Chapter 5: Failure to Take Advantage of Canada’s Non-Resident Importer Program

Chapter 5: Failure to Take Advantage of Canada’s Non-Resident Importer Program

Every shipment arriving at the Canadian border must have a designated party responsible for overseeing the clearance process, and paying all duties, taxes, and fees.  That party is referred to as the “importer of record” and in Canada, American businesses are prohibited from acting as importer of record unless certain conditions are met.

Specifically, those conditions include:

• Registering for a Business Number with the Canada Revenue Agency; and then
• Registering for CBSA’s Non-Resident Importer Program.

The Non-Resident Importer Program essentially “levels the playing field” for U.S. businesses seeking to compete in the Canadian market.  As an NRI, a U.S. business can act much the same as a Canadian company by addressing several customs-and-logistics related obstacles, including:

• Ability to collect duties, taxes and customs-related fees at time of purchase.  This includes up-front collection of Canada’s Goods and Services Tax, along with required Provincial Sales Taxes and Harmonizes Sales Taxes.  Without NRI status, these taxes and fees cannot be collected at time of purchase and instead, a Canadian buyer may be presented with an unexpected invoice at time of delivery.
• Ability to clear goods through customs.  By acting as the importer of record, an NRI assumes complete control for a Canada-bound shipment.  This in turns gives the NRI insight into a shipment’s border clearance process. An NRI can ensure that a shipment is assigned the proper tariff classification, takes advantage of all applicable free trade agreements, and is entirely compliant with CBSA mandates.
• Reduced supply chain expenses.  NRI status offers the tremendous benefit of not having to maintain a physical presence in Canada – including Canada-based warehouses, distribution centers, stores or any other physical assets.  Instead, a U.S.-business may build a supply chain that best fits its business model, without the expense of taking on Canadian assets. In addition, NRI shipments are eligible for consolidation, which means smaller shipments may be combined into one larger shipment for a more efficient border clearance process, and reduced freight charges.  

Canada’s Non-Resident Importer program is an important tool in minimizing customs delays and facilitating service to the Canadian market.  However, CBSA does not proactively market the program, and many logistics providers do not “automatically” inform shippers about its benefits.  

If your shipping partner has not suggested registering for the NRI program, your business should take the initiative.  It’s possible your Canada-bound shipments are experiencing customs delays and customer inconveniences that could be easily corrected.