• Canada’s system mirrors the global HS framework. 

• Classification accuracy ensures the correct Most-Favoured-Nation (MFN) rate when no trade agreement applies. 

• Apparel, footwear, and accessories typically carry MFN duty rates of 16–20%, while beauty products vary by formulation and packaging. 

Reference: CBSA Customs Tariff Search 

Key agreements relevant to apparel, footwear, and beauty products include: 

• CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
  Covers major sourcing countries such as Vietnam, Malaysia, Japan, Singapore, and Australia. Many apparel and footwear products manufactured in Vietnam or Malaysia qualify for 0% duty under CPTPP. 

• Least Developed Country Tariff (LDCT) Program
  Provides duty-free treatment to apparel and footwear manufactured in Bangladesh, Cambodia, Myanmar, and numerous other designated developing nations. 

• CETA (Canada–European Union Trade Agreement)
  Grants duty-free access to most goods originating from the EU, including Portugal, Italy, Spain, Poland, Romania, and all other member states. 

• Canada–UK Trade Continuity Agreement
  Mirrors CETA provisions post-Brexit, maintaining near-identical tariff preferences for UK-origin goods. 

• USMCA / CUSMA (United States-Mexico-Canada Agreement)
  Eliminates duty for qualifying goods manufactured in North America. However, this applies only to goods made in the U.S. or Mexico, not simply shipped from them.

If goods are first imported into the U.S. (or any third country) and later shipped north, those duty benefits are lost, and the shipment defaults to MFN rates. 

Example:
A jacket manufactured in Vietnam qualifies for 0% duty under CPTPP only if shipped directly from Vietnam to Canada.
If the same jacket first lands in a U.S. warehouse and is later trucked to Canada, it will be treated as U.S. origin for customs purposes — and subject to full MFN duty (often 18–20%). 

Direct-to-Canada routing often represents a 15–20% cost advantage compared to trans-shipping through the U.S.

• Declared value for duty. 

• Country of origin. 

• HS classification and applicable tariff treatment. 

Your Canadian customs broker typically manages this process, paying duties and import GST on your behalf and invoicing you for reimbursement.
Unlike GST/HST (a recoverable flow-through tax), duties and tariffs are true costs that remain part of landed cost.

1. Duty Deferral 

Import duties can be deferred on goods that are stored in Canada and later exported, such as U.S.-bound e-commerce orders or international returns. 

• This allows brands to postpone payment of duty until the goods enter the Canadian market. 

• When those same goods are later exported, the duty obligation can be cancelled entirely. 

• The deferral mechanism ensures capital isn’t tied up in duties on inventory that never stays in Canada. 

This approach is ideal for brands using Canada as a continental distribution hub—supporting Canadian sales while staging exports to the U.S. or other destinations. 

2. Duty Drawback Programs 

If you do pay duty on imported goods that are later exported, Canada’s drawback program allows you to reclaim those costs in full. 

• No minimum claim amount: Unlike the U.S., Canada imposes no threshold for filing drawback claims. 

• Streamlined process: Most claims are managed by your customs broker, typically on a monthly or quarterly basis. 

• High recovery rate: As long as exports can be matched to original import documentation, 100% of duties can be refunded. 

• Terminology note: This prevents double-duty—paying once when goods enter Canada and again when they enter the U.S. or another market. 

Together, deferral and drawback programs reduce or eliminate duty on goods that transit through Canada without remaining in the local market. 

3. Direct-to-Canada Import 

A critical strategy for maximizing savings is importing directly into Canada from the country of manufacture. 

• Goods shipped directly from source (e.g., Vietnam, Cambodia, the EU, or the UK) can qualify for 0% duty under Canada’s various free trade agreements. 

• Goods that first enter the U.S. or any third country lose eligibility for these preferential rates and default to the higher Most-Favoured-Nation (MFN) duty. 

• Direct routing avoids unnecessary duty stacking and preserves the full benefit of Canada’s trade agreements. 

By combining these strategies—deferral, drawback, and direct-to-Canada import—brands can dramatically reduce landed costs and protect margins while maintaining full compliance with Canadian customs law. 

• Canada’s import process mirrors international standards — nothing new to learn. 

• The advantage lies in Canada’s trade agreements and duty-recovery mechanisms. 

• To benefit from 0% duty, goods must ship directly into Canada from the country of manufacture. 

• Drawback filings are simple, have no minimum threshold, and are usually handled by your customs broker. 

• Always distinguish between duties (a cost of goods) and GST/HST (a recoverable flow-through tax).