BONDED WAREHOUSES DO NOT STOP TRQ CLOCK
CBSA: STEEL IMPORTERS NEED UPFRONT QUOTA BEFORE IMPORT!
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We have previously written about Canada’s Steel Tariff Rate Quota (“TRQ”) regime here and here. For Canadian importers of steel into Canada, not originating from either the US or Mexico, the name of the game has recently been to ensure that all imports fall within Canada’s applicable TRQ regime.
MISSED A GST/HST REBATE DEADLINE?
TCC SAYS SUBSECTION 296(2.1) MAY NOT SAVE LATE GST/HST REBATE CLAIMS
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Taxpayers who fail to file a GST/HST rebate application within the applicable two-year limitation period may, in some circumstances, look to the relieving provisions in subsection 296(2.1) of the Excise Tax Act (“ETA”) for assistance. That provision seemed to require an otherwise unclaimed (or statute-barred) GST/HST rebate to be applied against a taxpayer’s net tax if the period was later audited.
FCA OVERTURNS CITT IN MEDLINE
FCA RESTORES NARROW “FOR USE IN” TEST FOR CHAPTER 99 RELIEF
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Importers seeking duty relief under Chapter 99 of the Customs Tariff often need to establish that imported goods are “for use in” other qualifying goods or activities. In Canada (Attorney General) v. Medline Canada Corporation, 2026 FCA 74 (“Medline Canada”), the Federal Court of Appeal (“FCA”) clarified that this phrase requires more than goods being used together in a practical or commercial sense with limited or no physical connection — overturning a prior Canadian International Trade Tribunal ("CITT”) decision.
NOTICE OF ASSESSMENT NOT RECEIVED. CAN I APPEAL?
TAX COURT SETS FOUR-STEP PROCESS FOR GETTING NOTICES OF OBJECTION BACK ON TRACK
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When it comes to filing a Notice of Objection (an “Objection”) in respect of a Notice of Assessment (an “NOA”) for GST/HST or income tax matters – or many other matters involving federal taxes – most taxpayers will know that they generally have a 90-day window to file that Objection.
TARIFF CLASSIFICATION & BILINGUAL INTERPRETATION
CITT CONFIRMS THE NARROWER SHARED MEANING MAY DETERMINE THE RESULT
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Tariff classification is the process of identifying and categorizing goods imported into Canada under the applicable tariff provisions. It determines the applicable rate of customs duty and, in turn, how much duty an importer must pay when the goods enter Canada.
EXCISE ACT 2001 RECORDKEEPING REQUIREMENTS
MORE THAN MEETS THE EYE — CRA’S STRINGENT REQUIREMENTS
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The Excise Act, 2001 (“EA 2001”) governs the taxation and regulatory framework applicable to specified goods, including tobacco, wine, spirits, and, more recently, vaping products. Recordkeeping requirements under the EA 2001 are among the most stringent in Canadian tax legislation. In our experience, CRA is increasingly relying on imperfect or incomplete records as a basis for assessing additional duty, interest, and, in some cases, significant penalties.
In this Indirect Tax Report, we review the statutory requirements for books and records under the EA 2001 and highlight key compliance risks and practical traps for industry participants.
CERTIFYING ORIGIN - NOT JUST A "FORMALITY"
RULES OF ORIGIN NEED TO BE CONSIDERED WHEN PREPARING CERTIFICATIONS
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Canada has a significant network of free-trade agreements which direct sellers can make good use of covering numerous countries including the United States and Mexico ("CUSMA"/"USMCA"), the countries of the European Union ("CETA"), and twelve trans-pacific countries (plus the UK) (the "CPTPP").
However, before claiming treaty benefits, importers are required to have either a Certificate of Origin or an equivalent certification confirming the goods qualify as originating under the relevant free trade agreement.
WHEN IS CANNABIS, CANNABIS?
CRA TAXING TRIM LIKE CANNABIS
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Cannabis cultivators and producers will generally be aware of the two-tier flat tax that applies to the production of cannabis products, such as pre-rolls. That is, a higher tax rate of $0.25 per gram applies to flowering material, while a lower tax rate of $0.075 per gram applies to non-flowering material – putatively on the basis that it is far less potent in terms of cannabinoid content (THC and CBD).
NEW US FOREIGN IMPORTER OF RECORD RULES
NEW RULES WILL AFFECT CANADIAN BUSINESSES IMPORTING INTO THE US
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Both Canada and the US have a concept that allows a foreign entity to act as the "importer of record" of goods into the other country – traditionally referred to in Canada as a “non-resident importer” or NRI. The US term for this is a “foreign importers of record” or FIOR.
CANADA-CHINA TRADE RESET
SIX MONTHS LATER: WHAT HAS REALLY CHANGED?
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Following escalating trade tensions since 2024, Prime Minister Carney’s January 2026 visit to China produced a notable attempted “reset” in Canada-China trade relations. The tariff measures agreed to as part of that reset took effect on March 1, 2026.
