Process for valuing items for customs purposes at the Canadian border

Question

According to Canadian customs rules, a visitor to Canada must declare any gifts s/he brings in over $60 CAD in value, and may have to pay customs duties on these gifts.

Now, suppose a visitor (let's call her Jane) is bringing a gift that is clearly more expensive than $60, but it is very difficult to value (perhaps Jane got the item as a gift, or the item has been in Jane's family for a while, or it is hand-made/custom and there are no easily-comparable off-the-shelf items, etc). Let's say that Jane declares the item, but does not specify a value (the declaration form doesn't ask for it).

Also, let's say that at this point it's too close to the trip to get a professional assessment of the item's value.

I am hoping that someone can answer, ideally from personal experience: How will customs agents at the Canadian border assign a dollar value to the item? Is there any opportunity to "present your case" (Internet printouts of similar items on eBay, etc)? Is there an appeal process if there's disagreement over value?

Also, suppose Jane doesn't speak English, and it would be very difficult for her to deal with import duties on arrival (especially haggling over item valuation). Is it possible to temporarily leave the item at the airport, and make the case for the item's value later (e.g. in the presence of the gift's intended recipient who speaks English well)?

If it matters, the airport in question is Pearson International Airport in Toronto.

Answer 1

There are multiple methods that can by used by customs to determine the value of the goods being imported. There is a Valuation Page of CBSA that describes all the possible scenarios that can happen but the short list is:

1. Transaction value method - Section 48 of the Act
2. Transaction value of identical goods method - Section 49 of the Act
3. Transaction value of similar goods method - Section 50 of the Act
4. Deductive value method - Section 51 of the Act
5. Computed value method - Section 52 of the Act
6. Residual basis of appraisal method - Section 53 of the Act

Not going to bore the readers with details but unless you have a receipt for the purchase you are pretty much at the mercy of the customs officer unless the gift is a very common thing.

As far as clearing customs afterwards I would suggest mailing the gift as a parcel rather than bringing one with you if the customs hold is a concern. Otherwise I would suggest Jane finds someone on the flight who can speak the same language and ask for help clearing customs at Pearson.

Answer 2

First, being a gift is irrelevant. If you are bringing an item into Canada and it is staying in Canada, you declare it.

Second, if you recently bought it, determining the value is simple: look on the receipt, perform a currency conversion, and you're done.

Third, if you declare the item and, if asked, provide a reasonable value for it, that it probably an end to it. If you say it's $1000 you don't need to worry that someone will invest an hour of research proving it's actually $1010.

Where there's a real issue is when you don't declare you are bringing things in at all. From what I've seen on Border Security, internet searches seem to be the tool of choice here. If the item is a name brand (Gucci purse, Rolex watch) then the price of the exact item or something similar is easy enough to determine. If it's not (home-made art, antique, etc) then things could get random quickly.

The smartest thing to do is refrain from bringing something into another country that you intend to leave behind and yet do not know the value of at all. If you vaguely know the value, then provide that when asked and don't worry overly much that someone will try to prove you wrong. Just don't try to suggest that your $5000 watch is worth $85.

Answer 3

You are best to come up with a specific value and state that (or point to a card or something) when asked. Declaring the gift probably guarantees the traveler will be asked, so an honest and reasonable response should be prepared. This always happens to me as a resident when I check that box that says commercial items are with me (there's no minimum value so I almost always have to check it to be honest). They then ask what it is or what it's worth or what it is, usually cursorily, and I'm sent on my way, usually. Sometimes they randomly want to know more.

The agents are actually very experienced and will likely have a good idea of what the real value is, if they even care to look at it. Unless the person's language is rare, they they can probably get someone to help with communication.

What you would like to avoid, if possible, is a lengthy and stressful secondary inspection where all sorts of things could go wrong, especially if the traveler is stressed and has communication problems. Potential problems are more likely to be immigration related such as deemed intent to work without the proper visa (assuming the declaration was reasonable and complete).

If the gift does not appear to be worth more than a few hundred dollars, there will likely be no problem (ie no taxes), especially when it is clearly a gift and the person is coming from far away, as opposed to popping over the land border for a few hours.

If it's obviously worth $thousands or has some other problems (made of endangered spotted wombat hide or whatever) then I don't know what will happen. A semi-worst-case scenario would be being asked to pay HST (13%) on the assumed value of something that is admissible (or having it seized if it's not admissible). This is far more likely if it looks like the item might be for resale, and they are pretty good at figuring out if it's an artist delivering their work or whatever.

There is a separate customs system at the airport for commercial shipments, including a 'long room' where brokers (mostly) and the odd (definitely) person like me can clear shipments formally. It's possible for hand carried goods on an incoming flight to be moved to that system, and that might happen if the person requested a broker perform the clearance. It's quite unlikely to be more favorable than the treatment you'd get from the agent- and the clearance procedure is markedly more complex and geared for professionals. It's more likely to be because the value is high and goods are declared as commercial.

It's okay for there to be some range in possible value (provided it's not stupidly low like less than material costs) but whatever you do, don't coach the person to lie, that will really piss them off, and they could be refused entry, with or without a ban on future visits. They're really not out to collect every last penny of taxes from ordinary visitors to Canada- $60+ is where they want to know about it, not the threshold at which they will actually ask for taxes.

Answer 4

Not sure about Canada or Pearson in special, but for all I know, it is not possible to leave items at airport customs anywhere in the world, because there are no procedures in place to claim them afterwards. Once you are through customs, having paid all duties and taxes, you go through a "door of no return", so no possibility to return to the customs booth, and there is no procedure in place to store the item until the case is resolved, and deliver it to you or send it back to the country of origin.