CARM is a Canada Border Services Agency multi-year project to simplify and modernize their accounting and data management systems to provide the commercial trade community with a streamlined method of interaction with the CBSA. This new CBSA initiative will affect all importers.
Join us on May 13 for our CARM info session where we will ensure you have everything you need to know as we move through the implementation process together:
Key dates
How to prepare for Release 1 on May 25, 2021
Changes to import bonds
Panelists:
Dave Pentland, Carson International Lisa Hennessy, Vice President, Avalon Risk Management
Webinar Details:
Getting Ready for CARM Thursday, May 13, 2021 Time: 11:00 a.m. – 12:00 p.m. PST
The Canadian government has released its first federal budget in more than two years, as it aims to pull Canada through the COVID-19 pandemic and repair economic ruptures.
The budget focuses on three core areas:
Ongoing Pandemic Support
Job Growth and Business Recovery
Green Transition, Green Jobs, Social Infrastructure
Here are a few key areas that are of notable interest to the trade industry.
Improving Duty and Tax Collection on Imported Goods
Budget 2021 proposes changes to the Customs Act to improve duty and tax collection. These changes would ensure that goods are valued in a fair and consistent manner by all importers. This would level the playing field between domestic and foreign businesses and generate an estimated $150 million in additional annual duty revenues. The changes would also modernize and digitize the duty and tax payment process for commercial importers, so as to minimize administrative burden.
Strengthening Canada’s Trade Remedy System
Budget 2021 announces the government’s intention to launch public consultations on measures to strengthen Canada’s trade remedy system and to improve access for workers and small and medium-sized enterprises. This may result in proposed amendments to the Special Import Measures Act and the Canadian International Trade Tribunal Act.
Administration of Trade Controls
Budget 2021 proposes to provide $38.2 million over five years, starting in 2021–22, and $7.9 million per year ongoing, to Global Affairs Canada, as additional resourcing to support Canada’s trade controls regime.
Better Supports for Exporters
Budget 2021 announces the government’s intention to work with Export Development Canada to enhance supports to small and medium-sized exporters and to strengthen human rights considerations in export supports. The government may propose amendments to the Export Development Act.
Border Carbon Adjustments
The government intends to launch a consultation process on border carbon adjustments in the coming weeks. This consultation process will begin in the summer with targeted discussions, including with provinces and territories, importers, and exporters—especially those who deal in emissions-intensive goods. The broader public will be engaged this fall. Throughout this process, the government intends to continue its international engagement with like-minded partners.
Application of GST/HST to Ecommerce (non resident importers, fulfillment centres)
The government proposed that distribution platform operators be required to register under the normal GST/HST rules and to collect and remit GST/HST in respect of sales of goods shipped from a fulfillment warehouse or another place in Canada, when those sales are made by non-registered vendors through distribution platforms. Non-resident vendors that make sales on their own (i.e., not made through a distribution platform) would also be required to register under the normal GST/HST rules and to collect and remit GST/HST in respect of sales of goods shipped from a fulfillment warehouse or another place in Canada.
Excise Tax Collection on Tobacco and Vaping Products
Budget 2021 announces the federal government’s intention to introduce a “new taxation framework” to impose excise duties on vaping products that would start in 2022 if the budget is passed.
Industry Reactions
Several Canadian industries have shared their reaction to Budget 2021.
Wine Growers of BC have called the budget a “monumental investment”, since the federal government has proposed to spend $101 million over two years, starting in 2022, to help wineries adapt to ongoing and emerging challenges. Specifically, Wine Growers British Columbia supports the request from Wine Growers Canada that the government implement the Wine Grower Quality Enhancement Program.
The Dairy Processors Association of Canada welcomes measures announced in the 2021 Federal Budget to support dairy processors impacted by recent trade agreements as a step in the right direction. Compensation measures totalling $292 million for two agreements, CETA and CPTPP, will support processors under supply management as the industries transition to the new market realities created by the agreements.
The Canadian Steel Producers Association is thankful to the government for its efforts in the fight against COVID-19, while also acknowledging that “CSPA members are ready to work on the priorities outlined in today’s budget to strengthen Canada’s resiliency and to build a greener and more innovative economy. While we produce some of the greenest steel in the world, we need partnerships and financial support to achieve our goal of net zero emissions by 2050. Today’s announcement of additional funding to the Net Zero Accelerator, together with new tax measures to support the adoption of innovative technologies such as carbon capture utilization/storage and hydrogen, will provide a strong foundation for this transformational agenda.”
Defence contractors are wary of the government’s resurrection of the so-called “economic harm” warning, which threatens to penalize companies that try to do economic harm to Canada.
Three years ago, the government laid down a marker that became known informally in procurement circles as the “Boeing clause.” Under the sub-headline of “Ensuring Procurement Partners Respect Canada’s Economic Interests,” the policy was reanimated and restated in Monday’s fiscal plan, much to observers’ surprise.
