Exporting Cars from the USA to Canada

Market Overview 

According to market research firm IBISWorld, the market for used cars has fully recovered since the economic downturn. Consumers, still wary of the economic climate, increasingly opted to buy used vehicles over new ones, helping to boost sales. These trends are expected to continue in the five years to 2020, bolstering demand. Currently, the used car market is valued at approximately $7 billion with a 1.8% growth rate predicted in the next five years. (1)

Despite this upward swing, used car prices, however, are expected to decline with a glut of used cars on the market. (2)

According to Best Seling Care, Fiat Chrysler Automobiles (FCA) keeps the lead of the groups ranking with 16.1% share above Ford Motor at 15.3% and General Motors at 12.8% but Hyundai-Kia (11.3%) is back above Toyota (10.3%) and now trails the Japanese group year-to-date but just 9 units. Honda, Nissan (both at +10%), Subaru (+13%), Daimler (+14%) and Volvo (+54%) all deliver double-digit gains. In the Brands ranking, the podium is unchanged with Ford (-6%) above Toyota (-1%) and Honda (+8%) while Hyundai (+2%) overtakes Chevrolet (-5%) and Ram (+17%), Jeep (+21%), Porsche (+28%), Lexus (+30%), Mercedes (+34%) and Acura (+39%) deliver some of the most impressive gains. (3)

Pros

• Proximity to the United States and reduced duties and tariffs due to NAFTA
• Popularity of used car models available in the United States

Cons

•  Used car prices expected to decline with a glut of used cars on the market.

Documentation Requirements

• Ensure you have the required documents for both US Customs and Border Protection and Canada Border Services Agency. The following documents must accompany the vehicle and be presented to U.S. Customs at the time of export:

• Original Title

• Manufacturer’s Statement of Origin or Certificate of Origin (front and back)

• Bill of Sale

• Recall clearance letter (U.S. only)

• NAFTA, if applicable (commercial U.S. imports only)

• Copies of the Export Certificate and Invoices (in English or French), if the export location is other than the U.S. (4)

File AES before giving 72-hour export notice

The United States Census Bureau has added an export filing requirement on the U.S. Customs and Border Protection Automated Export System (AES). The AES must be filed prior to the 72-hour notice. An EIN or IRS or Duns Number from the seller will be required along with the worksheet attached to file the AES. AES filing for self-propelled equipment is mandatory.

Submit required documents to CBP 72 hours prior to export

For vehicles being imported into Canada from the U.S., the required documentation must be submitted to U.S. Customs and Border Protection (CBP) at least 72 hours prior to export.

At this time, you will need to provide:

• S. Customs vehicle export worksheet

• Copy of Bill of Sale

• Copy of VehicleTitle (front and back)

• Manufacturer’s Statement of Origin(MSO) or certified copy of the same from the Department of Motor Vehicles (DMV).

• If you are bringing in a salvage vehicle, you must supply a copy of the Salvage Title. If theTitle is not in your name, then the seller must sign as the seller and the buyer must appear as the buyer on the Title.

Other Requirements 

Except vehicles manufactured for sale in the United States, Transport Canada prohibit the importation of all foreign vehicles that are less than 15 years old.

Transport Canada compile a list of US vehicles assessed to be admissible into Canada under the RIV program based on information provided by vehicle manufacturers available here.

While vehicles over the 15-year threshold may be permitted entry into Canada, there are regulations governing registering your vehicle that should be considered. Registration requirements vary from province to province so it is also important that you be aware of specific requirements where you will be registering and using your car.

Other Import Procedures

Additional import procedures in Canada.

Import Duties and Taxes

Overview

Import duty and taxes are due when importing goods into Canada. The duty valuation method is FOB (Free on Board).

In addition to duty, imports may be subject to other taxes such as GST (General Sales Tax), PST (Provincial Sales Tax), or a combination of both known as HST (Harmonized Sales Tax) depending on the type of importer and province.  Sales tax is calculated based on the sum of the value of the goods, the duty, and the excise duty (if applicable).

Duty Rates

According to the Canadian Border Services Agency, if your vehicle is eligible for importation into Canada according to both CBSA and Transport Canada requirements, you will have to pay import assessments that may include duty, excise tax and the goods and services tax (GST). Provincial or territorial sales tax may apply when you license your vehicle.

If you import a vehicle into Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario or British Columbia you must pay the GST on your importation, as well as the provincial part of the harmonized sales tax (HST) when you license your vehicle.

