Undervaluing your goods: CBSA advises to think again

With the strong Canadian dollar, the temptation to try and save on duties and taxes can lead some to flout the law, and falsely declare the value of goods they are bringing back home.

When it comes to clothing or household items or higher-value goods like jewellery, vehicles, ATVs, RVs and boats, and even animals such as purebred dogs and horses, some people feel that lying is worth the risk. What they don’t realize is that the small amount they are trying to save certainly isn’t worth the price they could pay in the end. If you are caught undervaluing something at the border, you are subject to stiff monetary penalties imposed by the Canada Border Services Agency (CBSA). On top of that, you have committed a criminal offence, and as such, you can be arrested and criminally charged, go to court, incur lawyer’s fees, receive a sentence of a fine or jail time, and have a lifetime criminal record. Not to mention the emotional implications to yourself, your family, and your reputation. This is not the way you want to end your business travel or vacation.

And these effects stretch far beyond the border crossing or airport. Even after crossing, your case can be referred to the CBSA’s Criminal Investigations Division for further investigation if you are suspected of committing an offence. The CBSA has the authority to execute search warrants to gather evidence that can result in arresting and charging individuals under the Customs Act. And a criminal conviction—no matter how big or small—can have a very negative impact on both your personal and professional life. From seeking employment, to buying a home, that record will follow you. Many also don’t realize that their record follows them internationally, and can prevent them from travelling to other countries.

Retailers can also play a role. Don’t be fooled by a retail dealer in another country offering to provide you with two receipts—if you pay them a higher sale price, some dealers will agree to provide a second receipt reflecting a lower price, so that you get charged less duties and taxes.

Many of the people caught undervaluing at the border are shocked to learn the severity of their penalties. And they are even more shocked to learn the real amount that they were trying so hard to evade paying. If you do not declare goods, or if you falsely declare them, the CBSA can seize the goods. This means that you may lose the goods permanently or that you may have to pay a penalty to get them back.

The CBSA reminds travellers to truthfully declare all purchases when returning to Canada and to be mindful of the following personal exemptions: after an absence of 24 hours, you may bring back $200 worth of goods duty- and tax-free; however, after a 24-hour absence, if the value of the goods you have purchased abroad exceeds $200, duty and taxes are applicable on the entire amount of the imported goods. After 48 hours, your personal exemption is $800. There are no personal exemptions for same-day purchases.

Here are some examples of where individuals were caught falsely declaring their goods.
A Canadian resident tried to evade tax on his imported motor home by reporting to the CBSA that he paid $25,000, when in truth, he paid $45,000. This attempt to save $3200 in taxes resulted in the seizure of the motor home, and CBSA penalties for its release, which totalled $11,600. Due to the severity of the offence, this person was also arrested and criminally charged, which resulted in a criminal conviction, a $2,000 court fine and a criminal record. In the end, the attempt to evade $3,200 resulted in actual costs of $13,655, plus legal fees.

Canadians frequently visit the United States to shop for deals. Last year, a family of three Canadian residents arrived at a port in New Brunswick after a week-long camping trip in the United States. Together, the family declared USD$1600 worth of goods purchased throughout the week on their trip. During the examination of the camper, CBSA officers found a bundle of receipts from the trip abroad totalling USD$4000.00 of clothing and linens. The goods were seized and released after a CBSA penalty was assessed to the goods for approximately CAD$715. If the family members had properly declared the goods, they would have owed approximately CAD$225—a difference of approximately $489.

So when it comes time to cross the border back into Canada with your goods, remember to truthfully declare all of your purchases. CBSA officers will apply any personal exemption limits to which you might be entitled, depending on the duration of your trip. If you are within your exemption limits, you will not have to pay any duty or taxes. And attempting to evade the relatively small amount you might owe for duty and taxes on non-exempt purchases is just not worth the price you could pay in the end. For more information on declaring your goods when returning to Canada, and applicable exemption limits, please refer to the I Declare brochure on the CBSA Web site.

Please note these figures are for illustrative purposes only and may vary; as rates can change and other factors can affect duties and taxes, such as the origin of goods. Always check prior to making purchases and returning with goods beyond exemptions. Also, when planning to import a motor vehicle into Canada please review all respective provincial and federal regulations; for more information please consult the Importing a Vehicle Into Canada page.

The CBSA encourages all travellers to visit the travel tips page to help you know what to expect when you arrive at the Canadian border.