If you’re importing goods into Canada for the first time, working with a customs broker can be extremely helpful. The import process involves paperwork, regulations, and fees that can quickly become complicated. Even a small mistake could result in unexpected delays and additional costs.
But what do customs brokers do, and how do you choose a customs broker in Canada?
In this guide, we cover everything you need to know about customs and brokerage, along with tips for finding a licensed customs broker who understands your business needs.
What Does a Customs Broker Do?
A customs broker helps businesses bring goods into the country by handling the entire customs clearance process. It ensures you meet government requirements for legal goods importation.
In Canada, a customs broker works with the Canada Border Services Agency (CBSA). This government agency enforces import rules.
These are just a few tasks a Canada customs broker may handle.
- Preparing Customs Documents: Your customs clearance agent will gather necessary information for the shipment.
- Classifying Goods: They identify the correct product category and tariff code.
- Calculating Duties and Taxes: Importation fees can be confusing. A customs clearance broker can help determine which taxes and duties apply.
- Arranging Customs Release: The customs clearance company works with the CBSA for the quick release of your goods.
- Keeping Records: The import customs broker also keeps records for any customs issues.
Do You Need a Customs Broker to Import into Canada?
Hiring a customs broker can make the whole importation process easy. However, you don’t necessarily need a customs broker to import into Canada.
You can handle the customs process yourself by preparing and submitting the documents the CBSA requires.
Self-Clearing Your Goods with the CBSA
Self-clearing customs in Canada means you meet the requirements yourself instead of paying a broker to do it. This includes providing information about your goods and submitting the declarations.
You’ll also need to register in the CBSA Assessment and Revenue Management (CARM) Canada Client Portal.
Self-clearing is ideal for those with straightforward shipments. That said, mistakes can lead to delays and extra costs.
Carrier Brokerage vs. an Independent Customs Broker
When you import goods into Canada, you usually have two options for customs clearance. You can either use the brokerage services offered by your shipping carrier or hire an independent customs broker.
Carrier brokerage is a service provided by the company transporting your goods. The courier may offer to handle customs paperwork when delivering an international package.
Independent customs brokers, on the other hand, are separate service providers. You choose the broker yourself.
Which one to pick depends on your goods and shipment volume.
If you only import occasional parcels, a carrier brokerage offers convenience. You may pick an independent broker for specialized goods and complex shipments.
What to Look for in a Canadian Customs Broker
Selecting the right import broker in Canada saves time and prevents costly mistakes. Here’s what to look for.
1. Licensing and Regulatory Compliance
Start by checking whether the provider is a licensed customs broker in Canada. The CBSA issues these licences before a broker can operate.
A licensed broker should understand import regulations. They also know how to submit the required documents.
2. CARM Readiness and Release Prior to Payment Support
The CBSA Assessment and Revenue Management (CARM) system assesses and collects duties and taxes. Your broker should understand how CARM works so you can remain compliant.
You should also ask them about Release Prior to Payment (RPP). This program allows eligible importers to have their goods released before paying taxes – a great option for cash flow management.
3. Experience with Your Industry and Goods
Different products will have different import requirements. Therefore, you should look for a broker with experience importing your goods.
You avoid mistakes and delays when you work with an experienced Canadian import broker. A good tip is to ask the broker whether they understand the tariff classifications, duties, and restrictions relevant to your goods.
4. Cross-Border Coverage for Canada and the U.S.
If you’re importing goods from the U.S., having a broker who understands the requirements from both sides is crucial.
Your goods may be subject to different customs rules and import procedures. Because of this, you should check whether the broker has cross-border experience.
5. Freight Forwarding and Warehousing Capabilities
Some customs brokerages in Canada have services beyond customs clearance. They may provide freight forwarding and even warehousing.
These services can be useful, especially if you want someone who can manage several parts of your supply chain.
6. Responsive, Accessible Support
One of the most overlooked factors in choosing a customs broker is accessible support. Your customs broker should answer your questions as soon as possible.
You’ll feel at ease with a broker that explains things clearly and responds quickly. A good tip to achieve this is to ask who your main point of contact is.
7. Technology and Shipment Visibility
Today, technology plays a huge role in customs brokerage services. Many brokers use digital tools to manage shipments and track clearance progress.
Look for services that make it easier to monitor your shipments.
Having online tracking and automated status updates can help you spot delays. Meanwhile, having client portals lets you stay organized and track shipment records.
How Much Does a Customs Broker Cost in Canada?
The cost of hiring a customs broker in Canada depends on the services you need. Some brokers charge a flat fee for each shipment. Meanwhile, others price it based on complexity.
The most affordable import broker fees start at $35 CAD. Commercial shipments, on the other hand, can cost $1,000 CAD or more.
When you’re comparing Canada customs broker fees, it’s important to understand what you’re paying for. The final customs broker price should include service fees, duties and taxes, and all extra charges.
Questions to Ask Before You Hire a Customs Broker
Before choosing a customs broker, take the time to ask a few questions. Doing so allows you to find the best fit for your requirements.
