Canada- Exporter Guide 2012

An Expert's View about Business Environment in Canada

Posted on: 11 Jan 2013

This report is a practical guide for U.S. food exporters interested in the Canadian market, highlighting consumer and product trends, market sector reports

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/21/2012 GAIN Report Number: CA 12049 Canada Exporter Guide Exporting to Canada: A Practical Guide Approved By: Scott Reynolds Prepared By: Maria Arbulu Report Highlights: Canada is among the top destinations for U.S. agricultural exports, in Fiscal Year 2012 U.S. agricultural exports to Canada reached $20 billion in agriculture and fish products. This reflects an increase of 7.5% from the previous year. Consumer-oriented agricultural products accounted for 77 % of total U.S. food and agricultural product sales to Canada in FY2012 with red meats, fresh vegetables, fresh fruits, snack foods, and processed fruits and vegetables, coffee extracts and preparations as the category leaders. This report is a practical guide for U.S. food exporters interested in the Canadian market, highlighting consumer and product trends, market sector reports, and best prospects for U.S. consumer-oriented agricultural products in the Canadian market. Post: Ottawa Canada: Exporter Guide December 2012 Table of Contents SECTION I. MARKET OVERVIEW ........................................................................................ 4 A) General ..................................................................................................................................................................4 B) Consumer Trends in Retail Food ...........................................................................................................................5 SECTION II. MARKET SECTOR STRUCTURE AND TRENDS ........................................ 8 Market Sector Reports ..............................................................................................................................................10 SECTION III. BEST HIGH-VALUE PRODUCT PROSPECTS ......................................... 13 What’s Hot? .............................................................................................................................................................13 SECTION IV. ROAD MAP FOR MARKET ENTRY ............................................................ 15 Entry Strategy ..........................................................................................................................................................15 SECTION V. FREQUENTLY ASKED QUESTIONS AND THEIR ANSWERS ................. 17 SECTION VI. CONTACTS ...................................................................................................... 19 Summary of Useful Websites ...................................................................................................................................19 SECTION VII. EXPORTER SERVICES, BUSINESS PROCEDURES, AND FOOD REGULATIONS… ..................................................................................................................... 20 A) Export Services for U.S. Food and Agricultural Exporters ..................................................................................20 B) Business Customs Import Procedures..................................................................................................................22 Sample Products ...................................................................................................................................................24 C) Food Regulations ................................................................................................................................................26 Labeling Requirements ........................................................................................................................................26 The Guide to Food Labeling and Advertising in Canada ......................................................................................28 Food Labeling Information Service ......................................................................................................................28 Labeling of Shipping Containers ..........................................................................................................................31 Nutrition Labeling ................................................................................................................................................31 Allergen Labeling Regulations on Pre-packaged Foods .......................................................................................33 Tariffs and Tariff Rate Quotas (TRQs) .................................................................................................................34 Packaging and Container Regulations ..................................................................................................................35 Food Additive Regulations ...................................................................................................................................36 Pesticides and Other Contaminants ......................................................................................................................37 D) Other Regulations and Requirements Inspection and Registration Fees ..............................................................37 E) Other Specific Standards .....................................................................................................................................39 Food Fortification.................................................................................................................................................39 Marketing Authorizations .....................................................................................................................................40 Test Marketing Authorization (TMA): Processed Food Products ........................................................................41 Copyright and/or Trademark Laws .......................................................................................................................42 The Use of Health Claims ....................................................................................................................................43 Labeling Claims on Meat, Poultry and Fish Products ...........................................................................................44 Fish and Seafood ..................................................................................................................................................45 Novel Foods (Foods Containing Genetically Modified Crops) ............................................................................45 Halal Foods ..........................................................................................................................................................46 Kosher Foods .......................................................................................................................................................47 Baby Foods ..........................................................................................................................................................47 Organic Foods ......................................................................................................................................................47 Pet Food ...............................................................................................................................................................48 Livestock Feeds....................................................................................................................................................49 Wine, Beer and Other Alcoholic Beverages .........................................................................................................50 Vitamins, Minerals, Probiotics, and Supplements ................................................................................................51 F) Recent Regulatory Initiatives and Proposed Changes Under Review ..................................................................52 Other Label Changes – Sodium Diacetate ............................................................................................................52 Meat Packaging Registration ................................................................................................................................52 New Regulations Under Development to Address Regulatory Gaps in Imported Food Sector .............................53 Appendix I. Statistics ................................................................................................................. 