for the carbon tax are similar to those 
under the Motor Fuel Tax Act, with fuel 
sellers being required to pay security 
equal to the tax payable on the final retail 
sale and consumers being ultimately 
liable to pay the tax. For natural gas, the 
tax is collected at the time of sale to a 
person intending to consume or use the 
gas in British Columbia.

Customs Duties

Canada’s Customs Act defines duties 
to mean “any duties or taxes levied 
or imposed on imported goods under 
the Customs Tariff, the Excise Act, 
2001, the Excise Tax Act, the Special 
Import Measures Act or any other Act 
of Parliament.” Therefore, imported 
commercial goods are subject to both 
import duty and the GST.

Customs duty is assessed on the basis 
of the tariff classification of the imported 
goods and the corresponding duty 
rates set out in the Customs Tariff. The 
most favoured nation (MFN) rates apply 
unless the imported goods are eligible 
for preferential tariff treatment based on 
their country of origin. The MFN rates of 
duty usually range from free to 8% on 
machinery and equipment used in 
production.

The following summary highlights a few 
key areas relating to mining.

Machinery and Equipment

The federal government has 
implemented measures to eliminate 
tariffs on a wide range of manufacturing 
inputs, machinery, and equipment 
imported into Canada. The MFN rates 
of duty either have been reduced to 
free, or will be gradually reduced to 
free by January 1, 2015. 

There are various other provisions in 
the Customs Tariff that may also be 
considered if the imported goods attract 
customs duty. For example, there are 
special provisions that provide relief of 
customs duty on certain goods used in 
specific mining applications.

One of the priorities of the Canada 
Border Services Agency (CBSA) for 
2013 is to conduct tariff classification 
verifications for vehicles imported by 
mining companies under the provisions 
of tariff item 9908.00.00 of the Customs 
Tariff. Tariff item 9908.00.00 provides 
duty-free treatment for importations of 
certain vehicles and vehicle parts used 
in the mining industry. 

Ores and Concentrates

Importers of ores and concentrates 
should be aware of potential compliance 
risks relating to tariff classification 
and valuation. Declarations of tariff 
classification and customs value have 
been the subject of audits undertaken 

by the CBSA. For instance, ores are 
often composed of more than one 
mineralogical species (e.g., zinc ore with 
copper and lead content). As a result, 
it may be difficult to determine the 
correct tariff classification for customs 
declaration purposes.

With respect to customs valuation, ores 
and concentrates are often imported 
using provisional pricing and a final price 
may not be settled upon until sometime 
after importation. If the provisional 
price is used for customs declaration 
purposes, the declared value for duty 
may need to be adjusted. In such 
cases, it is important for the importer to 
apply an acceptable customs valuation 
methodology to ensure that the 
import value is correctly declared, and, 
where necessary, make the required 
adjustments. Customs declaration errors 
can result in assessment of additional 
duty, GST, punitive interest, and 
monetary penalties.

Temporary Importations

There are provisions that allow 
machinery and equipment to be 
imported free of customs duty if it 
is imported temporarily for use in 
Canada. To qualify for these provisions, 
the goods must be exported within 
a certain time frame and cannot be 
imported for sale, lease, on-lease (the 
imported goods can be leased to the 
importer but the importer cannot lease 
the goods to another party in Canada), 
further manufacturing, or processing 
(among other conditions). Full or partial 
relief from the GST may be available, 
depending on the specific goods being 
imported and their use while in Canada. 
If the goods do not attract duty upon full 
importation and no relief from the GST is 
available, there is no benefit to entering 
the goods under these provisions.

Table 14: Carbon Tax Rates, British Columbia, as at June 30, 2013

Type of Fuel

Rate

Gasoline

6.67 cents per litre

Diesel fuel

7.67 cents per litre

Natural gas

5.70 cents per cubic meter

Propane

4.62 cents per litre

Coal – high heat value

$53.31 per tonne

Coal – low heat value

$62.31 per tonne

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms 
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

 

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