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Border Hassles That Put the Canadian Market Out of Reach

The following paper will discuss the regulatory and logistical hurdles that a U.S. business must be aware of when shipping across the U.S./Canadian border. Each of these challenges must be understood and addressed as part of the cross-border experience.

March 01, 2013

This announcement from Canada Revenue Agency is typical of the policy changes that are regularly announced by the U.S. and Canadia governments – changes that have a direct impact on cross-border commerce. If your business exports regularly to Ontario or British Columbia, would you be in a position to know that the tax structure had changed? And here are some other questions to consider if you are a U.S. business that ships to Canada:

  • Do you understand how any changes to tax policy might affect your liability?

  • How will a change in the tax code affect the amount you charge your customers?

  • How do you ensure that you are in compliance? Are you documenting the transactions accurately?

While the United States and Canada maintain the closest and most extensive trade relationship of any two countries – more than $526 billion in goods and services crossed between the two countries during 2010 (based on 2010 U.S. Census Bureau data) – the fact remains that doing business in Canada is doing business with a foreign country. While both the U.S. and Canadian governments have taken significant steps to facilitate the flow of goods, there are regulatory protocols that must be complied with for a U.S. business to successfully ship goods to Canada.

Many U.S. businesses underestimate the complexity of navigating the U.S./Canadian customs clearance process and do not thoroughly investigate their logistics carrier’s Canadian capabilities. Few logistics carriers have the cross-border experience and track record needed to successfully navigate the border clearance process. And even fewer have the broad distribution capacity necessary to offer service options and flexibility to help businesses better serve their Canadian customers. U.S. businesses have learned the hard way when their shipments have been denied entry or hit with unexpected duties and penalties.



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