55 Glossary of Acronyms ................................................................................................................. 58 3 | P a g e Canada: Exporter Guide December 2012 SECTION I. MARKET OVERVIEW A) General According to the trade statistics published by the U.S. Census Bureau, Canada continues to rank as the top destination for consumer-oriented (high value) U.S. agricultural exports. In fiscal year 2012 (FY 2012), U.S. agricultural exports to Canada reached $ 20 billion. This reflects an increase of 7.5% from the previous 1 year statistics. Agricultural exports from the United States to Canada accounted for 14% of global U.S. food and agricultural product exports of $ 136 billion. Consumer-oriented agricultural products accounted for 77 percent by value of total U.S. food and agricultural export sales to Canada in FY2012. The leading products were red meats, fresh vegetables, fresh fruits, snack foods, and processed fruits and vegetables, coffee extracts and preparations, breakfast cereals, and fruit and vegetable juice products. Products from the United States accounted for 59% percent of total Canadian agricultural and food imports in 2011. During FY 2012, the majority of consumer-oriented agricultural categories such as fresh fruits, red meats, snack foods, fresh vegetables, breakfast cereals, pet foods, wine and beer, tree nuts, posted record annual sales to Canada. The top five categories were red meat ($2.1 billion), fresh fruits ($1.7 billion), snack foods ($1.7 billion), fresh vegetables ($1.6 billion), and processed fruits and vegetables ($1.3 billion). Canada is also an important market for U.S. fish and forestry exports. Canada is the second largest export market for U.S. fishery products, and exports reached $ 893 million in FY2012. Despite being a major producer and world exporter of forest products, Canadian imports of U.S. forest products reached $ 2.3 billion in FY 2012. Combined U.S. agricultural, fishery, and forestry product exports to Canada reached $ 23.26 billion. The United States and Canada have the world's largest bilateral trading relationship. During CY 2011, two-way merchandise trade of all goods was valued at $ 681 billion. The number of trucks that cross the Canada – U.S. border daily exceeds 20,000 per day. That is an average of almost one truck every-other minute, 24 hours a day. Total bilateral agricultural trade between the United States and Canada reached $ 40 billion in FY2012, or approximately $ 110 million per day. Under the tariff elimination provisions of the North American Free Trade Agreement (NAFTA), the majority of U.S. agricultural products have entered Canada duty-free since January 1, 1998. On December 4, 1998 the United States and Canada signed a Record of Understanding, an agreement to further open Canadian markets to U.S. farm and ranch products. Since that time, U.S. agricultural exports have tripled in value 2 . Trade with Canada is facilitated by proximity, common culture, language, similar lifestyle pursuits, and the ease of travel among citizens for business and pleasure. Many U.S. products have gained an increased competitive edge over goods from other countries as the result of the FTA/NAFTA. Also U.S. manufacturers generally have a competitive advantage over Canadian manufacturers in the scale of production. Canada’s grocery product and food service trades have been quick to seize opportunities under FTA/NAFTA, which permit them to expand their geographical sourcing area to include the United States. Declining import duties under the trade agreements and an easing of Canadian packaging requirements for processed horticultural products for the food service market have 1 US Fiscal Year 2012 (FY12) began on October 1, 2011 and ended September 30, 2012. 2 1998 U.S. agricultural exports to Canada were valued at $ 6.8 billion. 4 | P a g e Canada: Exporter Guide December 2012 resulted in significant gains in the Canadian market for U.S. consumer-ready foods and food service foods. However, as similar as the United States and Canada are, there are differences that exporters need to recognize. Understanding the nuances of a marketplace is critical to a successful launch of a product in any foreign market. Canadian Market Overview Summary Advantages Challenges A sophisticated selection of product is already available Proximity in the Canadian market W gual (English and French) labeling required for ide exposure to U.S Bilin. culture retail products Similar consumption and shopping Differences in standard package sizes patterns High U.S. brand awareness Differences in nutrition labeling Frequent business and personal trips to United St Conversion of measurements to metric system required ates Ease of entry for business travel Standard Canadian English required Duty free tariff treatment for most Tariff rate quotas for certain products products under NAFTA High U.S. quality and safety perceptions Differences in chemical residue tolerances U.S. origin top choice among imported Higher landed costs, especially for small shipments foods B) Consumer Trends in Retail Food Canada’s population as of July 1, 2012 was estimated at 35 million. The annual growth rate is relatively slow at about 1 percent. The popularity of U.S. food products is very high and Canadian consumers are keenly aware of new product offerings in the United States. The close integration of the North American food market under NAFTA means that U.S. food and agricultural products are in high demand by Canadian retailers. There are some important trends in the Canadian retail food market that can help U.S. food exporters better understand the market. The following highlights are taken from an Agriculture and Agri-Food Canada review with updates and/or additional information incorporated by the Foreign Agricultural Service in Canada. For more information on food marketing and trends in Canada, see Section III on Market Sector Structure. Overview Population growth is 1.08 % a year. Graying population - Canadians 45 years of age and older now account for 40% of the population and by 2016 it will be 45%. 