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:
How to prepare for Release 1 on May 25, 2021
Changes to import bonds
Dave Pentland, Carson International Lisa Hennessy, Vice President, Avalon Risk Management
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.
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.
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.
We have received notice from the Canadian International Freight Forwarders Association (CIFFA), that a potential labour disruption may occur at the Port of Montreal.
This comes following news of the March 15 hearing that took place before the Canada Industrial Relations Board on the issue of the union being said to be negotiating in bad faith. A ruling from the CIRB is expected soon. On March 12, the employer, the Maritime Employers Association, put forth a final offer to the union. This is not an agreement in principle. The union will send out the final offer to members on March 18 by email and, for those who do not have email, copies of the offer will be available at the Maison des Débardeurs office. The Port of Montreal will be closed on March 21 from 7:00 am to 3:00 pm for a special meeting of members, during which time the contents of the final offer will be discussed. The union will follow up with information on timing and format of the meeting in order to facilitate maximum attendance for voting on the final offer.
As the offer is not an agreement in principle, there is a risk that the agreement could be rejected. Should the union reject the MEA offer on Sunday, they will be in a position to provide 72 hour strike notice. Port operations would not likely be impacted before March 24, 2021.
Carson is remaining informed of the potential strike action, and will share updates with clients as they come in.
As we reach the end of Q1, many are wondering when a sense of predictability will return to trade flows. And while the WTO has said that global trade fared better in 2020 that originally expected, it estimates continued challenges for the year ahead.
In fact, during TPM, the world’s top container shipping event, it was projected that shippers will need to wait through to the second half of the year before any semblance of normalcy returns.
Below are some key updates relating to transpacific supply chains —
Schedule reliability continues to weigh on available capacity. Vessel queues and wait times at LA/Long Beach remains significant due to a combination of high demand and COVID-related labour constraints. Idle vessels waiting in port queues while often linked to poor schedule reliability, also results in reduced capacity as vessel returns are delayed.
High demand is expected to continue throughout Q2. An increase in vaccine deployment throughout spring is expected to improve port operations as labour restrictions are lifted.
Equipment shortages remain an industry-wide challenge, as shippers add additional capacity in an effort to help reduce some of the pressure.
Air capacity has softened marginally out of China and Hong Kong. The expectation is that available space will diminish once again as we approach the end of Q1.
The office of the U.S Trade Representative has put out a notice stating that they will extend Section 301 tariff exclusions on certain imports from China through September 30. These exclusions are related to medical care and COVID-19 response products from China.
We’re Here To Help
Keeping in close contact with Carson regarding booking management is essential to mitigating risks. Please reach out to us directly so we can assess your needs and make considerations in the best interest of your business.
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.
The Biden Administration offers Canada an opportunity to reset Canada-U.S. relations in trade.
Throughout his career, President Biden has been a committed multilateralist and has relied on allies like Canada to achieve his goals internationally. This offers Canada and the U.S. an opportunity to reset their trade relationship, and prioritize issues that impact trade between the two countries.
We have updated our Carson Incoterms sheet to reflect the new 2020 version that came out last year.
Incoterms are a set of 11 internationally recognized rules which define the responsibilities of sellers and buyers, specifying who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.
If you have any questions about how to use them or how they apply to your business, please feel free to reach out to our team at email@example.com.