Tax & Trade Blog

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CANADIAN SANCTIONS: DIFFICULT TO AVOID!

RECENT FCA DECISION DEMONSTRATES DIFFICULTIES FACING THOSE SEEKING RELIEF

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Canada maintains a broad and expanding sanctions regime, including measures targeting individuals connected to designated countries and restricted transactions which we have previously written about here. Once listed under Canadian sanctions, available remedies are limited. The primary resource is typically an application for judicial review before the Federal Court of Canada.

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CHAT GPT, HAVE I COMMITTED CUSTOMS FRAUD?

UPTICK IN FRADULENT UNDER-VALUATION WITH NEW TARIFF ENVIRONMENT

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Not since the 1980s and ‘90s has our specialized Customs, Trade & Indirect Tax Firm seen such an uptick in clients with significant under-valuation issues with the Canada Border Services Agency (“CBSA”).

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HEALTH CANADA & MEDICAL DEVICE CLASS

HEALTH CLAIMS MAY CAUSE CHANGE IN MEDICAL DEVICE CLASSIFICATION!

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As an International Trade Firm, a good part of our international trade practice is focused on product regulatory issues related to the importation, distribution and sale of regulated products in Canada. One highly regulated set of products is various Health Products regulated under the Canadian Food and Drugs Act (the “FDA”).

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COST AWARDS IN TAX LITIGATION

PROSPECTIVE TAX COURT LITIGANTS MUST UNDERSTAND COST RISKS

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"Costs" are awarded to successful litigants in tax litigation, as in most forms of litigation, but are not well understood by the public. Indeed, many litigants may head to the Tax Court of Canada (“TCC”) without first understanding the rules behind cost awards and without contemplating how these "costs" awards work when on the losing end of the litigation and/or appreciating that they may well be on the hook for the government’s legal bills when they do lose.

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NOT ALL DESIGN COSTS COUNT FOR DUTIES!

IMPORTER “WIN” AS CITT EXCLUDES CERTAIN DESIGN COSTS FROM VALUE FOR DUTY

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For businesses importing goods into Canada, the transaction value method (“TVM”) is the most commonly applicable method for determining the value for duty (“VFD”) under the Customs Act. However, for Canadian subsidiaries of foreign businesses, disputes often arise with the Canada Border Services Agency (“CBSA”) over VFD-related issues such as (1) the relevant “sale for export”, (2) purchaser in Canada status, and (3) inclusion of various design costs.

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ANTI-DUMPING – WHO IS THE EXPORTER?

CITT DECISION PROVIDES CLARIFICATION IN TRANSACTIONS WITH INTERMEDIARIES

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Anti-dumping duties (“ADD”) under the Special Import Measures Act (“SIMA”) generally apply where the normal value of targeted imported goods exceeds their export price. However, determining what ADDs are payable on particular goods may first require identifying who the “exporter” of the goods actually is in the circumstances since that will affect the normal value/export price.

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LATE TAX OBJECTIONS FACE STRICT DEADLINES

NO SECOND CHANCES WHEN APPLYING FOR AN EXTENSION OF TIME TO OBJECT

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A Notice of Objection (“NoO”) may be filed late – but ONLY if certain conditions and deadlines are met. Many taxpayers are unaware of the ability to apply for a late filing, and equally unaware that when THOSE deadlines are missed, it is all over!

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STEEL REMISSION OPPORTUNITIES

AVAILABLE, BUT IF NOT AUTOMATIC, IT WILL BE A REAL WAITING GAME!

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We have written about Canada’s many different surtaxes on steel goods here and here , and Canada’s extension of some of these steel surtaxes (including horizontal tariff relief) here .

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REMEDIES CONSTRAINED IN JUDICIAL REVIEW

FEDERAL COURT CONFIRMS REDETERMINATION REMAINS USUAL REMEDY

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An application for Judicial Review (“JR Application”) in the Federal Court can be an important tool for taxpayers to challenge decisions by the Canada Revenue Agency (“CRA”) that appear unreasonable, including decisions denying interest and penalty relief.

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EXPIRY REVIEW & EXCLUSIONS: REFINED SUGAR

ANTI-DUMPING REVIEW IS AN OPPORTUNITY TO REQUEST PRODUCT EXCLUSIONS

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On July 2, 2026, the Canadian International Trade Tribunal (“CITT”) announced the initiation of an expiry review (“Review”) on the dumping and subsidizing of refined sugar from the United States, Denmark, Germany, the Netherlands, and the United Kingdom. On July 3, 2026, the Canada Border Services Agency (“CBSA”) similarly gave notice of the initiation of its parallel expiry review investigation.

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TRUMP PLAYS HARDBALL WITH CANADA

NEW 50% US TARIFFS DIRECTLY LINKED TO CANADA'S SUPPLY MANAGEMENT POLICIES?

