Exporting to Canada offers a significant opportunity for Italian companies, thanks to the country's historic openness to international trade and the strong demand for Made in Italy branded products. The Canada, with its political stability, a solid economy and a 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.
Since 21 September 2017, the CETA (Comprehensive Economic and Trade Agreement) between the European Union and Canada. This agreement facilitates access to this country's market, almost entirely eliminating customs tariffs, opening public procurement to European companies, protecting geographical indications and facilitating worker mobility, as well as offering advantageous conditions for investments.
In the last four years, trade between Italy and Canada has recorded significant and constant growth, with an increase of 27.7% in the value of Italian exports from 2019 to 2022 (Foreign Market Info). Since the introduction of CETA, trade has been grown by approximately 60%.
Let's take a closer look at this market, the sectors of greatest interest and the export requirements.
In 2023, according to Canadian statistics, the imports of Italian goods into Canada reached 12.9 billion Canadian dollars, recording an increase of 6.2% compared to the previous year.
Comparing the first quarter of 2024 with that of 2023, a 12% reduction in imports from Italy is observed, particularly in the manufacturing sector. However, the pharmaceutical and wine sectors showed growth in 16% and 10%, respectively. Despite these declines, Italy continues to maintain its position in eighth place among the main exporters to Canada.
There are various export sectors of particular interest for Italian companies that intend to undertake a process of export internationalization in Canada. Let's see the main ones.
The sector of food production plants and packing and packaging systems, one of the 15 key sectors of the project "Machines Italy“, represents a significant opportunity for the expansion of advanced Italian technologies in Canada. This is due to the dynamic characteristics of the local market and the promising short and medium-term growth prospects.
The Canadian mining industry, with over 60 metals and minerals present in the territory, is a fundamental pillar of the country's economy. Italy ranks as Canada's eighth largest supplier of mining machinery and technology, with an export value of CAD 55.49 million in 2022, up from CAD 52.7 million the previous year.
Canada is a significant market in the furniture sector, of which it is the 11th largest producer in the world. In 2022, Canada imported furniture totaling CAD 7.29 billion. Italy, renowned for the quality and design of its products, placed fifth with exports of CAD 291 million, an increase compared to the previous year.
In 2022, Italy ranked fourth forexport of food products to Canada, recording an increase of 11.5% compared to the previous year. The Canadian market continues to grow for Italian agri-food products, with particularly high demand for olive oil, cheeses, pasta and cured meats. Thanks to the elimination of customs duties provided for by CETA, 41 Italian names are protected, representing over 90% of Italian food exports to Canada.
There Canadian Food Inspection Agency (CFIA), the Canadian equivalent of the American FDA, is the federal body responsible for monitoring food safety in Canada.
It is responsible for ensuring the compliance and application of the SFCR – Safe Food for Canadians Regulations, which came into force in 2019 by repealing and replacing the pre-existing regulations. The SFCR was a major regulatory revolution in Canada, placing a greater emphasis on prevention and allowing for faster removal of unsafe foods from the market.
CFIA inspectors are present at Canadian Customs to check incoming food products, ensuring safety standards are met.
The main requirements under the SFCR for importers are as follows:
However, the following rules apply to exporters:
Regulations for importing food products into Canada are generally less restrictive, especially for long-life or "shelf-stabilized" products such as preserves and sauces. However, it is important to note that in Canada there are specific provincial-level regulations that may require specific reviews and adjustments. It is therefore crucial to carefully check the regulations of the province in which the importation and sale of the products will take place.
Unlike the United States However, to import into Canada you do not need a business registration or the appointment of an agent equivalent to the FDA Agent.
To import commercial goods into Canada, you must obtain a Business Number (BN) from Canada Revenue Agency (CRA), which allows you to open an import/export account for free.
It is important to collect detailed information about 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 goods, necessary to establish the applicable customs rate.
Next you need 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.
You need to check whether your goods are subject to Goods and Services Tax (GST), excise duty or other taxes. GST, equal to 5%, applies to most goods at the time of importation.
Some products, such as medical devices, agricultural and seafood products, are exempt from this tax. In such cases, the exemption code must be reported on the Canadian Customs Coding Form B3.
Finally, you need to determine the value of the duty, which is usually the amount paid to the seller for the goods. The value declaration must be supported by a receipt or invoice from the supplier, containing the conditions of the transaction, the sales price, a detailed description of the product.
For customs clearance of the goods, it is necessary to present the following documents in duplicate:
These documents can be presented in paper format or, with prior authorization, via Electronic Data Interchange (EDI).
Goods coming from Italy, considered a favored nation, are subject to duties established by the Customs Tariff, the Tax Act, the Excise Act, the Special Import Measures Act and other federal regulations.
Octagona, specialized in consultancy for the internationalization of companies, supports Italian companies interested in exporting to Canada, providing customized solutions to overcome legal and logistical barriers and facilitate access to the Canadian market.
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