5 | P a g e Canada: Exporter Guide December 2012 Seniors, (aged 65 and over) represent 14.4% or five million of the total population. By 2033, this number is expected to double to 10 million. Family structure, average household size decreased from 3.7 people in 1970 to fewer than 2.5 people in 2011. The number of children in the average Canadian household dropped from 2.7 in 1961 to 1.9 in 2011. Canada per-capita immigration rate is one of the highest in the world; more than 50% of Canada’s population growth rate is attributed to the arrival of new immigrants. Graying Population Seniors make up the fastest-growing age group. Seniors are well off financially, well educated, and willing to spend. Have time to shop for what they want. Increasingly interested in health and product quality. Increasing demand for smaller portions, single packages, easy to open and easy to read labels. Cultural Diversity Canadian ethnic diversity is different from the United States with less Hispanic influence and more Asian influence. Ethnic diversity – Asian immigrants make up more than half of all immigrants. Chinese, Filipinos and South Asians3 represent the largest immigrant groups in Canada. The cultural diversity is an increasingly important force in the marketplace, particularly in urban centers, creating new demands in the food industry. Currently there are six million people in Canada who belong to an ethnic minority. This number is expected to increase to 14 million in the next twenty years. Ethnic foods like pad thai, masala and shwarma have gained in popularity. The growing halal sector is gaining market share among selected grocery chains. Economic/Demographic Trends Real personal disposable income growth has experienced a slowdown during the past ten years but price inflation has been low. Dual-income families are the norm but single-parent families are more prominent than a decade ago. There are now more one-person households than couples with children. Increasing number of women in the workforce. Slow economic recovery in 2010-12. Canadian Food Expenditures Food and beverage expenditures have decreased to 14 percent of the income of the average Canadian household. Increase in consumption of fresh and frozen fruits and vegetables, alcoholic beverages, soft drinks, fish, rice, breakfast foods, cereals, grains, pulses and nuts. 3 South Asians comprise of people from India, Pakistan, Bangladesh, Sri Lanka and others. 6 | P a g e Canada: Exporter Guide December 2012 From 2008 to 2012, grocery expenditures have increased significantly for baked goods and ingredients, hot and cold cereals, coffee, candy and chewing gum, condiments, dressings, dried foods, juices, frozen foods, fresh produce, nuts, relishes and spaghetti/lasagna sauces, spreads, jams, jellies, preserves, syrups and spreads, dry pasta, and snack foods. Market Place Behavior Consumers still seek fresh, tasty, and high quality foods. Growing segment of Canadians have become price conscious shoppers. An increasing number of consumers are concerned about the safety and nutritional value of their foods they eat. Foods that address specific dietary needs and health issues, as obesity, digestive problems or diabetes provide special opportunities. Demand for organic foods continues to increase considerably as it expected to grow 20% in the next 15 years. More consumers own microwaves than own barbeques. Consumers seek convenient meal solutions and thus an increased demand for home delivery, "ingredient solutions," home meal replacements, hand-held foods and microwavable products. Growing demand for snack foods. The majority of fish and seafood sales are in foodservice. Kosher and halal food sales are rising rapidly. Increase in private label products in which consumers have confidence. Food Service Trends 81,577 foodservice establishments in Canada. Consumer spending on food purchased outside the home (restaurants) has decreased slightly, to 23.1% percent of food expenditures, due to economic conditions. Fast food restaurants are providing healthy meal choices with greater nutritional content. Increased demand for ethnic foods. Increased visits to quick service restaurants. Retail Store Trends 23,957 grocery retail establishments in Canada. Growth in discount grocery stores and mass merchandisers. Grocery stores are growing in size with most new superstores of over 97,000 sq. ft. More prepared foods available to store customers. Big supermarkets are in battle for market share against the big box stores and the mass merchandisers. Expanding ethnic food aisles and sections. Major chains increasingly have organic sections. Increase in Food Safety and Label Consciousness Growing awareness among shoppers about the safety of their food supply in Canada. Canadians are becoming more conscious of reading the Nutrition Facts Table on food products. 7 | P a g e Canada: Exporter Guide December 2012 There is increased concern for the levels of trans fats, sodium, fiber, and sugar in packaged foods and an increased awareness of the issues surrounding allergens, food fortification, and health claims. There are different regulations than in the United States for listing ingredients, allergens, and the content and presentation of the nutrition label. SECTION II. MARKET SECTOR STRUCTURE AND TRENDS In addition to the market opportunities created by reduced tariffs, changing lifestyles in Canada are helping increase the demand for U.S. agricultural products. U.S. food exporters face a knowledgeable and more demanding Canadian consumer. To be successful in the Canadian marketplace, U.S. exporters should study and understand Canadian food trends. The following highlights trends that are driving grocery purchases: Value Private Label: Traditionally, private label has been seen as lower quality and generally less desirable than national brands but this has changed. In 2011, private label represented C$ 11.3 billion in sales and is forecasted to grow in 2012. Economical Meal Solutions: A resurgence of traditional products that offer value such as dehydrated soups. Promotional Priced Products: Higher retail food prices have caused consumers to seek out promotions and encouraged more Canadians to shop at discount retailers. This trend is expected to grow through 2013. However, Canadians are discerning shoppers and will not sacrifice quality for price. Quality/Freshness Fresh Foods: Consumers are switching to fresh foods because they equate fresh with better value that offers taste, health and nutrition. Canadian Grocer reports that Target stores in Canada will offer a limited selection of fresh products in a reasonable price range for consumers. Frozen Foods: Retail sales of frozen foods grew by 3% and are predicted to increase as new technology helps to keep the flavors fresh. Microwavable frozen meals that offer steam packaging have become popular. Convenience Ready to Heat and Eat Foods: Women continue to do the majority of food purchasing, preparation and clean up. As a result, the demand for foods that are easy and quick to prepare yet tasty, fresh and nutritiously sound continues to grow. One Dish Meals: Growth in quick one-dish meal kits such as stir-fries and stew are expected to grow. Custom Quick Food: Consumers do not spend an extensive amount of time preparing meals, but it still is important to feel that they have contributed something to the preparation. Therefore, there will be an opportunity for ready meals or kits, which allow the people preparing to add their own personal touch. 