Exporting to Canada offers a significant opportunity for Italian companies, thanks to the country's historic openness to international trade and strong demand for Made in Italy branded products. The Canada, with its political stability, robust economy and well-regulated labor market, offers advantageous conditions for production costs and access to credit, factors that make it a highly attractive market for Italian companies.
As of September 21, 2017, it is provisionally in effect the CETA (Comprehensive Economic and Trade Agreement) between the European Union and Canada. This agreement facilitates market access to this country by almost entirely eliminating tariffs, opening government procurement to European companies, protecting geographical indications and facilitating labor mobility, as well as offering favorable terms for investment.
Over the past four years, trade between Italy and Canada has grown significantly and steadily, with the value of Italian exports increasing by 27.7% from 2019 to 2022 (Foreign Markets Info). Since the year of the introduction of CETA, trade interchange has grown by about 60%.
Let's take a closer look at this market, the sectors of greatest interest and export requirements.
In 2023, according to Canadian statistics, the imports of Italian goods into Canada reached C$12.9 billion, registering an increase of 6.2% over the previous year.
Comparing the first quarter of 2024 with that of 2023, there was a 12% decrease in imports from Italy, particularly in the manufacturing sector. However, the pharmaceutical and wine sectors showed growth of 16% and 10%, respectively. Despite these declines, Italy continues to maintain its position as the eighth largest exporter to Canada.
There are several export sectors of particular interest to Italian companies wishing to embark on a path of internationalization in Canada. Let's look at the main ones.
The sector of food production equipment and packaging and packaging systems, one of the 15 key sectors of the “Machines Italy“, represents a significant opportunity for the expansion of Italian advanced technologies in Canada. This is due to the dynamic characteristics of the local market and promising growth prospects in the short and medium term.
Canada's mining industry, with more than 60 metals and minerals in its territory, is a key pillar of the country's economy. Italy ranks as Canada's eighth largest supplier of machinery and technology to the mining sector, with an export value of CAD 55.49 million in 2022, up from CAD 52.7 million in the previous year.
Canada is a significant market in the furniture sector, of which it is the world's 11th largest producer. In 2022, Canada imported furniture totaling CAD 7.29 billion. Italy, renowned for the quality and design of its products, ranked fifth with exports of CAD 291 million, up from the previous year.
In 2022, Italy was ranked fourth for the’export of food products to Canada, registering an increase of 11.5% over the previous year. The Canadian market continues to grow for Italian agri-food products, with particularly high demand for olive oil, cheese, pasta and cured meats. Thanks to the elimination of customs duties under CETA, 41 Italian names are protected, accounting for over 90% of Italian food exports to Canada.
La Canadian Food Inspection Agency (CFIA), the Canadian equivalent of the U.S. FDA, is the federal agency responsible for food safety oversight in Canada.
It is responsible for ensuring compliance and enforcement of the SFCR - Safe Food for Canadians Regulation.s, which came into effect in 2019 repealing and replacing pre-existing regulations. The SFCR has been a major regulatory revolution in Canada, placing a greater emphasis on prevention and enabling faster removal of unsafe foods from the market.
CFIA inspectors are present at Canadian customs to check incoming food products, ensuring that safety standards are met.
The main requirements under the SFCR for importers are as follows:
Instead, the following rules apply to exporters:
Food import regulations in Canada are generally less restrictive, especially for long-life or “shelf-stabilized” products such as canned goods and sauces. However, it is important to note that there are specific provincial regulations in Canada that may require specific revisions and adjustments. Therefore, it is crucial to carefully check the regulations of the province where the importation and sale of products will take place.
Unlike the United States however, to import into Canada does not require corporate registration or the appointment of an FDA Agent equivalent.
To import commercial goods into Canada, it is necessary to obtain a Business Number (BN) from the Canada Revenue Agency (CRA), which allows the free opening of an import/export account.
It is important to collect detailed information on the products to be exported to Canada, including descriptive documentation, composition details and, if possible, samples. This data is essential to determine the correct tariff classification of the goods, which is necessary to determine the applicable customs rate.
Next, it is necessary to identify the appropriate tariff treatment for the goods. In the Canadian Customs Tariff there are two columns: the “Most Favored Nation (MFN) Tariff,” applicable to all countries except North Korea, and the “Preferential Tariffs,” which indicate preferential tariffs under trade agreements.
It is necessary to check whether the goods are subject to Goods and Services Tax (GST), excise or other taxes. GST, amounting to 5%, applies on most goods at the time of importation.
Some products, such as medical devices, agricultural and fish products, are exempt from this tax. In such cases, the exemption code should be reported on the Canadian Customs Coding Form B3.
Finally, it is necessary to determine the value of the duty, which is usually the amount paid to the seller for the goods. The statement of value must be supported by a receipt or invoice from the supplier, containing the terms of the transaction, the selling price, and a detailed description of the product.
For customs clearance of goods, the following documents must be submitted in duplicate:
These documents can be submitted in hard copy or, with permission, via Electronic Data Interchange (EDI).
Goods from Italy, which is considered a favored nation, are subject to duties established by the Customs Tariff, Tax Act, Excise Act, Special Import Measures Act and other federal regulations.
Octagona, specializing in business internationalization consulting, supports Italian companies interested in exporting to Canada by providing customized solutions to overcome legal and logistical barriers and facilitate access to the Canadian market.
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