Guide to tariff classification for Canadian imports: The origins of tariff classification

Why tariff classification is important

To import goods into Canada, you must have a 10-digit tariff classification number for your goods.

The correct classification number means:

the appropriate amount of duties and taxes get paid
import statistics used for domestic purposes get collected accurately

The classification number is entered in the commercial accounting Form B3-3, Canada Customs Coding Form (field 27).

Benefits of tariff classification

Offers measures that relieve duties and foster economic development in Canada
Helps businesses adjust to competitive pressures
Reduces duties for Canada's trading partners and gives our businesses better access to their markets
Protects the health and safety of Canadians
Gives Canada the right to impose emergency surtaxes on imports that harm our producers
Lets Canada assert our rights under trade agreements with other countries

Consequences of incorrectly classified goods

Penalties and interest for non-compliance
Potential loss of import privileges
Delays at Canadian border ports of entry

History of the Customs Tariff

The Customs Tariff remains one of the key instruments used by the government to achieve its economic and trade policy objectives. Sections 10, 11 and 20 of the Customs Tariff are especially relevant to tariff classification.

In January 1988, Canada implemented the tariff and import statistical nomenclature (or legal text), which forms part of the Customs Tariff.

Canada did this to fulfill its obligations as a “contracting party” to the World Customs Organization’s (WCO’s) International Convention on the Harmonized Commodity Description and Coding System (the convention).

The WCO is an intergovernmental body that Canada has been a member of since 1971.

The Harmonized Commodity Description and Coding System

The WCO developed the Harmonized Commodity Description and Coding System (or HS) to create consistency in the way goods are classified internationally.

All parties to the convention, including Canada, use the HS as their standard tariff classification system.

HS codes are made up of:

headings
subheadings
section, chapter and subheading notes
General Rules for the Interpretation of the HS

Combined, these provide the standardized approach for the classification of goods internationally.

More than 200 countries and economies use the system:

as a basis for their customs tariffs
for the collection of international trade statistics

Over 98% of the goods in international trade are classified according to the HS.

In adopting the HS for economic interests and import statistical purposes, it was necessary to:

expand the numerical structure of the international system
- by subdividing the subheadings to create tariff items and statistical suffixes
develop Canadian rules, supplementary notes and statistical notes

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