Termination: if goods are classified under tariff item 9897.00.00, Canada may terminate the contract for default.
• Discretion: PSPC guidance in the Supply Manual annexes states that a CBSA classification does not automatically terminate a contract. It gives PWGSC the option to terminate or not.
• Standing offers: the same duty applies to offerors. Policy Notification 150u1 covers the anti-forced-labour requirements, including notice to the standing-offer authority when a tariff-classification determination makes importation prohibited.

Solicitation documents posted on CanadaBuys, including defence-related ones, reproduce these clauses. Examples include this request for proposals and this tender document.

How tariff classification differs from UNSPSC and GSIN

Three different coding ideas appear in Canadian procurement, and they are easy to confuse.

• Tariff classification assigns imported goods to a tariff item for customs purposes.
• UNSPSC is the open, global standard the Government of Canada uses to identify goods and services in procurement, as explained in how to find tender opportunities on CanadaBuys.
• GSIN, the Goods and Services Identification Number, is used for procurement commodity identification. Contracting officers must make sure the GSIN on a requisition is accurate according to CanadaBuys commodity codes, because commodity classification can affect trade-agreement treatment. That process is not tariff classification.

Getting a GSIN or UNSPSC code right does not settle how customs classifies the goods, and a customs classification does not change how a tender is coded.

What tariff classification means for a supplier bidding on Canadian public contracts

If your bid involves goods brought into Canada, tariff classification becomes a contract obligation once you win. Confirm that the goods you supply may lawfully be imported and that they comply with the Customs Tariff and its import prohibitions. Make sure none of them fall under tariff item 9897.00.00 as forced-labour goods. Tell the contracting or standing-offer authority promptly if a customs classification determination or a related investigation affects whether the goods can be imported. Read each solicitation for its own customs, pricing and delivery requirements, since these vary by contract.