These are a few practical questions to ask.
- Are they licensed by the CBSA? Confirm their license number on the CBSA website.
- Have they worked with businesses like yours? Ask whether they have experience with your industry or shipment size.
- What services do they have? Some brokers offer additional services that you may find useful.
- Can they help with CARM? Ask whether they can guide you through the CARM process of authorizing a broker.
- What risks are associated with importing your goods? Ask them how they will mitigate these risks.
- How much will they charge for their services? Knowing the cost allows you to prepare for the shipment.
- Who will handle your account? Find out how you can receive support if you encounter issues with a shipment.
Once you have the answer, you can compare different brokers to determine the best option.
Red Flags to Watch For
Choosing the wrong customs broker can lead to paperwork errors, delays, and extra costs. That’s why you should recognize warning signs before signing an agreement.
Here are a few red flags to look out for.
- Unclear Pricing: The customs broker doesn’t give a formal quotation or refuses to explain the price breakdown.
- Promises of Guaranteed Clearance: Be wary of unrealistic promises. No broker can guarantee that every shipment will clear customs without inspections or delays.
- Limited Knowledge of CARM: Brokers should understand how the CARM client portal works. They should be able to explain how this system affects you.
- No Verifiable License: Don’t rely on the broker’s claims. Always verify their license number through the CBSA website.
- Poor Communication: If a broker takes too long to answer questions, you may struggle to get help when a shipment runs into trouble.
- Pressure to Sign Quickly: A trustworthy broker should give you enough time to review the agency agreement. Take your time and ask follow-up questions if necessary.
How to Set Up or Switch to a New Customs Broker
If you’re switching customs brokers, your new broker will need time to set up. The preparation period includes signing the agent agreement and permitting them to act on your behalf.
1. Business Number and Import/Export Account
You’ll need to make sure your business has the right import account.
Before importing goods into Canada, you should have a Business Number (BN) from the Canada Revenue Agency. In addition, you must have an import-export program or RM account.
Your BN identifies your business whenever you’re dealing with the government. The RM account identifies your business for import and export activities.
2. Delegating Authority in the CARM Client Portal
Once you’re registered in CARM, you must authorize your customs broker to act on your behalf. This process is called delegating authority.
Delegating authority gives your broker the power to perform specific tasks and allows them to handle your shipments.
Note that you must register your own business in CARM. Your broker can’t do this for you, but they can guide you through the process.
3. Reviewing and Signing the Agency Agreement
Finally, you’ll need to sign a general agency agreement before the broker starts handling your shipments.
The agency agreement authorizes the broker to conduct customs-related tasks on your behalf. It also details the services, fees, and responsibilities of both parties.
You should read this agreement carefully before signing.
Why Importers Choose JORI Logistics
When you’re choosing a logistics partner, you’ll want one that understands your business. Having a broker that can manage the process from start to finish is ideal.
That’s where JORI Logistics comes in.
Founded in 1992, JORI Logistics has provided customs brokerage services to thousands of clients. As a family-owned company, JORI combines customer service with technology for your transportation needs.
Aside from customs brokerage, JORI Logistics can also assist with:
If you’re new to importing, JORI also provides educational resources. We’re here to guide you through the customs and logistics processes.
So, are you ready for simple and hassle-free customs brokerage services? Explore JORI Logistics’ website today to learn more!
FAQs
Who Are the Top Customs Brokers in Canada?
Some of the best customs brokers in Canada include JORI Logistics, AMZ Prep, and Cole International. These companies are industry experts that can provide hassle-free experiences clearing shipments.
You may also check the CBSA website for an in-depth list of customs brokers in Canada.
Does My Customs Broker Need to Be Near My Port of Entry?
No. Your customs broker doesn’t need to be near your port of entry. Canadian customs brokers can operate at customs offices across Canada.
Instead of location, look for a broker with enough experience to handle your shipment. A communicative broker can address customs issues wherever they arise.
Who Is Responsible if There Is an Error on My Customs Entry?
A customs broker can help you spot errors. However, your business is still legally responsible for errors, even with a customs broker. These can include discrepancies in the value of the goods, country of origin, or tariff classification.
If customs discover an error, you must correct the declaration or pay additional duties and taxes.
Can a Non-Resident Importer Use a Canadian Customs Broker?
Yes. Non-resident importers can use a Canadian customs broker.
You must still meet the import requirements. That said, a Canadian customs broker can manage customs declarations and arrange the release of goods.
What Documents Does a Customs Broker Need to Clear Goods Into Canada?
These are the typical documents your customs clearance broker will ask for. Note that the exact documents depend on the type of goods you’re importing.
- Commercial Invoice: The Commercial Invoice describes the value of the goods.
- Packing List: The Packing List shows what’s inside the shipment.
- Bill of Lading: The Bill of Lading provides information about the shipment and its transportation.
- Certificate of Origin: This identifies where the goods were manufactured.
- Import Permits: Some regulated goods need import permits.
- Business Details: Your customs broker will need your Business Number and RM account.