“In December 2017, the government announced that the evaluation of bids for the competition to replace Canada’s fighter aircraft would include an assessment of bidders’ impact on Canada’s economic interests, and that any bidder that had harmed Canada’s economic interests would be disadvantaged,” said the budget. Budget 2021 confirms the government will apply this policy to major military and Coast Guard procurements going forward.”
We will continue to provide updates as to how the 2021 Federal budget will impact trade and our valued clients and partners.
U.S. Trade Representative Katherine Tai on Thursday laid out her vision for using trade policy to protect the planet and combat climate change, and said the United States must be a leader in preventing a catastrophic environmental chain reaction.
President Joe Biden’s top trade negotiator said U.S. climate protection efforts should not lead to the export of polluting industries to countries with lower standards, and comprehensive, global action was the only solution to meet such challenges.
In a wide-ranging speech at the Center for American Progress, Tai said the World Trade Organization needed new rules to address the current corporate incentives that had resulted in a “race to the bottom” that put countries with higher environmental standards at a competitive disadvantage.
“The science indicates that, the window of opportunity to prevent a catastrophic environmental chain reaction on our planet is closing fast. And the United States must be a leader in the collective effort to work toward a global solution,” Tai said.
Katherine C. Tai addresses the Senate Finance committee hearings to examine her nomination to be United States Trade Representative, with the rank of ambassador, in Washington, DC February 25, 2021. Bill O’Leary/Pool via REUTERS/File Photo
U.S. Trade Representative Katherine Tai on Thursday laid out her vision for using trade policy to protect the planet and combat climate change, and said the United States must be a leader in preventing a catastrophic environmental chain reaction.
President Joe Biden’s top trade negotiator said U.S. climate protection efforts should not lead to the export of polluting industries to countries with lower standards, and comprehensive, global action was the only solution to meet such challenges.
In a wide-ranging speech at the Center for American Progress, Tai said the World Trade Organization needed new rules to address the current corporate incentives that had resulted in a “race to the bottom” that put countries with higher environmental standards at a competitive disadvantage.
“The science indicates that, the window of opportunity to prevent a catastrophic environmental chain reaction on our planet is closing fast. And the United States must be a leader in the collective effort to work toward a global solution,” Tai said.
Tai’s speech comes a week before Biden convenes world leaders for a summit on climate change, and signals a shift to more aggressive efforts by Washington to promote energy-efficient and low-emissions technologies.
She highlighted the need to develop environmental technologies, goods and services, as well as strategic supply chains to ensure the transition away from fossil fuels.
That would require pushing for bold reforms that ensured clean energy use throughout the supply chain, she said. New global agreements to end illegal logging and address overfishing were also needed, she said.
Tai also vowed to rigorously enforce a new U.S.-Mexico-Canada trade agreement that took effect in July, saying it contained the most comprehensive environmental standards of any U.S. or global trade accord, although she acknowledged that its failure to explicitly acknowledge climate change was a “glaring omission”.
With no definitive resolution to labour dispute issues at the Port of Montreal, a climate of uncertainty is causing the shipping industry to divert vessels to provide a minimum of reliability despite the added delays and costs, according to Martin Imbleau, President and CEO of the Montreal Port Authority.
The potential for escalation will increase the diversions, causing the port to results that pale in comparison with those of its competitors on the U.S. East Coast, who are enjoying significant growth. The tense situation of labour relations at the port significantly affects the reliability of port operations. The reduced scope of scheduled work will generate delays and additional costs for clients.
The labour dispute, which has lasted more than two years, largely revolves around work schedules according to the Longshoremen’s union representative, Michel Murray. At a press conference on Monday, he told reporters that employees want a schedule that better reflects the work and family life balance.
The Port of Montreal handles more than $275 million a day of merchandise. But volume dropped by 11% in March, and its capacity could be reduced to 30%, according to Imbleau.
“I don’t want to be dramatic but it’s delays, costs and further uncertainty which brings additional delays and costs. So basically, it’s the food chain in general that’s being affected.”
Martin Imbleau, President and CEO of the Montreal Port Authority
Presently, the employees are refusing to work on weekends as well as work overtime. A strike has not yet been called, but many in the industry feel is imminent.
Montreal business leaders are now calling on the federal government to intervene, demanding back-to-work legislation be adopted.
Carson clients are encouraged to reach out early to schedule shipments, as we navigate the uncertainty at the Port. We will continue to monitor the port labour situation daily and share our findings as the situation evolves.
We were pleased to partner with BC Apparel and Gear to discuss how to increase your ecommerce sales into the United States from Canada.
Are you an SME looking to increase your ecommerce sales into the United States from Canada?
On April 8, we discussed Section 321 of the U.S. Customs Act that allows exporters to ship on a daily basis individual orders duty, tax and processing-free to U.S. Customers.
Importers are locking in container shipping rates that are as much as 50% higher than a year ago to avoid the volatile and even steeper prices in the spot market, tightening the squeeze on margins and heightening concerns about inflation across the world economy.