8 | P a g e Canada: Exporter Guide December 2012 Smaller Food Portions and Packages: Individual portion sizes are in demand as there are more single-person households. Individual portion sizes also cater to the trend of "eating-where-you- are." Flexible and Portable Packaging: Eating in vehicles or “Dashboard Dining,” as well as eating lunches at the work desk is more common. Snacks and Mini Meals: Canadian eating patterns are changing from eating three main meals a day to eating several smaller meals throughout the day. Convenient, nutritious snacks or mini meals will increase in demand (i.e. breakfast bars, wraps, sports drinks). Innovation: Convenience foods will continue to be popular but the key to success will be innovation. Physical and Emotional Energy: Stressed out consumers that are seeking energy, power and performance from food are turning to sports drinks, energy bars and snacks. Health and Wellness Correcting Condition: Food and food ingredients continue to increase in popularity as a method for self-medication and disease prevention. As a result, the demand for functional and nutraceuticals foods will continue to increase and new products will be developed. Healthy Foods for Kids: Approximately 26 percent of Canadian children ages 2-17 years old are currently obese. Food Safety: Consumers are increasingly interested in food products that provide reassurances about food safety. Gluten-Free: The demand for these products will continue to grow as they have doubled since 2005. Low Sodium: Canadian consumers are becoming conscious about the level of sodium in prepackaged processed foods and in restaurant meal foods. Health Canada is currently reviewing new recommended target levels of sodium intake. Low Sugar: Canada’s Food Guide recommends moderate consumption of sugar, glucose, fructose, and various kinds of syrups as they are the major contributors to weight gain. Low Calorie: Interest in weight loss products and lower calorie foods continues to be high among Canadians. Organics: The value of organic food products is estimated at C$ 2 billion and is predicted to grow steadily. Trans Fats and Saturated Fats: Canadians are continually concerned about fat intake and health concerns associated with trans and saturated fats. As a result, low-fat cereals, dairy products and frozen meals are rising. Pleasure/Ethnic Foods Economic growth and rising disposable income has made Canadians more confident about spending for products and services that make their lives easier or provide pleasure. Indulgence or Comfort Foods: Although Canadians are concerned about the nutritional value of food, they still are reaching out for tasty snacks that are high in fat, sugar and salt. The demand for these foods continues to be high for they are often considered a reward for healthy eating or surviving the stresses of everyday life. Gourmet products of Meal Excitement: New, unique, high quality and expensive products will be small indulgences for consumers who are seeking meal entertainment. Regional Cuisine: Consumers are becoming more interested in seasonal, regional and high flavor foods. 9 | P a g e Canada: Exporter Guide December 2012 Ethnic Foods: Immigration to Canada and the number of visible minority groups have increased dramatically. Consumers are flocking to healthful and flavorful ethnic cuisines such as Asian and Mediterranean foods where the emphasis is on ingredients such as vegetables, grains and fish. In 2010, ethnic food markets generated C$ 65 billion in food sales and are projected to increase 15 -20 percent annually. Ethical Buying A small but growing number of Canadians are making buying choices based on where and how their foods are grown. This trend goes beyond taste and health concerns and into the realm of green politics and anti-globalization. It includes the concepts of “fair trade”, “sustainable practices”, and “food miles.” Buy Local Products: Consumers are concerned about their local economy and where there foods come from. Although, U.S. foods are not viewed as local this may present opportunities for U.S. food companies. Canadians view U.S. products as safer and of better quality than imports from other countries. Recycled and Biodegradable Food Packaging: Many Canadian cities have instituted recycling programs for their citizens and businesses. Each sector is looking to maintain a ‘green image.’ Market Sector Reports Listed below are the food sector and marketing reports published by the Office of Agricultural Affairs in Ottawa and Toronto, Canada. For a complete listing of other Post reports and of FAS’ worldwide agricultural reporting, visit the FAS GAIN web page and be sure to insert the report number at: http://gain.fas.usda.gov/Lists/Advanced%20Search/AllItems.aspx AGR REPORT# Title of Report Date CA 12041 Fresh Deciduous Fruit Annual 11/02/12 CA 12042 The Grain and Feed Annual 10/30/12 CA 12039 Dairy Annual 10/15/12 CA 12037 Potatoes Annual 10/01/12 CA 12036 Livestock Annual 09/11/12 CA 12034 Poultry and Products Annual 08/16/12 CA 12030 FAIRS Country Report 07/27/12 CA 12039 Biotechnology Annual 07/20/12 CA 12027 Biofuels Annual 2012- update 07/20/12 CA 12024 Biofuels Annual 2012 06/29/12 CA 12011 Retail Food Sector for Canada 03/08/12 CA 12006 Northern Trends – Winter 2012 02/03/12 CA 11048 Northern Trends – Fall 2011 09/15/11 CA 11033 Northern Trends – Spring 2011 06/02/11 CA 11032 Top Ten U.S. Fresh Vegetables Exports to Canada 05/27/11 CA 11025 2011 Agent/Broker Directory – Central Canada 05/02/11 CA 11017 Exporting Alcoholic Beverages into the Canadian Market 04/08/11 CA 0047 Canada Trends – Natural/Health Foods 12/01/10 CA 0042 HRI Food Service Annual Report 11/01/10 FAS/Ottawa publishes the GAIN report This Week in Canadian Agriculture (TWICA) which highlights current Canadian agriculture and policy issues that are of concern to U.S. Agriculture. Interested U.S. exporters wishing to remain current on these issues may contact agottawa@fas.usda.gov to receive their 10 | P a g e Canada: Exporter Guide December 2012 copy. An example of a TWICA story line: From Issue 19 of 2012 Safe Food for Canadians Act Adopted by Senate On October 17, 2012, The Safe Food for Canadians Act (S-11) reached a key milestone when it was adopted by the Canadian Senate. Agriculture Minister Gerry Ritz and Senator Donald Plett highlighted the Safe Food for Canadians Act and the importance of passing it expeditiously so the Canadian Food Inspection Agency (CFIA) has more tools and resources to help keep Canadian food safe. http://inspection.gc.ca/about-the-cfia/newsroom/news-releases/2012-10- 17/eng/1350512151920/1350512143134 AGR TWICA Reports Date REPORT# CA 12045 This Week in Canadian Agriculture – Issue 21 11/26/12 Highlights: Canadian Biosafety Standards, Canadian Exports, Canadian Government Safe Food Act, S-11, and more. CA 12044 This Week in Canadian Agriculture – Issue 20 11/26/12 Highlights: Canadian Grain Commission’s Fees, Proposed Amendments on Maple Syrup Producers, and more. CA 12040 This Week in Canadian Agriculture – Issue 19 10/18/12 Highlights: XL Foods Update, Rooftop Produce Grower Starts, and more. CA 12035 This Week in Canadian Agriculture – Issue 18 08/17/12 Highlights: Amending Health and Animal Regulations, Canadian Lobstermen Upset by U.S. imports, and more. CA 12033 This Week in Canadian Agriculture – Issue 17 08/14/12 Highlights: Food Inspection Modernization Consultations, Western Canadian Grain Handlers, and more. CA 12032 This Week in Canadian Agriculture – Issue 16 08/03/12 CA 12028 This Week in Canadian Agriculture – Issue 15 07/20/12 CA 12025 This Week in Canadian Agriculture – Issue 14 07/06/12 CA 12022 This Week in Canadian Agriculture – Issue 13 06/15/12 CA 12021 This Week in Canadian Agriculture – Issue 12 06/01/12 11 | P a g e Canada: Exporter Guide December 2012 12 | P a g e Canada: Exporter Guide December 2012 SECTION III. BEST HIGH-VALUE PRODUCT PROSPECTS Canada's wholesale, retail, and food service industries watch with acute interest developments in packaged and processed foods and food service trends in the United States. While there are differences in the consumption patterns of selected food items in the two countries, there is a growing demand in Canada for new value-added foods that are market-proven in the United States. In FY 2012, consumer-oriented agricultural products represented 77% of the total US food and agricultural exports to Canada. The majority of consumer-oriented agricultural categories such as fresh fruits, red meats, snack foods, fresh vegetables, breakfast cereals, poultry meat, dairy products, pet foods, wine and beer, tree nuts, posted record annual sales to Canada. The top five categories were red meat ($2.1 billion), fresh fruits ($1.7 billion), snack foods ($1.7 billion), fresh vegetables ($1.6 billion), and processed fruits and vegetables ($1.3 billion). What’s Hot? What’s hot in the Canadian retail grocery