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Ottawa loses millions on import duties

A significant volume of dairy, poultry, eggs and beef was imported into Canada without a permit or paying the appropriate customs duties, hurting both the federal treasury and farmers, says Auditor General Michael Ferguson in his spring report to Parliament.

Analyzing figures from Global Affairs Canada and the Canadian Border Services Agency found “authorizations, certificates, and permits for those items that were on the Import Control List… did not match the volumes authorized for importing annually with the volumes that importers declared to the agency as eligible for a lower rate of duty,” Ferguson said.

The report estimates that $168 million in duties were not collected on $131 million worth of chicken, turkey, beef, eggs, and dairy products, meaning that seven to eight per cent were therefore imported without the appropriate permits.

Dairy had the biggest hit with $81 million in unassessed customs duties and $32 million of product entering the country without permits. Chicken was next with $50 million in unassessed duties and $20 million in products without permits. For turkey the figures $15 million and $9 million, beef $11 million and $41 million and eggs $11 million and $29 million.

The finding reinforces complaints from farm groups about mislabelled imports.

Public Safety Minister Ralph Goodale, a former agriculture minister, said the CBSA was working “to deal with the import problems and is reviewing its processes for customs duties. The CBSA will also continue to enhance the monitoring of its risk controls for corruption to ensure they are working as expected.”

Ferguson said Global Affairs Canada and CBSA “should better enforce tariff-rate quotas by reviewing the process of verifying permits. It should also explore automated means to validate accounting declarations for quota-controlled goods to be charged customs duties at a lower rate.”

Both organizations agreed to take action and hope to have a solution by this September.

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