Glossary of Trade and Customs Terms

AMPS (Administrative Monetary Penalty System)

The penalty framework used by CBSA to enforce customs compliance. Penalties under AMPS can reach up to $400,000 per infraction and are assessed for errors such as incorrect tariff classification, failure to pay duties, or invalid origin claims. Penalties are graduated -- first-time infractions typically receive lower penalties than repeat violations.

BSF987

The official CBSA form used to request an adjustment to a previously filed customs accounting declaration. Importers use the BSF987 to correct errors in duty amounts, tariff classification, or origin declarations after goods have already been released. It can be used for both voluntary disclosures (self-corrections) and CBSA-directed adjustments.

CARM (CBSA Assessment and Revenue Management)

CBSA's online portal for importers to manage their customs accounts, file declarations, make payments, and view their trade data. CARM replaced the legacy customs accounting system in October 2024. All Canadian importers must have a CARM account to import commercial goods.

CBSA (Canada Border Services Agency)

The federal agency responsible for border enforcement, customs administration, and trade compliance in Canada. CBSA administers the Customs Tariff, collects duties and taxes on imported goods, conducts compliance audits, and enforces trade remedy measures including surtaxes.

CN (Customs Notice)

An official CBSA publication that communicates changes to customs procedures, tariff classifications, enforcement priorities, or trade policy. Customs Notices serve as early warnings for importers about upcoming changes. TariffTrail monitors relevant Customs Notices as part of its surtax and tariff data pipeline.

CUSMA (Canada-United States-Mexico Agreement)

The trilateral trade agreement between Canada, the United States, and Mexico, in effect since July 1, 2020. CUSMA (known as USMCA in the United States) provides preferential tariff treatment -- often zero duty -- for goods that meet the agreement's rules of origin. To claim CUSMA preferential treatment, the importer must have a valid certification of origin and the product must satisfy the applicable Product-Specific Rule of Origin. CUSMA includes a triennial review clause; the next review is scheduled for July 2026.

Customs Tariff

The Canadian Customs Tariff is the federal schedule that sets the duty rates for all goods imported into Canada. It is organized by HS code and specifies the MFN rate (default rate) and any preferential rates available under trade agreements. Maintained under the Customs Tariff Act (S.C. 1997, c. 36).

De Minimis

A threshold rule under CUSMA that allows a product to contain a small percentage of non-originating materials and still qualify for preferential treatment. For most goods, non-originating materials must not exceed 10% of the transaction value. For textiles, the threshold is based on weight.

Duty

A tax imposed on goods at the time of import. In Canada, import duties are assessed based on the product's tariff classification (HS code), country of origin, and the applicable rate from the Customs Tariff. Types include MFN duty (default rate), preferential duty (reduced rates under trade agreements), and surtax (additional duty imposed by order-in-council).

GST (Goods and Services Tax)

A 5% federal tax applied to most goods imported into Canada. GST on imports is calculated on the total of the customs value plus all applicable duties and surtaxes. Importers registered for GST can claim an input tax credit to recover the GST paid on imported business inputs.

HS Code (Harmonized System Code)

A standardized numerical classification used worldwide to identify traded products. In Canada, HS codes are 10 digits long formatted as XXXX.XX.XX.XX:

• Chapter (first 2 digits): broad product category (e.g., 73 = articles of iron or steel)
• Heading (first 4 digits): product group (e.g., 7318 = screws, bolts, nuts)
• Subheading (first 6 digits): specific product type (e.g., 7318.15 = threaded screws)
• Tariff item (all 10 digits): Canada-specific classification

HS codes determine the applicable duty rate, surtax status, and trade agreement eligibility for every imported product.

Landed Cost

The total cost of importing a product into Canada, including the customs value (value for duty), MFN duty, any applicable surtax, and GST. Represents the true cost of goods at the point of entry before domestic transportation, warehousing, or provincial taxes.

MFN Rate (Most Favoured Nation Rate)

The default duty rate applied to goods from any WTO member country. The MFN rate is the starting point for duty calculation. It can be reduced or eliminated if the goods qualify for preferential treatment under a trade agreement such as CUSMA. Surtaxes are assessed in addition to the MFN rate, not as a reduction.

Order-in-Council

A legal instrument issued by the Governor General on the advice of Cabinet. In trade, orders-in-council are used to impose surtaxes under section 53 of the Customs Tariff. Each receives a Statutory Order and Regulation (SOR) number and is published in the Canada Gazette Part II. They can take effect immediately upon publication.

PIPEDA (Personal Information Protection and Electronic Documents Act)

Canadian federal privacy legislation governing how private-sector organizations collect, use, and disclose personal information. Requires organizations to obtain meaningful consent before collecting personal data and to protect it with appropriate safeguards.

PSRO (Product-Specific Rule of Origin)

The specific criteria a product must meet to qualify for preferential tariff treatment under CUSMA. Defined in CUSMA Annex 4-B and varying by HS classification. Common types include tariff shift, Regional Value Content (RVC), or a combination of both.

Remission Order

A federal order that partially or fully relieves importers from paying duty or surtax on specific goods under specific conditions. Issued by order-in-council and published in the Canada Gazette. Typically time-limited and may require conditions such as using the goods in domestic manufacturing.

RLS (Row-Level Security)

A PostgreSQL database security feature that restricts which rows a user can access based on their identity. TariffTrail uses RLS to enforce multi-tenant data isolation: each organization can only see its own products, shipments, and audit records.

RVC (Regional Value Content)

A method for determining CUSMA eligibility based on the percentage of a product's value originating in North America (Canada, US, or Mexico). Required RVC percentages vary by product category, typically 50-75%. Motor vehicles require 75%.

SOR (Statutory Order and Regulation)

The official identifier for Canadian regulations, including surtax orders. SOR numbers follow the format SOR/- and are published in the Canada Gazette Part II. TariffTrail references surtax orders by their SOR number.

Surtax

An additional tariff imposed on goods from specific countries by order-in-council under section 53 of the Customs Tariff. Assessed on top of the MFN duty rate as a percentage of the value for duty. Surtaxes are retaliatory or protective measures targeting goods from a specific country of origin.

Tariff Classification

The process of assigning the correct HS code to an imported product. Determines the duty rate, surtax applicability, and trade agreement eligibility. Incorrect classification can result in overpayment or underpayment of duty, AMPS penalties, and delays at the border.

Tariff Shift

A type of PSRO under CUSMA requiring the finished product to be classified under a different tariff heading (or chapter/subheading/item) than its non-originating input materials. Demonstrates that non-originating inputs underwent a substantial transformation in a CUSMA country.

TRQ (Tariff-Rate Quota)

A trade policy tool that applies a lower duty rate to imports up to a specified quantity (the quota), and a higher rate above that quantity. In the context of Canadian surtaxes, the steel and aluminum TRQ (SOR/2025-148) allows a certain volume of US-origin steel and aluminum to enter at a reduced rate, with the 25% surtax applying above the quota.