market? What are some of the trends in retail grocery sales that U.S. exporters can capitalize on? While the previous paragraphs identify the leading U.S. consumer-oriented agricultural product categories that are dominating U.S. agricultural exports to Canada, the following are some of the hottest and trendiest foods and food trends capturing consumer attention and increased market share. Low Sodium Foods Canadian consumers are becoming more conscious about the level of sodium in prepackaged processed foods and in restaurant meal foods. A Canadian coalition of health groups is urging the Canadian government to set graduated targets for sodium according to food categories and to monitor the food industry’s progress. Figures from Statistics Canada show that the average Canadian consumes in excess of 3,100 mg of sodium a day with the major source identified as processed foods. Health Canada (like the U.S. National Academy of Sciences) has determined that an appropriate daily intake for a healthy adult is 1,200 mg to 1,500 mg of sodium. Health Canada has established a Food Regulatory Advisory Committee (FRAC) to help set new policies and standards for reducing dietary sodium levels. FRAC and its predecessor, the Sodium Working Group has since set a target of 33 percent reduction in average sodium intake to 2300 mg/day by year 2016. These are voluntary targets for food processors and are not mandated by the Canadian government. Functional Foods/Superfoods Functional foods, often referred to as “super foods” are gaining wide popularity among Canadian consumers focused on choosing foods that may help prevent disease and aging. Blueberries, almonds, yogurt, kefir, and even dark chocolate are some of the foods that are gaining favor in Canada as the new “super foods.” Antioxidants as immune boosting foods are receiving special attention as well. Organics Sales of organic foods continue to increase, and Canada is an important market for U.S. organic food. The U.S. supplies about 74 percent of the total market in Canada for prepackaged organic foods. Canadian organic production has concentrated on exports, mostly of bulk grains and oilseeds. In Canada, organic food sells at a price premium and sales are forecasted to rise, especially as quality and 13 | P a g e Canada: Exporter Guide December 2012 availability matches that of conventionally produced foods. The total retail market is estimated to be over C$ 2.2 billion in value and growing at 5 - 10 percent per year. Gluten Free With an estimated 1 in every 133 Canadians effected by Celiac Disease, there has been a strong push in Canada to offer more gluten-free food products. Celiac Disease is a medical condition in which the absorptive surface of the small intestine is damaged by gluten. Gluten is a protein commonly found in wheat, rye, tritcale, and barley. This has led towards growing popularity in ancient grains that are gluten free like millet, sorghum, quinoa, and amaranth. Other gluten-free foods growing in popularity are soybeans, corn, taro, yams, potatoes, rice, and tapioca. There is also growing evidence that a gluten-free diet may improve other chronic health issues. Pre-packaged Foods with Low Levels of Trans Fats Canada was the first country to require that the levels of trans fat in pre-packaged food be included on the mandatory nutrition facts table. That requirement took effect on December 12, 2007. It was intended, in part, for food labels to act as an incentive for the food industry to decrease the trans fat content of foods. Health Canada (HC) says that it has clearly had the desired effect as demonstrated by the significant number of products on the Canadian market that have already been reformulated. In June 2007, HC called on industry to voluntarily reduce the levels of trans fat in the Canadian food supply to the lowest levels recommended by the Trans Fat Task Force and announced that the government would monitor the progress. Canada’s Trans Fat Task Force recommended a trans fat limit of 2 percent of the total fat content for all vegetable oils and soft, spreadable margarines, and a limit of 5 percent of the total fat content for all other foods, including ingredients sold to restaurants. HC has asked industry to show significant progress to reduce trans fats levels, or it will introduce regulations to ensure the levels are met. HC has been monitoring trans fat levels in Canada and released its fourth report in December 2009. The fourth set of data is the last data set for the two-year Trans Fat Monitoring Program. Currently, Health Canada is analyzing the impact of the two year monitoring program on the average trans fat intake of Canadians to determine what the best approach would be to reach the targets recommended by the Trans Fat Task Force. The results are available on the HC website at: http://www.hc-sc.gc.ca/fn-an/nutrition/gras-trans-fats/tfa-age_tc-tm_e.html Snack Foods Snacking continues to be an important contributor to Canadians' daily food consumption as research shows Canadian are snacking more today than 10 years ago. It is estimated that 67 percent of Canadians eat 1-2 snacks daily. Controlled portions like 100 calorie snacks have grown in popularity. The savory snack category is expected to grow by 20.8% in Canada by 2020 and the sweet category may grow by 6.2% over the same period. Clean Diet Clean diet is a trend that is coming from Canadian mothers as primary caregivers for their family and children. A clean diet focuses on eating foods and food ingredients that the average consumer can pronounce. The objective is to reduce the consumption of artificial preservatives and non-natural occurring food products. 14 | P a g e Canada: Exporter Guide December 2012 SECTION IV. ROAD MAP FOR MARKET ENTRY Entry Strategy Food product manufacturers from the United States seeking to enter the Canadian marketplace have vast opportunities. The United States is Canada’s primary trading partner – more than 61 percent of Canada’s manufactured food imports originate from the United States. This is a result of a number of factors, including a convenient shipping corridor and a familiarity between consumer tastes and expectations. Although Canadians are always on the lookout for new and innovative U.S. products, there are a number of obstacles U.S. exporters must overcome before exporting to Canada. The major ones are include currency, customs procedures and labeling requirements. Overcoming these obstacles is possible with the right tools. The following are the main steps for U.S. food and beverage exporters to take to enter the Canadian market: 1. Contact your state regional trade office or the international specialist of your State Department of Agriculture. 2. Research the competitive marketplace. 3. Locate a Canadian broker/distributor/importer. 