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On July 20, 2026, President Donald Trump invoked a Great Depression-era trade statute to announce 50% tariffs on a wide array of Canadian exports. The sweeping orders rely on Section 338 of the Tariff Act of 1930 (“Section 338”, codified at 19 U.S. Code § 1338) and specifically target Canadian dairy, alcohol, and automobiles.

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SETTLER’S EFFECT RULES WHEN MOVING TO CANADA

PERSONAL AND HOUSEHOLD GOODS CAN BE IMPORTED DUTY-FREE WHEN IMMIGRATING

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Canada allows newcomers to Canada to import personal belongings duty-free under the "Settler's Effects" tariff classification, HS Code No. 9807.00.00 (the “Settler’s Effects HS Code”). However, the Canada Border Services Agency (“CBSA”) maintains strict policies with respect to using the Settler’s Effects HS Code.

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SURETY BONDS CAUGHT IN INSURANCE TAX NET

SUPERIOR COURT CONFIRMS SURETY BONDS SUBJECT TO CORPORATE INSURANCE TAX

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Commercial surety bonds ("Surety Bonds") are a vital but frequently misunderstood staple of international trade. Importers and customs brokers rely on Surety Bonds to secure various financial obligations with the Canada Border Services Agency ("CBSA"), including Release Prior to Payment ("RPP") bonds under CARM, bonded warehouses, carrier agreements, and customs appeal bonds.

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CANADA CONSULTS ON FORCED LABOUR BAN

CONSULTATIONS ON BILL C-35 CLOSE ON AUGUST 21, 2026

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We have previously written about Canada's draft forced labour laws in Bill C-35 here . Canada has now launched public consultations with respect to Bill C-35, with the consultation period remaining open from July 27 to August 21, 2026.

In this Customs & Trade Report, we review the key details importers need to know regarding the public consultations on Bill C-35.

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IGNORING CRA COULD LEAD TO JAIL!

COURT ISSUES 30-DAY JAIL THREAT TO TAXPAYER FOR NONCOMPLIANCE

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We have previously written about Requests for Information ("RFI") issued to taxpayers under audit by the Canada Revenue Agency ("CRA") – and the importance of complying with CRA RFIs, with assistance from Experienced Tax Counsel.

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STORED AVIATION FUEL SALES – GST LIABILITY

CRA POSITION ON TAXABLE “INTO-TANK” FUEL SALES CREATES REAL GST RISKS

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A longstanding GST/HST issue in the aviation industry has been whether aviation fuel purchased for use on international commercial flights remains zero-rated when it is delivered into airport storage tanks or “fuel farms”, rather than directly “into the wing” of an aircraft. In recent roundtable discussions with the Canada Revenue Agency (“CRA”), the Agency maintained its position that fuel delivered into storage tanks is taxable because of the risk of diversion to other uses.

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TCC: NO EASY WAY TO PRE-PAY QUARTERLY GST

TAX AUTHORITIES WILL NOT AUTOMATICALLY APPLY SURPLUS TO INSTALLMENTS DUE

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Quarterly GST/HST installments are a persistent administrative headache for many business owners. However, a recent Tax Court of Canada (“TCC”) decision proves there are no easy shortcuts around these recurring compliance duties.

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CBSA TARGETING CARPETS AND AREA RUGS?

VERIFICATION AUDITS FOCUSING ON CLASSIFICATION UNDER CHAPTER 57

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A good part of our Tax and Trade practice involves advising Clients in the Textiles industry on matters involving Canadian customs duties and taxation on imported goods.

Recently, we have seen an increase in Canada Border Services Agency (“CBSA”) verification audits and assessments involving carpets and area rugs. One focal point seems to be the application of Tariff Chapter 57 of the Customs Tariff (“CT”), which contains many of the Harmonized System (“HS”) Classification codes for carpets and similar textile floor coverings. Improper tariff classification can lead to significant duty assessments and penalties, even for importers who have “always used” a particular tariff code without issue.

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TEMU & ALIEXPRESS PLEDGE TO HEALTH CANADA

MARKETPLACES JOINING PLEDGE IS GOOD NEWS FOR DIRECT SELLERS

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Health Canada’s Canadian Product Safety Pledge (the “Safety Pledge”), which we have previously discussed here, continues to expand, with online marketplaces Temu Canada and AliExpress now joining Amazon Canada and eBay Canada as signatories.

The Safety Pledge is a voluntary compliance initiative aimed at increasing product safety for consumer products and cosmetics available to Canadians online. By signing the Safety Pledge, Temu Canada and AliExpress have committed to taking 14 preventative and corrective actions intended to strengthen the safety of products sold through their platforms.

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CUSTOMS VALUATION & STEEL IMPORTS

GETTING VALUE FOR DUTY RIGHT IN THE STEEL INDUSTRY

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The US-Canada trade dispute created a trade environment that makes proper customs valuation a critical issue for businesses in the steel industry. In particular, getting the value for duty correct (and avoiding costly assessments by the CBSA and US CBP) is critically important when one considers that ordinary customs duties, surtaxes, special tariffs, and anti-dumping duties could potentially apply depending on the steel imports in question.