Generally, you do not have to pay duty on a vehicle imported for personal use that was manufactured in the United States, or Canada, or vehicles from Mexico that are of a model year 10 years of age or older (if admissible under Transport Canada’s Motor Vehicle Safety Act).

According to CBSA:

The CBSA will assess duty on a vehicle manufactured in a country other than the United States and Mexico. Duty and taxes are assessed on your vehicle’s value for duty. This is a value in Canadian funds based on the price you have paid or will pay for the vehicle before any consideration for a trade-in.

The price paid or payable for a vehicle includes not only the vendor’s invoice price but also all other amounts such as warranty payments or foreign sales taxes that are collected by the vendor.  Any credit you may receive for a trade-in does not reduce the value that must be declared when the vehicle is imported into Canada. (5)

CBSA provides the following breakdown 

If your vehicle has air conditioning, you will have to pay an excise tax of CAN$100. You will have to pay additional excise taxes (Green Levy) only if your vehicle has a weighted average fuel consumption rating of 13 or more liters per 100 kilometers and is put into service after March 19, 2007. The Green Levy will apply to automobiles (including station wagons, vans, and sports utility vehicles) designed primarily for the use as passenger vehicles, but not including pickup trucks, vans equipped to accommodate 10 or more passengers, ambulances, and hearses.

The following example shows a breakdown of the customs duty and taxes assessed on a United States-manufactured automobile sold for export from the United States to a purchaser in Canada and imported after March 19, 2007. (6)

Example 2010 model year automobile
Purchase price (includes invoice price and state taxes)		US$50,000
Value for duty (price converted to Canadian currency at current rate of exchange: $50,000.00 x 1.05*)		CAN$52,500
Duty at 0%	0
Excise tax on air conditioner	$100
Excise tax on Green Levy	$1,000 $1,100	$1,100
Value for tax (value + duty + excise tax)		$53,600
GST ($53,600 × 5%)		$2,680
Total cost		$56,280
Total duties and taxes paid to CBSA		$3,780

 Sales Tax

Commercial importers are only subject to GST.  Private importers are subject to GST, PST or HST.  Sales tax rates vary by province.  The table below outlines sales tax estimates in the different provinces:

Province	Code	Sales tax type	Provincial rate	Combined effective rate
Alberta	AB	GST	0%	5%
British Columbia	BC	GST + PST	7%	12%
Manitoba	MB	GST + PST	8%	13%
New Brunswick	NB	HST	8%	13%
Newfoundland and Labrador	NL	HST	8%	13%
Northwest Territories	NT	GST	0%	5%
Nova Scotia	NS	HST	10%	15%
Nunavut	NU	GST	0%	5%
Ontario	ON	HST	8%	13%
Prince Edward Island	PE	GST + PST	9%	14%
Quebec	QC	GST + QST	9.975%	14.975%
Saskatchewan	SK	GST + PST	5%	10%
Yukon	YT	GST	0%	5%

Source: dutycalculator.com

For more information within Canada, call the Border Information Services at1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064 (long distance charges will apply)

You may obtain further information by consulting the publications (Guides and Brochures) available on the CBSA Website.

For more recent policy and technical information about excise tax on vehicles and their air conditioners, you may call the Canada Revenue Agency at 1-866-330-3304.

For the most recent Transport Canada information about importing vehicles into Canada, contact the following offices:

Vehicles manufactured for sale in the United States

Registrar of Imported Vehicles (RIV)
405 The West Mall
Toronto ON M9C 5K7
Telephone: 1-888-848-8240
(toll-free in Canada and the United States)
416-626-6812 (all other countries)
Fax: 1-888-346-8235
Website: www.riv.ca

All other vehicles

Road Safety and Motor Vehicle Regulation Directorate
Transport Canada
Telephone: 1-800-333-0371
(toll-free in Canada and the United States)
613-998-8616 (all other countries)
Fax: 613-998-4831
Website: www.tc.gc.ca

See Market Guides For Additional Countries.
See our Vehicle Auctions, Car Auctions and Education Centre.

References

(1) http://www.ibisworld.ca/industry/default.aspx?indid=1363
(2) http://www.thestar.com/autos/2015/01/03/the_road_ahead_the_car_market_in_2015.html
(3) http://bestsellingcarsblog.com/category/canada/
(4) http://blog.pcb.ca/2013/08/9-steps-to-importing-a-vehicle-into-canada-from-the-u-s/5134
(5) http://www.cbsa-asfc.gc.ca/publications/pub/bsf5048-eng.html
(6) http://www.cbsa-asfc.gc.ca/publications/pub/bsf5048-eng.html