4. Understand Canadian government standards and regulations that pertain to your product. Step 1: Contact your State Regional Trade Office or the international specialist of your State Department of Agriculture. The State Regional Trade Group (SRTG) offices exist to help promote the export of U.S. food and agricultural products from specific geographical regions of the United States and can in some cases provide financial assistance as well as one-on-one counseling. Contact the SRTG office and ask about their export assistance services. The respective SRTGs are comprised of representatives from their regions’ Department of Agriculture and work together in supporting U.S. food companies. State Regional Web Site States Food Export USA http://www.foodexportusa.org Connecticut, Delaware, Maine, Northeast Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont Food Export http://www.foodexport.org Illinois, Indiana, Iowa, Kansas, Michigan, Association of the Minnesota, Missouri, Nebraska, North Midwest USA Dakota, Ohio, South Dakota, Wisconsin 15 | P a g e Canada: Exporter Guide December 2012 Southern U.S. http://www.susta.org Alabama, Arkansas, Florida, Trade Association Georgia, Kentucky, Louisiana, (SUSTA) Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Puerto Rico, Virginia, West Virginia Western U.S. http://www.wusata.org Alaska, Arizona, American Agricultural Trade Samoa, California, Colorado, Association Guam, Hawaii, Idaho, Montana, (WUSATA) Nevada, New Mexico, Oregon, Utah, Washington, Wyoming National http://www.nasda.org/cms/7195/8617.aspx State Directory of the State Association of Department of Agriculture State Departments of Agriculture (NASDA) Step 2: Research the competitive marketplace The State Regional Trade Groups will often have information on specific markets that they can provide to aid in market research. Furthermore, the FAS/Canada publishes market reports through the Global Agriculture Information Network (GAIN) for a number of commodities. To access these reports go to: http://gain.fas.usda.gov/Lists/Advanced%20Search/AllItems.aspx Step 3: Locate a broker/distributor/importer It is recommended that most new entrants to the Canadian market consider appointing a broker or develop a business relationship with a distributor/importer to enter the Canadian market. As the market is smaller than that of the U.S., food companies are urged to evaluate their Canadian business partners well. Factors such as work experience, the Canadian firm’s financial stability, product familiarity, account base, sales force, executive team commitment, and other considerations should be evaluated prior to future business transactions. A partial listing of Canadian food brokers is available on our latest brokers report, Agent/Broker Directory – Central Canada (CA 11025) available online at: http://gain.fas.usda.gov FAS/Canada can provide some assistance in identifying a broker/distributor/importer. In addition, companies are encouraged to visit and/or participate in specific trade shows in Canada (see http://www.ats-sea.agr.gc.ca/eve/eve-can-eng.htm for a complete listing of trade shows in Canada). These events provide an opportunity to exhibit products and meet potential buyers, brokers, distributors, and importers. FAS/USDA also endorses one of the largest food shows in Canada, SIAL Canada. The event rotates between Montreal, Quebec in the even years and Toronto, Ontario in the odd years. This year the show takes place in Toronto, April 30 to May 2, 2013. U.S. food companies wanting to exhibit in the USA Pavilion may contact Sharon Cook, USDA/FAS Washington, DC at sharon.cook@fas.usda.gov 16 | P a g e Canada: Exporter Guide December 2012 Step 4: Understand Canadian government standards and regulations that pertain to your product Review this Exporter Guide for Canadian government standards and regulations that pertain to your product and contact the Canadian National Import Service Centre listed below for further information. Canadian agents, distributors, brokers, and/or importers are also generally equipped to assist exporters through the import regulatory process. Canadian National Import Service Centre 7:00 a.m. to 03:00 a.m. (Eastern Time) Telephone and EDI: 1-800-835-4486 (Canada or U.S.A.) 1-289-247-4099 (local calls and all other countries) Fax: 1-613-773-9999 Mailing Address: 1050 Courtney Park Drive East Mississauga, Ontario L5T 2R4 Canadian agents, distributors, brokers, and/or importers are often the best equipped to assist exporters through the import regulatory process. The best entry method depends on the food product and the sub- sector identified as appropriate for each food product. Government and industry import policies and trade acts regulate each sub-sector. Each U.S. export opportunity must be thoroughly investigated relative to the legislation that exists for the product requesting entry. For additional information on the broadest Canadian regulations see the Food and Agricultural Import Regulations and Standards (FAIRS) Country Report and the FAIRS Export Certificate Report available online at: http://gain.fas.usda.gov SECTION V. FREQUENTLY ASKED QUESTIONS AND THEIR ANSWERS The following are some of the common questions asked by U.S. food and agricultural product exporters of the staff at the Office of Agricultural Affairs in Ottawa. 1. Question: Who can assist me with my labels? Answer: The Canadian Food Inspection Agency consolidates federal food label review under its "Food Labeling Information Service". At regional locations across Canada, these offices coordinate the requirements of all federal departments to simplify product approval and label compliance. It is recommended that U.S. exporters contact the CFIA regional office closest to the targeted marketing area (see list in "Label Review") for further questions. 2. Question: How long does it take to get a label review? Answer: If the U.S. exporter provides sufficient information with their submission to CFIA, a complete label assessment can be accomplished in about three to five weeks. 3. Question: How do I find a distributor? Answer: The USDA/FAS Office of Agricultural Affairs, U.S. Embassy Canada can provide marketing lists in helping U.S. companies identify a potential broker/distributor. Services available to help 17 | P a g e Canada: Exporter Guide December 2012 exporters locate appropriate brokers/distributors include USDA endorsed pavilions at various Canadian trade shows and referrals to the appropriate State Regional Trade Group (see "Entry Strategy" section). 4. Question: I know that Canada has a tariff rate quota for certain dairy and poultry products. How do I know if my particular dairy or poultry product is going to be affected by Canadian tariff rate quotas? Answer: For a determination as to whether or not the product you intend to export into Canada is within the scope of Canada’s tariff rate quota (TRQ), contact Canada Border Services Agency. Contact information can be found at the following webpage: http://cbsa-asfc.gc.ca/publications/dm-md/d10/d10-18-1-eng.html 5. Question: How do I identify the major Canadian importers of my product(s)? Answer: Industry Canada (IC) has a database of major Canadian importers by product type. Access the database at the IC web page: http://www.ic.gc.ca/eic/site/cid-dic.nsf/eng/home 6. Question: Will there be import duties on my food products entering Canada? Answer: Under provisions of the U.S./Canada Free Trade Agreement and the North American Free Trade Agreement (NAFTA), the majority of Canadian import duties on all U.S. food and commercial products have been phased out with a few exceptions like over-quota tariffs on dairy and poultry products. However, there are federal excise taxes and surcharges on alcoholic beverages. If using the services of a customs broker, there will be clearance and handling fees as well. 7. Question: I’ve heard that U.S. fruit and vegetable exporters can’t sell apples or potatoes to Canada. Is this true? Answer: There are package-size regulations restricting bulk imports if Canadian supplies are available, but imports in consumer and wholesale sized packages are permitted. In fact, US apple exports to Canada averaged $150 million per year between 2008 and 2012. Commonly referred to as Canada’s “bulk waiver” requirement (or ministerial exemption), processors or packers must apply to the Canadian Food Inspection Agency (CFIA) for a special exemption to import bulk products. In late 2007, the United States and Canada inked an arrangement to facilitate bilateral potato trade. The arrangement will provide U.S. potato producers with predictable access to Canadian Ministerial exemptions. 