Making use of a Canadian customs broker’s services to help you with import and export can be a great relief: instead of having to handle all the customs paperwork yourself, you can rely on someone to guide you through the international transactions processes.

But when the broker sends you an invoice, it could become a whole different story. Suddenly, you have fees you don’t understand– the expected cost of the broker’s services is not the same as the actual cost billed to you. Therefore, when you’re choosing a customs broker, it is important that your broker explain to you all the costs you will be paying in the end so you can be sure that you will pay the amount you were expecting.

At W2C, we know that understanding the charges your customs broker may bill you is essential for your business cost analysis, so in this article we will help you understand the nature of the costs you will find on a typical Canadian customs broker’s invoice.

What are the costs typically found on a customs broker’s invoice?

Let’s start by listing the services a Canadian customs broker will typically bill you for. The cost of the broker’s services will typically be a sum of these costs.

• First, you have the cost of the actual customs brokerage services. The broker charges you this cost for the customs declaration as well as the clearance of your goods.
• Second are the importation fees: customs duties and taxes (GST) you need to pay for any products crossing the border in accordance with their HS (Harmonized System) codes. Depending on the arrangements you have with your customs broker, they may pay these duties and taxes to the Canada Border Service Agency (CBSA) in your name.

Aside from these costs, a broker may also bill you new services during the importation process, which were not included in the initial cost of the services you bought. This could be done for the following reasons:

• If the products you are importing have different countries of origin or different HS codes, the broker may need to add new lines to your B3 customs form. These additional lines are billable, so your broker should tell you the number of lines they fill in for free and the fees for additional lines over this limit.
• You want your broker to produce a commercial invoice for customs that follows the World Customs Organization’s standards. This requires additional work on the broker’s part.
• For efficiency’s sake, you want your broker to pay service providers in your name for your goods’ transport, storage and handling. Brokers may bill you “disbursement charges” for the additional management work they have to carry out with the service provider in question.
• The goods you’re importing may require the broker to obtain special authorizations from other government agencies. For instance, the broker may need the Canadian Food Inspection Agency’s approval to import your cheeses into the country. The broker will bill you “other government department” (OGD) fees for these procedures.
• You are importing products subjected to anti-dumping regulations, which may require additional fees payable to the CBSA.
• Your goods are held at the border and inspectors ask for a paper version of your importation documents. Sending these documents will require additional fees. However, this situation rarely occurs nowadays.

These additional fees can increase the final cost beyond the initial cost set by your broker, depending on your requests and the complexity of your project.

What are the extra fees that may not be included in the brokerage’s cost?

The additional fees listed below may not be included in the initial cost of the brokerage services depending on the custom broker you are dealing with. Understand that some broker may separately bill you for certain operations. These extra fees increase your total invoice amount.

• Some brokers may charge you for fax messages sent to the CBSA. These charges are not included in the initial brokerage price.
• They may also charge you for the sending of your declaration to the customs’ EDI system, this amount is not included in the initial price either.
• They may also ask you to pay for the customs release, which is not included in the initial price.
• Finally, brokers may charge you “processing fees” or “transaction fees”, a catch-all for anything not included in the brokerage price.

What extra fees may not be necessary?

If you find the following fees on your customs broker’s invoice, you might want to carefully follow up on them, as they are unnecessary in most scenarios.

• If your invoice includes a “bond fee” or a “security fee”, we recommend you speak to your broker about that. Such fees are not required by the CBSA.
• Your broker may ask you to pay “outport fees” for a customs clearance in a different province from the one where the broker is located. Most of the time, you should not be charged for this.

To sum it all up:

When comparing customs brokers to choose the best one for your business, it is advisable to compare the fees each broker charges. It is best to settle once and for all what is included in the initial brokerage cost to avoid surprises later. You should also keep in mind that beside the brokerage cost, other costs may come up down the line, depending on the complexity of your project. Nevertheless, if some fees leave you perplexed, you can and should either ask your broker about them or even ask another broker for a second opinion. The W2C team is always available to answer your questions.