Contract rates for Asia to North American routes in recent weeks are coming in around $2,500 to $3,000 for a 40-foot container — 25% to 50% higher than a year ago, according to George Griffiths, an editor on the global container freight-pricing team at S&P Global Platts.
Container rates may stay elevated through the second quarter and maybe into the third, Hapag-Lloyd CEO Rolf Habben Jansen said last week. Capacity is still stretched and “I don’t see any signs around the corner than demand is falling off a cliff,” he said.
Carson International is pleased to partner with Miller Thomson LLP for another instalment in our webinar series addressing Canada/U.S. cross-border trade developments and updates.
Join us in conversation regarding customs valuation methods in order to optimize duty and tax minimization strategies, and reduce customs valuation regulatory risk.
Topics:
Canada and the U.S. are member countries of the WTO’s Customs Valuation Agreement (CVA). What are the similarities and differences with respect to applying provisions?
Customs valuation is a verification priority for customs authorities worldwide. What are the issues and concerns that are of interest?
How can you employ duty minimization strategies through the use of different customs valuation methodologies?
Panelists:
Dave Pentland, Carson International Dan Kiselbach, Miller Thomson LLP
Webinar Details:
Customs Valuation: What Could Go Wrong? Thursday, April 22, 2021 Time: 11:00 a.m. – 12:00 p.m. PST
Webinar connection details will be provided by Miller Thomson before the webinar.
The Department of Commerce’s Bureau of Industry and Security has added seven Chinese supercomputing entities to the Entity List for conducting activities that are contrary to the national security or foreign policy interests of the United States.
The final rule adds the following entities to the Entity List: Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi, and the National Supercomputing Center Zhengzhou. These entities are involved with building supercomputers used by China’s military actors, its destabilizing military modernization efforts, and/or weapons of mass destruction programs.
U.S. Secretary of Commerce Gina M. Raimondo released the following statement:
“Supercomputing capabilities are vital for the development of many – perhaps almost all – modern weapons and national security systems, such as nuclear weapons and hypersonic weapons. The Department of Commerce will use the full extent of its authorities to prevent China from leveraging U.S. technologies to support these destabilizing military modernization efforts.”
These entities meet the criteria for inclusion on the Entity List listed under Section 744.11 of the Export Administration Regulations.
The Entity List is a tool utilized by BIS to restrict the export, re-export, and in-country transfer of items subject to the EAR to persons (individuals, organizations, companies) reasonably believed to be involved, have been involved, or pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. Additional license requirements apply to exports, re-exports, and in-country transfers of items subject to the EAR to listed entities, and the availability of most license exceptions is limited.
Police officers and and border officers have seized nearly $8 million worth of opium from shipping containers at the Port of Vancouver. Prior to the seizure, police swapped out the opium from the two containers before tracking decoy shipment to its destination where they arrested five suspects.
Authorities disclosed the operation on Monday, more than six weeks after the February 11th opium bust at Vancouver’s Deltaport — the largest container terminal in Canada. There, officers from the Royal Canadian Mounted Police Federal Serious and Organized Crime unit and Canada Border Services Agency served a warrant on two shipping containers that had arrived from overseas.
Officers found 2,500 packages of suspected opium weighing a combined 2,204 pounds, the RCMP and CBSA said in statements. The CA$10 million ($7.9 million) bust represented one of the largest opium seizures recorded by the CBSA.
Officers seized the drugs and replaced it with a placebo to allow the probe to continue “without further risk to Canadians.”
With the opium swapped out, officers followed the shipment as it was transported to a warehouse in nearby Surrey, British Columbia.
The Office of the United States Trade Representative has issued lists of products from six countries that may be subject to additional 25 percent tariffs. The proposed product lists identified by USTR are designed to offset digital services taxes imposed by Austria, India, Italy, Spain, Turkey and the United Kingdom, and that USTR has determined violate Section 301 of the Trade Act of 1974.
The initial Section 301 action was brought against 10 countries, however, USTR also announced it was formally terminating cases against Brazil, the Czech Republic, the European Union and Indonesia because these countries had not implemented or adopted any digital service taxes.
USTR’s announcement did not address a separate Section 301 digital services action brought against France, covering $1.3 billion worth of French goods that was suspended by the previous administration.
For the cases going forward, each of USTR’s notices requests comments and information from parties on whether action is appropriate, and if so, the appropriate action to be taken.
USTR will hold a hearing regarding the proposed remedy for each of the six subject countries, as well as a “multi-jurisdictional” hearing for issues that concern more than one country. Requests to appear at each hearing (including a summary of the testimony to be given) must be submitted to USTR by April 21, 2021, and written submissions must be submitted by April 30, 2021.
Among the products identified on USTR’s six lists are seafood, children’s clothing, jewellery, and certain furniture items.
USTR’s federal register notices, and prior relevant documents concerning the agency’s investigations, are available at the agency’swebsite.
