Importing goods into Canada?

In May 2021, the Canada'Border Services Agency (CBSA) introduced the first of two phases of a digital initiative that transforms the collection of duties and taxes for goods imported into Canada.

This initiative, called CBSA Assessment and Revenue Management (CARM), provides much-needed modernization to the reporting of customs information by importers, the payment of duties and taxes, and the availability of import information online via a self-service online portal, called the CARM Client Portal (CCP).

Phase 1 of CARM launched on May 25, 2021 and Phase 2 of CARM is being delayed until at least January 2023.' All importers—both Canadian residents and non-residents—are required to be registered on the CCP to import goods into Canada once CARM is fully implemented.

Here is a look at both stages:

Phase 1

As part of the first phase, importers can now:

• Create a profile on the CCP in preparation for Phase 2.
• Assign external designates, such as customs brokers and trade consultants like BDO, to assist with importing activities.
• Request customs rulings for tariff classification, origin, and valuation.
• Submit electronic payments.
• View statements of account.

Phase 2

Phase 2 of CARM includes a significant change that requires importers to post a security bond. It also enables importers and external designates to conduct the following activities on the CCP, in addition to the functions made available in Phase 1:

• Submit commercial account declarations which will replace the current B3.
• Receive daily payment notifications.
• Submit corrections and amendments online.
• Obtain a Business Number and import program account extension.
• Post and monitor security bond.

Is participation in CARM mandatory for importers?

Participation in CARM and registration on the CCP is compulsory for any importer of goods into Canada after the implementation of Phase 2. Failure to comply with the new requirements will result in the importer being prohibited from bringing goods into Canada until the CCP registration process has been completed and all requirements have been met, including the posting of an importer bond.

For companies that rely heavily on imported goods in their manufacturing processes or retail sales activities, this delay could negatively impact their bottom line if they cannot fill customer purchase orders on time. It may also accrue additional freight and storage costs.

How to prepare for Phase 2 of CARM

Those importing goods into Canada must be compliant with the new requirements to avoid negative consequences that can cost time and money. Before the implementation of Phase 2, you must:

1. Obtain an importer/exporter business number from the Canada Revenue Agency (CRA) if you do not already have one. Obtaining CRA business numbers can be challenging, especially for non-residents who often undergo a rigorous review by the CRA for security purposes.

2. Register on the CCP using a Government of Canada Key (GCKey) or Sign-In Partner information.

3. Delegate individuals in your company, customs brokers, or trade consultants who can conduct customs business on your behalf via the CCP.

4. Obtain an importer security bond. This is separate and distinct from the bond non-residents are required to obtain for Canadian Goods & Services Tax/Harmonized Sales Tax (GST/HST) purposes if registered for GST/HST.

How BDO can help you comply with the regulations

BDO Canada's Customs and International Trade Services team can guide your company through the changes that CARM brings, assist importers that encounter issues complying with the new requirements, and support ongoing reporting and compliance with the CBSA.