8. Question: My company is new to exporting. Can I test market my product(s) in Canada with my U.S. label? I don’t want to produce a label for the Canadian market until I know it will be successful. Answer: Canada’s test marketing provision is designed to facilitate the marketing of new products of a type that are new, unique and unavailable in Canada. It does not apply to U.S. brand introductions into Canada for processed foods commonly found on retail shelves (see "Test Marketing" section). We encourage U.S. exporters to work with their respective State Regional Trade Group to see if they qualify for export assistance programs as some of the costs on packaging and labeling modifications may be covered. 18 | P a g e Canada: Exporter Guide December 2012 SECTION VI. CONTACTS Office of Agricultural Affairs U.S. Embassy, Canada P.O. Box 5000, MS-30 Ogdensburg, NY 13669-0430 Telephone: (613) 688-5267 Fax: (613) 688-3124 Email: agottawa@fas.usda.gov Scott Reynolds, Agricultural Minister-Counselor Robin Gray, Agricultural Attaché Darlene Dessureault, Senior Agricultural Specialist Erin Danielson, Agricultural Specialist Mihai Lupescu, Agricultural Specialist Sonya Jenkins, Marketing Specialist Joyce Gagnon, Administrative Assistant Foreign Agricultural Service U.S. Consulate General Toronto P.O. Box 135 Lewiston, NY 14092-0135 Telephone: (416) 646-1656 Fax: (416) 646-1389 Email: agtoronto@fas.usda.gov Maria Arbulu, Senior Agricultural Marketing Specialist Summary of Useful Websites The following is a listing of the major Canadian websites mentioned in the body of this report: Canada Border Services Agency http://www.cbsa-asfc.gc.ca/menu-eng.html Canadian Food Inspection Agency Home Page http://www.inspection.gc.ca Acts and Regulations http://www.cfia-acia.agr.ca/english/reg/rege.shtml Guide to Food Labelling and http://www.inspection.gc.ca/english/fssa/labeti/guide/toce.shtml Advertising Meat & Poultry Inspection http://www.inspection.gc.ca/english/fssa/meavia/meaviae.shtml Regulations Fish Inspection Directorate http://www.inspection.gc.ca/english/fssa/fispoi/fispoie.shtml 19 | P a g e Canada: Exporter Guide December 2012 Department of Foreign Affairs and http://www.international.gc.ca/international/index.aspx International Trade Industry Canada Home Page http://www.ic.gc.ca/eic/site/ic1.nsf/eng/home Canadian Importers http://www.ic.gc.ca/eic/site/cid-dic.nsf/eng/home Trade Data Online http://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/Home Health Canada Home Page http://www.hc-sc.gc.ca/index-eng.php Food and Drugs Act http://laws.justice.gc.ca/en/F-27/ Nutrition Labeling http://www.hc-sc.gc.ca/fn-an/label-etiquet/nutrition/index_e.html Natural Health Products http://www.hc-sc.gc.ca/dhp-mps/pubs/natur/index-eng.php Food Allergen Labeling http://www.hc-sc.gc.ca/fn-an/label-etiquet/allergen/index-eng.php Nove http://www.hc-sc.gc.ca/fn-an/gmf-agm/index-eng.php l Foods Justice Department On http://www.justice.gc.ca -Line Access to Official Canadian Acts & Regulations Pest Management Regulatory Agency Max http://www.pmra-arla.gc.ca/english/aboutpmra/about-e.html imum Residue Levels SECTION VII. EXPORTER SERVICES, BUSINESS PROCEDURES, AND FOOD REGULATIONS A) Export Services for U.S. Food and Agricultural Exporters USDA-FAS offers a variety of export marketing services to assist U.S. exporters find customers overseas. Whether a new or experienced exporter, USDA-FAS services offer tools to grow a business. Services United States Department of Agriculture/Foreign Agricultural Service Trade Lead System (TLS) - Is a cooperative effort between FAS overseas offices, state departments of agriculture, industry 20 | P a g e Canada: Exporter Guide December 2012 cooperator groups and U.S. agricultural exporters. The TLS sources foreign importers requests and qualifies these inquiries which are later disseminated to U.S. firms. To view foreign trade leads and register a U.S. company profile in the TLS, go to and click under U.S. suppliers : http://fas1.agexportservices.org/apps/rfps/info.asp State Regional Trade Groups - U.S. suppliers new to exporting or new to a foreign market are encouraged to contact their State Regional Trade Groups (SRTGs) for assistance. The SRTGs, administer and market FAS/USDA export assistance programs. They offer a range of customized export assistance services that are tailored to U.S. food processing firms. http://www.fas.usda.gov/agx/counseling_advocacy/srtg_directory.asp Export Directory of U.S. Food Distribution Companies - This directory provides information on U.S. suppliers of mixed containers of grocery and/or food service products to foreign buyers. Registration is free of charge. http://www.fas.usda.gov/agx/buying_us/directory_food_distribution.asp U.S. Suppliers List (USL) - A searchable database of over 7,000 U.S. exporters and their products (over 500 product categories), used by USDA-FAS to help facilitate connecting potential buyers with U.S. suppliers. Registration is free of charge. http://www.fas.usda.gov/agx/partners_trade_leads/us_suppliers_list.asp State Departments of Agriculture The state departments of agriculture and associated organizations promote U.S. food, beverage, and agricultural exports and are an additional valuable source of information. The National Association of State Departments of Agriculture (NASDA) represents all 50 state departments of agriculture and those from the trust territories of Puerto Rico, Guam, American Samoa, and the Virgin Islands. In addition, there are four regional organizations associated with their respective departments of agriculture. Prospective exporters are encouraged to check with their respective state and/or regional organizations for assistance. Website: http://www.nasda.org Country Commercial Guides The Country Commercial Guides (CCG) are prepared by U.S. Embassy staff annually and contain information on the business and economic situation of foreign countries and the political climate as it affects U.S. business. Each CCG contains the same chapters and an appendix which include topics such as marketing, trade regulations, investment climate, and business travel. This information is available at http://export.gov/mrktresearch/index.asp Food Brokers For U.S. companies entering the Canadian market, it is helpful to find a Canadian food broker to help with the logistics of entering the country in addition to marketing products. For a partial listing of Canadian food brokers refer to the latest food brokers report (CA 11025) on the FAS web site: http://gain.fas.usda.gov Credit Checks Besides the well-known private credit service checks that may be available, the U.S. Commercial Service (USCS) International Trade Administration offers the International Company Profile Service 21 | P a g e Canada: Exporter Guide December 2012 designed to verify the credit worthiness of companies in Canada. A U.S. company seeking more information on the World Traders Data Report (WTDR) service should contact the closest U.S. Export Assistance Center (USEAC) in the United States. The USCS also offers additional services to help U.S. exporters: http://export.gov/salesandmarketing/eg_main_018198.asp B) Business Customs Import Procedures The Commercial Import Process In order to bring goods into Canada, importers must provide the proper documents to the Canadian Border Services Agency including: Two copies of the cargo control document (CCD) Two copies of the invoice; http://www.cbsa.gc.ca/publications/forms-formulaires/ci1.pdf Two copies of a completed Form B3, Canada Customs Coding Form Most U.S. products receive a duty free tariff treatment under NAFTA. Shipments exceeding CAD$ 1,600 require a copy of the NAFTA certificate of origin to be retained by the importer on file for up to ten years. http://forms.cbp.gov/pdf/CBP_Form_434.pdf Any import permits, health certificates, or forms that other federal government departments require; calculate and declare the value for duty of the imported goods (where necessary) according to the valuation provisions of the Customs Act; all goods are to be properly marked with their country of origin; pay any duties that apply. This information can be found at the site below: http://www.cbsa-asfc.gc.ca/import/acc-resp-eng.html Automated Import Reference System (AIRS) of the Canadian Food Inspection Agency Shipments requiring a NAFTA certificate of origin will require a Harmonized Commodity Description (HS) tariff classification number in section six of the form. This number can be obtained on the AIRS system at: http://www.inspection.gc.ca/english/imp/airse.shtml To further understand the customs classifications and harmonized system codes (HS) go to: http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-05-eng.html Additional assistance on tariff classifications can be obtained by contacting a tariff specialist at the Canadian Border Services Agency (CBSA) at 204-983-3500 or 506-636-5064.  