SIMPLIFIED CANADIAN TRANSFER PRICING RULES
NEW RULES ADDRESS OLD PROBLEM: SMALLER BUSINESS DOCUMENTATION STANDARDS
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Canada’s transfer pricing rules were first introduced in 1997 and essentially require Canadian businesses transacting with related foreign parties – for example, buying, selling or licensing goods, services and intangibles within a multinational corporate group – to maintain written documentation explaining how their prices comply with internationally accepted arm’s length principles. The Canada Revenue Agency (“CRA”) has historically adopted the OECD Transfer Pricing Guidelines for that purpose.
NEW SURTAXES ALSO AFFECT STEEL & ALUMINUM
CARNEY GOVERNMENT’S NEW SURTAXES AMEND PRIOR STEEL & ALUMINUM ORDER!
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As part of the Canadian Federal Government’s new round of retaliatory surtaxes that came into effect on September 8, 2026, consequential amendments were made to the United States Surtax Order (Steel and Aluminum 2025) (the “Steel/Aluminum Surtax”).
HST CANNOT BE SET OFF AGAINST DEBTS OWNING
BCAA CONFIRMS HST CANNOT BE SET OFF AGAINST SUPPLIER’S DEBTS
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Many commercial agreements include broad rights of set-off, which sophisticated businesses use to net out liabilities between parties. While that seems straightforward in commercial terms, businesses run into problems when applying this practice to GST/HST. Under the Excise Tax Act, HST collected – or collectible – by a supplier is NOT the supplier’s money to begin with. Rather, it is money held in trust for the Crown.
GST/HST REGISTRATION FOR CONDO CORPS
WHEN TO REGISTER, TAXABLE STATUS OF SUPPLIES, CAN BE TRICKY QUESTIONS
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Property managers and board directors of condominium corporations (“Condo Corps”) often assume that registration for GST/HST under the Excise Tax Act (“ETA”) is not required because supplies made to residential condominium units are exempt of GST/HST.
PROVISIONAL DUTIES ON CHINESE PLYWOOD
CBSA ISSUES PRELIMINARY DETERMINATION ON PLYWOOD FROM CHINA
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On August 24, 2026, the Canada Border Services Agency (“CBSA”) released a notice of its preliminary determination of dumping and subsidizing in respect of decorative and other non-structural plywood originating in or exported from the People’s Republic of China (the “Subject Goods”).
PRELIMINARY DETERMINATION: STEEL RACKS
CBSA IMPOSES PROVISIONAL DUTIES ON STEEL RACKS FROM CHINA
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On September 2, 2026, the Canada Border Services Agency (“CBSA”) released a notice of its preliminary determination of dumping and subsidizing in respect of steel racks originating in or exported from the People’s Republic of China (the “Subject Goods”). Provisional duties are now imposed on imports of the Subject Goods released from the CBSA on or after September 2, 2026.
AMENDMENTS TO INDIRECT TAX RULES INCOMING
BILL C-31 NOW BEFORE FINANCE STANDING COMMITTEE & NEAR ENACTMENT
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As a follow up to our previous report on Canada’s Budget 2025 (the “Budget”), certain indirect tax measures proposed in the Budget are now being considered by Parliament, as the Budget 2025 Implementation Act, No. 2 (“Bill C-31”) received its second reading on June 3, 2026, and is currently at the House of Commons Standing Committee on Finance for consideration.
CRA REFUNDS: WHERE DID MY MONEY GO?
CRA EXPLAINS WHY TAX CREDITS ARE AUTOMATICALLY TRANSFERRED
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Many taxpayers expect that once the Canada Revenue Agency (“CRA”) determines that they are entitled to a GST/HST or income tax refund, that the refund will simply be paid. Unfortunately, that is often not the case (!) with the CRA explaining its “set-off” rights in a recent industry roundtable, confirming that where refunds are due, those amounts can often be automatically transferred to satisfy outstanding balances in other CRA tax accounts.
CRA AUDIT SETTLEMENTS: IS THAT A REAL THING?
CRA EXPLAINS HOW AUDITS CAN BE SETTLED & WHO REALLY MAKES THE DECISION
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Many taxpayers assume that once a CRA auditor starts an Audit, the Audit needs to be completed, with no opportunity to reach an early settlement on contentious issues. To the contrary, CRA has recently confirmed that many Audits can, in fact, be settled – albeit only after being subject to additional internal review before becoming final.
BC HEADING BACK TOWARDS HARMONIZATION?
EXPANSION OF BC’S PROVINCIAL SALES TAX NARROWS THE GAP WITH THE HST
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As we previously blogged on here, British Columbia (“BC”) recently announced a further expansion of its Provincial Sales Tax (“PST”) base to certain goods and services including new professional services like accounting, architectural, and real estate services.
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