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Brexit: Information for Canadian companies

Important notice

This information is not intended to serve as legal or professional advice. Firms should obtain appropriate professional advice relevant to their particular circumstances.

Key information for Canadian companies:

What is Brexit?

Brexit, short for “British exit,” is the term used to refer to the United Kingdom’s decision to leave the European Union. The U.K. left the EU on January 31, 2020, but continued to abide by EU rules under a transition period, which concluded on December 31, 2020. As of January 1, 2021, the U.K. and EU entered into a new trading relationship based upon a Trade and Cooperation Agreement.

What does this mean for Canada?

As the U.K. is no longer part of the EU, the Canada-U.K. trade relationship is no longer governed by the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). 

On December 9, 2020, the Government of Canada introduced Bill C-18, an Act to Implement the Trade Continuity Agreement between Canada and the United Kingdom of Great Britain and Northern Ireland (Canada-U.K. Trade Continuity Agreement, or Canada-UK TCA) in the House of Commons.

Once ratified, the Canada-UK TCA will provide continuity, predictability and stability for trade between Canada and the United Kingdom. It preserves the main benefits of CETA and Canada’s competitive advantage in the U.K. market. This includes the elimination of tariffs on 98% of products exported to the U.K.

Canada and the U.K. have put in place temporary measures that ensure continued preferential tariff treatment for goods shipped between Canada and the United Kingdom until the Canada-UK TCA is ratified and implemented.

Learn more about the Canada-UK TCA.

CETA continues to govern Canada-EU trade and will be unchanged by the Canada-UK TCA.

What does this mean for U.K.-EU trade?

Brexit has resulted in changes to the U.K.-EU trading relationship and how goods traverse the U.K.-EU border as the U.K. is no longer part of the EU single market, customs union and free trade area.

From January 1, 2021, U.K.-EU trade has been determined by each party’s international commitments as well as the U.K.-EU Trade and Cooperation Agreement.

Goods traded between the U.K. and the EU are subject to the requirements normally imposed on goods from third countries along with checks prior to importation for compliance with these requirements. Examples include:

  • customs
  • value-added tax
  • sanitary and phytosanitary measures

Advice for Canadian firms

Canadian businesses should consider how the new U.K.-EU relationship affects them and take the appropriate steps to mitigate risks.

It would also be prudent to consider whether to acquire legal advice and/or engage a migration agent, customs broker, freight forwarder or logistics provider.

Some important aspects to consider

  • What are current door-to-door shipping times? How much would any additional transit time or delays cost your business?
  • How do you get your goods to the U.K. and the rest of the EU? Does your freight forwarder have the necessary paperwork?
  • Do you ship across U.K.-EU borders? If so, are the appropriate methods and procedures in place to manage any new duties, taxes, customs declarations, transit times or inspections?
  • Have you assessed the changes to intellectual property, licensing and regulatory authorities?
  • Is your labelling correct for the market in which you are selling the good?
  • Where are your product components sourced? Are your partners and key third parties operating as usual?

Contact a Trade Commissioner in the U.K. or the EU

Canadian companies looking for more information, including on how to expand their activities in the U.K., should contact the Canadian Trade Commissioner Service in the U.K.

Canadian companies looking for more information on the EU, including on how to expand their activities there, should contact the Trade Commissioner Service to receive assistance from one of our 24 offices in the EU.

Resources for business

Contact Export Development Canada to learn how it can help you manage risk, secure financing or access working capital so you can grow your business with confidence.

Additional resources

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