Valuation of Exports and Imports

Statistics Canada describes the valuation of exports and imports as follows:

"For Customs purposes, imports are recorded at values established according to the provisions of the Customs Act, which, since January 1st, 1985, reflects valuation methods based on the General Agreement on Tariffs and Trade (GATT) Valuation Code System. It generally requires the value for duty of imported goods be equivalent to the transaction value or the price actually paid.

"To determine the transaction value of imported goods, all transportation and associated costs arising in respect of the goods being appraised prior to and at the place of direct shipment to Canada, are to be added to the price of the goods. Therefore, Canadian imports are valued F.O.B. (Free on Board), place of direct shipment to Canada. It excludes freight and insurance costs in bringing the goods to Canada from the point of direct shipment.

"To countries other than the United States, exports are, in principal, valued or recorded at the values declared on export documents which usually reflect the transaction value, i.e., actual selling price, or in the case of a non-arm's length transaction, the transfer price used for company accounting purposes. Canadian exports to overseas countries are valued at F.O.B. port of exit, including domestic freight charges to that point but net of discounts and allowances. As of January, 1990, Canadian exports to the U.S. are valued F.O.B. point of exit from Canada. Prior to 1990, they were valued F.O.B. place of lading net of freight charges, discounts and allowances."

Note that Canada and the United States have a data sharing agreement in which import data from the U.S. are used to determine Canadian exports to the U.S., and similarly, Canadian import data are used to determine American exports to Canada. The reason for this practice is that, generally, import data are of better quality than export data, since imports are more closely scrutinized.