Tip: The tariff schedule is organized in a hierarchical order with the least processed foods in the first chapters and the more processed foods in the later chapters. e.g. vegetables in chapter 7 and cereal preparations in chapter 19.  Tip: Exporters are urged to write in the complete set of 8 to 12 digit HS code on their customs documents as this will avoid shipment delays. Customs Brokers 22 | P a g e Canada: Exporter Guide December 2012 Many U.S. firms use the services of a Canadian customs broker (a private company operating as a trade facilitator). According to the Canadian Society of Customs Brokers close to 80% of import transactions into Canada are handled by a customs broker. These companies assist exporters in complying with Canadian import requirements and clearing shipments at the border. The Canada Border Services Agency (CBSA) licenses customs brokers to carry out customs related responsibilities on behalf of their clients. Some brokers’ services may include: Obtaining release of the imported goods Paying any duties that apply Obtaining, preparing, and presenting or transmitting the necessary documents or data Maintaining records Responding to any Canada Customs and Revenue Agency concerns after payment Warehousing and distribution of a exporter’s products Clients must pay a fee for these services, which the brokerage firm establishes. These fees vary based by broker and shipment. Alternatively, importers who do not wish to use the services of a customs broker may authorize an agent to represent them. Although importers may use an agent to complete transactions with the CBSA, the importer is ultimately responsible for the accounting documentation, payment of duties and taxes, and subsequent corrections such as re-determination of classification, origin and valuation. The importer remains liable for all duties owing, either the importer or the agent may pay them on their client’s behalf. Agents are required to obtain written authorization from their clients in order to transact business on behalf of their clients. This business may include but is not limited to: Registering for a Business Number (BN), Importer/Exporter Account Providing assistance in cases involving the Special Import Measures Act (SIMA) Submitting refund requests (B2s) Preparing release (interim accounting) documentation Preparing final accounting documentation Remitting payment of duties and taxes to the Receiver General of Canada For additional information, contact: Canadian Society of Customs Brokers Suite 320, 55 Murray Street Ottawa, ON K1N 5M3 Tel.: 613-562-3543 Fax: 613-562-3548 Email: cscb@cscb.ca Web Site: www.cscb.ca Searchable list of members: http://www.cscb.ca/  Tip: Brokerage fees are determined by the cost of goods and the amount. U.S. exporters should inquire about these fees prior to shipping their products as this may influence their selling price to their Canadian customer. 23 | P a g e Canada: Exporter Guide December 2012 Small Parcel Shipments In recent years both Canada Post and courier companies have seen an increase in cross-border shipments. The exporter is required to complete all necessary documentation as e.g. way bill, commercial invoice, if applicable, permits, certificates or forms mandated by the Canadian government. Those shipments exceeding C$ 20.00 are subject to custom duties, a handling fee and sales taxes (Goods and Services Tax /Harmonized Tax are collected by the Canada Border Service Agency (CBSA) 4. Exporters from the United States are encouraged to calculate all charges beforehand, including brokerage fees if applicable, as these added costs affect the acceptable selling price to the buyer. For additional information please visit: Canada Border Services Agency on Importing by Mail http://www.cbsa-asfc.gc.ca/import/postal-postale/duty-droits-eng.html United States Postal Service (USPS) on Country Conditions for Mailing – Canada http://pe.usps.com/text/imm/ce_003.htm  Tip: U.S. exporters are urged to research their options when shipping small parcels to Canada. Custom clearance charges on small courier parcels are proportionally higher than that of larger shipments.  Tip: To avoid courier shipments being stuck in customs, U.S. exporters are urged to inquire if the appointed courier service is able to act as their assigned customs broker. If so, then it is to be noted clearly on the courier’s international waybill. Sample Products Food samples for research, evaluation, or display at trade shows and food exhibitions are permitted entry, but may not be offered for commercial sale. For meat, poultry, dairy or egg, and fruits and vegetable samples it is recommended that exhibitors apply for an import permit and declare that the food is not for resale. The Canadian Food Inspection Agency will direct inquiries for permits to the appropriate office. Additional regulations are discussed in Section II of this report. Entry at the border will be facilitated if U.S. exporters show proof of their food exhibition participation and that the products are of U.S. origin. In general, up to 10 samples are permitted entry, but the weight of each may not exceed 100 kilograms (about 220 pounds). Entries for personal consumption are generally restricted to 20 kg. To ensure there are no cross border delays, U.S. exporters are reminded to note on their commercial invoice; products not for commercial sale and to check if the product requires additional permits or certificates. Importation requirements can be found on the AIRS system at: http://inspection.gc.ca/english/imp/airse.shtml 4 Customs duties are not to be confused with other duties. Products qualifying under NAFTA are duty free Non-Resident Importers and the Good and Services Tax/Harmonized Sales Tax Most basic groceries are zero-rated by the Canadian Revenue Agency (CRA) and do not pay federal taxes, referred as the Goods and Services Tax (GST) / Harmonized Sales Tax (HST). However, certain 24 | P a g e Canada: Exporter Guide December 2012 foodstuffs as alcoholic beverages, carbonated drinks, snack foods and candies are taxable. To review the definition of basic groceries go to: Canada Revenue Agency – 4.3 Basic Groceries http://www.cra-arc.gc.ca/E/pub/gm/4-3/README.html For those taxable food items, exporters may consider the benefits of establishing their company as a Non-Resident Importer (NRI) as they may reclaim the federal Goods and Services Tax (GST) of 5%. Those exporters not registered as a NRI, will have no recourse to claim the GST assessed on their shipments to Canada. In the provinces of British Columbia, Ontario, and the Atlantic Provinces the federal tax has been harmonized with the provincial tax and are recognized as the Harmonized Sales Tax (HST). In Quebec, the taxes are combined as well but are referred to as the Quebec Sales Tax (QST). In both instances a non-registered NRI will be assessed both provinc
Posted: 11 January 2013

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