Impact of Exchange Rate on Vehicle Imports into Canada

With the Canadian dollar hitting new 3 year highs against the U.S. dollar, vehicles continue to be imported into Canada.  A chart below showing vehicle imports as against the exchange rate.  The chart shows vehicle imports into Canada through the RIV program and the average annual exchange rate between the Canadian and American dollars as reported by the Bank of Canada between the years 1997 and 2010.

2012 New chenges in regulations to vehicles imported into the European Union from the United States, Canada, Mexico and other countries

Europe Passes New Regulation on IVA System
Europe FlagThe European Commission approved a regulation to amend the IVA system, which governs importation of vehicles imported into the European Union from the United States, Canada, Mexico and other countries (originally built to non-EU specifications).  The regulation was adopted on February 22, 2011 and will enter into force on February 26, 2012.  The regulation will be binding on imports into all EU member states. 

Canada to Allow Vehicle Imports from Mexico

Canada has passed legislation to allow vehicle imports from Mexico.  Bill S-5, An Act to amend the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999, received Royal Assent on March 23, 2011.  With the Canadian government moving towards an election and a halt to all new legislation, this Bill managed to get through the system. 
  
The Bill is part of Canada's obligation to put the North American Free Trade Agreement (NAFTA) into practice.  Canada has a system to administer importation of vehicles from the United States, which was introduced after the two countries entered into their own free trade agreement more than two decades ago.  When Mexico joined the agreement and NAFTA came into being, Canada had to pass additional legislation to allow imports from Mexico.    This law has now been passed.  The details still have to be worked out and it will be several years before vehicles can actually come into Canada from Mexico, but at least the governing legislation is now in place.  The legislation will become effective when regulations are passed by government.  The legislation will phase in imports from Mexico, first allowing older vehicles and then gradually allowing newer vehicles over the next decade.  

Before you import Car into Canada - Vehicle admissibility

Before you import

Before you import a vehicle from the United States, you should understand each step of the importing process, including:

Vehicle admissibility

Determine if the vehicle you would like to purchase can be imported into Canada.

Vehicle branding history

A brand is a record of a prior accident serious enough to result in an insurance write-off (salvage) or even non-repairable status. A brand remains part of the vehicle’s permanent history and may affect the ability to license the vehicle in Canada. The Registrar of Imported Vehicles (RIV) makes U.S. brands available to Canadian provinces and territories. You are strongly advised to verify the vehicle’s branding history through available commercial VIN search engines before you purchase any vehicle in the U.S. or attempt to import it into Canada.

Modification and inspection requirements

Some vehicles may require modifications in order to comply with Transport Canada Motor Vehicle Safety Standards. Determine what modifications your vehicle may require before you import it.

Recall clearance

Recall clearance is a requirement for all vehicles being imported into Canada. Find out what documentation is required and how to obtain the recall clearance letter for your vehicle.

RIV exemptions

Find out about specific exemption criteria and if they apply to your vehicle.

Cost considerations

Determine any possible duties, provincial and federal sales taxes, trip permits, temporary insurance and provincial licensing requirements before you import your vehicle.

Importer Checklist

Importing a vehicle

Importing a vehicle

If you are thinking about importing a vehicle from the United States, you should understand the following three main steps of the process:

1. Before you import

  • Before purchasing and importing a vehicle, find out about the Registrar of Imported Vehicles (RIV) program, vehicle admissibility, RIV exemptions, recall clearance documentation, vehicle modification requirements and vehicle branding history.

2. At the border

  • Understand your obligations for reporting to U.S. Customs, Canada Border Services Agency (CBSA) and registration into the RIV program.

3. After vehicle entry

  • Complete vehicle modifications, the RIV inspection process and contact your provincial/territorial licensing jurisdictions for information about licensing your vehicle.

DECLARATION TO IMPORT MOTOR VEHICLE KIT PARTS

Attached PDF form.http://www.tc.gc.ca/media/documents/roadsafety/Declaration_of_the_car_parts_importer.pdf

