Video—Customs Duties

Video Transcript

Even in this era now of free trade, customs duties are an important source of revenue for the federal government. And in fact, in 2015–16, the federal government collected about $5 billion worth of revenue in customs import duties.

But the audit that we did showed that compliance in the system of duties isn't always what it should be, and that means that the federal government may be missing out and not collecting duties on everything that's coming into Canada that they should be charging duties on.

Duties and taxes have to be paid on postal imports with a value of more than $20. That's a threshold that the Department of Finance Canada hasn’t changed in more than 25 years.

We found that for postal shipments valued at less than $200, it cost more to collect the customs duties than the amount of the duties themselves.

We also estimated that, in 2015 alone, $168 million of duties were not paid by importers who exceeded the permitted amounts for goods like chicken or dairy products. Custom duties are too complex for the Agency to enforce and that makes it easy for importers to bypass rules and regulations.

The system for assessing customs duties doesn't meet the needs of today. It can be expensive to apply, it can be difficult to administer, and, in fact, what we found was that the system as it exists on paper is different that the system as it's actually being applied in practice.