Questions about importing Kit car into Canada

Frequently asked questions for Kit Cars

Q. 1. How does Customs define a starter-kit?
A. The Canada Border Services Agency (Customs) officers will define a starter kit as parts if it contains only a bare frame and a body shell, with no mechanical parts. If CBSA officers see mechanical parts, they will ask Transport Canada to decide if the kit is a car or parts, and if it can enter Canada.
Q. 2. Why did Transport Canada develop a system for importing parts for hobby built cars?
A. The main reason was to help Canadians who build their own cars as a hobby. Since1995, Transport Canada allows them to import a shipment of parts that does not fall under the Motor Vehicle Safety Act. They can then get the rest of the materials needed to complete the car, from Canadian sources. The finished car will fall under provincial laws.
Q. 3. Who decides what parts can be imported?
A. The system was developed over time, with input from enforcement officers, standards developers, engineers, legal counsels, the kit car industry, specialty vehicle associations, etc. A regulations enforcement officer decides, on a case-by-case basis, using the Motor Vehicle Safety Act as a guide.
Q. 4. If cars are regulated and parts are not, why must TC monitor kit imports?
A. Over the years, Transport Canada's Road Safety Directorate has become aware that there is a real difference between:
  • Importing a kit car that requires only some assembly and maybe adding a power train and some easy to attach parts, and
  • Importing some body parts, to build a homemade car.
This is why Transport Canada, together with Canada Border Services Agency (Customs), developed a system for importing parts for hobby builders. The system draws the line between a car and a parts shipment.
Q. 5. How fair is the system that decides if a kit shipment is a car or parts?
A. Building a homemade car usually requires a starter kit, which includes a detached body and frame. It may also include some parts that are unique to the body's vintage look. Since not all starter kits are the same, the system sets the criteria as standard as possible, while flexible enough to allow hobby builders to be original and creative.
Q. 6. Why not have a simple rule, like 51% hobby builder supplied parts and 49% kit manufacturer supplied parts?
A. Transport Canada's Road Safety Directorate decided that there are too many variables in determining the percentage of fabrication, such as weight of parts, number of parts, cost of parts, labour hours, etc.
Q. 7. Isn't it safer to have more parts in the kit that specifically fit the kit?
A. Yes. That is why a full kit fits the definition of a passenger class vehicle and must be designed and engineered to meet Canadian Motor Vehicle Safety Standards.
Q. 8. How can Canadian companies sell kit cars in Canada?
A. Many companies that make kit cars or reproduction cars in Canada sell them outside of Canada. They also avoid Canada's Motor Vehicle Safety Act by selling these cars or kits without a national safety mark, within provincial boundaries, where Transport Canada does not have jurisdiction.
Q. 9. How can a reproduction car which represents a vintage car be certified to modern safety standards?
A. Applying federal standards to a kit car will not necessarily change its authentic appearance or its performance. A company's ability to certify its kits depends on its technical and engineering expertise, which can also result in a better, safer, product for hobby builders.
Q. 10. Kit car companies claim to have engineers on staff. Doesn't that mean the vehicles are safe?
A. No. Transport Canada knows that the kit car industry in North America often does not comply with the law or best engineering practices.
Q. 11. The system requires a car kit (starter kit) hobbyist to get parts to complete the car in Canada. Is it legal to buy parts in Canada that have been imported, such as parts from a dealer's parts counter?
A. A hobby builder may NOT import, or have a third party import the parts needed to complete the car. These parts must be bought from a source in Canada not linked to the kit manufacturer.
Q. 12. Why are kit cars freely sold in the United States?
A. People and companies find "loopholes" in American law, and sell uncertified cars. However, anyone who installs the power train in an uncertified kit car in the United States can be charged with breaking the law. To learn more, please contact the National Highway Traffic Safety Administration in Washington, DC.
Q. 13. What if certain parts of the "prohibited" systems cannot be sourced in Canada, but are absolutely essential to the uniqueness of the kit?
A. Transport Canada believes that if a kit is really designed, and is actually being used, as a starter kit to amateur build a car in Canada, such parts would not be absolutely essential.
However, some kits are very basic. They may only contain a bare body shell with a windshield, some door hinges and latches, and a bare frame. In these very basic kits that are far from the definition of "vehicle" there may sometimes be room for such items as a particular suspension piece or a fuel cell.
Q. 14. What can a hobby builder do when parts that can be sourced only from the kit manufacturer are missing from the shipment?
A. Contact Transport Canada's (TC) Road Safety Directorate. Getting a second shipment of a missing part is not the same thing as illegally bringing in extra parts that were not on the original list reviewed by TC.
Q. 15. What can happen to someone who imports more parts in addition to a kit list that has already cleared Customs?
A. This is against the law. To learn about penalties, see "offences and punishments" in section 17 of the Motor Vehicle Safety Act.
Q. 16. May a kit made up of a frame with steering system, fuel cells, brake system, some wiring, suspension system including hubs, and a steering column with a key lock system, but without the body, be imported as parts?
A. No, not likely. Most kits are designed to accommodate a particular body, body parts and power train. Such a kit would be considered to be a "vehicle" as defined in the Canada Motor Vehicle Safety Act. It would have to be certified.
Q. 17. Is it possible under the present system to import kits on a commercial level to sell them in Canada?
A. No. The current system exists solely to help hobby builders to build their own car at home, not to provide a business opportunity.
Q. 18. Can a kit be imported or sold in Canada where the body and frame are assembled at the factory by brazing, welding or riveting?
A. If permanently attached body panels are part of the load bearing structure together with the frame members, and the body is shipped with seats, interior, lamps or wiring harness, not installed, and without the systems mentioned earlier in these guidelines, Customs will most likely clear the shipment as a parts.
Q. 19. Does TC recognize any of the SVA testing conducted by the UK Department of Transport for these kit vehicles?
A. If a replicar or a kit car complies with only those Canadian Motor Vehicle Safety Standards (CMVSS) listed in the Single Vehicle Approval Testing (SVA) manual, it CANNOT be imported into Canada, unless:
  • the vehicle also complies with those CMVSS that are not listed in the SVA;
  • the manufacturer certifies the vehicle to all Canadian federal standards that apply; and
  • the manufacturer has all the required test records to demonstrate compliance.
If the kit is considered a parts shipment, it is not required to meet the SVA or the CMVSS.
Q 20. Why do kit cars generally NOT clear Customs?
A. Transport Canada knows that the kit car industry does not comply with North American federal safety standards. For example, according to the United States National Highway Traffic Safety Administration, there are over 200 kit car manufacturers in North America, and not one complies with federal standards.
Note: If you still have questions, please contact a Motor Vehicle Regulations Enforcement Officer:
  • by letter at Transport Canada, ASFAB/A, Ottawa, Ontario K1A 0N5 or
  • by Fax at 613-998-8541.

Importing KIT CARS into CANADA

"Kit Cars" in Canada

Fact Sheet TP 2436E
Road Safety and Motor Vehicle
Regulation Directorate


Are you a hobby builder who plans to:

  • manufacture kit cars or reproduction vehicles in Canada for the purpose of sale;
  • import kit cars or reproduction vehicles into Canada;
  • amateur build a kit car in Canada using an imported starter kit; or
  • amateur build a kit car in Canada using a Canadian starter kit?
If you are, it is important that you know and obey Canada's Motor Vehicle Safety Act (the Act).
The Act requires that vehicles made in Canada for the purpose of interprovincial sale, or imported into Canada, be certified to federal safety standards by their original manufacturer. Since most kit cars meet Transport Canada's definition of a "passenger car", they must meet the safety standards for that class.

Manufacturing kit cars in Canada

Manufacturers must design, build, test and certify their products to meet all Canadian Motor Vehicle Safety Standards (CMVSS), according to approved test methods and keep records of the results.
Before starting a vehicle manufacturing business in Canada, you must show Transport Canada's Road Safety Directorate that your prototype vehicles, as tested, meet all federal safety standards (Section 5(1)(g) of the Act). Section 5 of the Act applies whether the vehicles are shipped already assembled or in pieces for the buyer to assemble.
You must prove that you followed approved test methods and place all required information on the vehicle. When satisfied, Transport Canada (TC) will give you authority to place the national safety mark on your products.

Importing kit cars into Canada

If you want to import a kit car or a reproduction vehicle that can be driven, you must provide proof that it meets all passenger car class CMVSS before importing it. There is no difference, under the Act, between assembled and disassembled vehicles. Note: Most kit cars do NOT qualify. Therefore, kit cars cannot be manufactured to sell in Canada or imported into Canada.

Amateur building of kit cars from imported starter kits

Is a starter kit a car or parts? Shipment contents provide useful clues, and each import is considered on its own merits. TC may ask for a complete parts list (not including attachment hardware).
In a parts shipment/starter kit, important systems such as the fuel system, the brake system, the power train and the suspension system are not included.
When these systems are completely absent, the kit will likely pass Customs if:
  • the kit is not assembled (the body and frame are separate);
  • the wiring harness, steering system and interior parts are not installed (with the possible exception of the windshield, some trim and the instrument panel).

Importing a starter kit

TC suggests that you research and visit the company that is manufacturing your kit and make sure that the kit will clear Customs before you make any payments.
If you plan to build your own car using an imported starter kit, you can make clearing Customs easier if you:
  1. Have the manufacturer fax send you an exact packing list of the parts that will be in the container when it reaches Canada Border Services Agency (CBSA) and fax it to TC before you buy the kit.
     
  2. Make sure the list:
    • has a number on each page that will correspond with the import documents;
    • has the manufacturer's name in the letterhead; and
    • exactly matches the packing list supplied with the shipment and the parts that will be in it.
       
    Since you are importing parts only, you will need a detailed list of every part, as you would get from any parts counter, including part numbers (except nuts, bolts, washers, clips, fasteners, etc., which can be listed together). TC will not accept a list of parts that are deleted from a kit.

    Note: Importing a kit from a private sale can pose a problem, but TC will review the parts list without part numbers and determine each case on its own merits.
     
  3. Fill out and sign the declaration form you will find at the end of this document and fax it and the parts list to 613-998-8541.

    If TC considers that the parts on the list do NOT add up to a motor vehicle that can be certified, you will receive a form letter to present to CBSA. The letter will state that the shipment is admissible as "parts only" and that no other shipments may follow.

Amateur building kit car from Canadian starter kits

It is likely against the law for a Canadian kit car manufacturer to sell kits with too many parts, such as the important systems listed earlier.

Important Notes:

  • It is against the law (sections 5 (1) and 6 of the Act) to import a vehicle or sell a new vehicle in Canada that does not meet CMVSS. Importing such a vehicle in different shipments is a violation punishable under section 17 of the Act.
     
  • This document has been prepared as a helpful reference. It has no legal force or effect. To interpret and apply the law, consult the Motor Vehicle Safety Act S.C. 1993, c.16, and the Motor Vehicle Safety Regulations at http://www.tc.gc.ca/.