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COVID-19: Appearance before the Parliamentary Standing Committee on Health ()—Business measures
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Measures to support the economy and trade
Proposed response
Borders remain open for commercial operations and the CBSA is actively working to facilitate goods movement. Importers are being instructed to proceed as normal.
The CBSA and Public Safety Canada are working with our North American partners to facilitate the flow of essential goods (for example, medical supplies) and people (for example, workers in the transport and medical industry) to preserve the vital supply chains between our countries.
This includes operational assistance and information sharing to Marine Terminal Operators, the Canadian Trucking Alliance, airlines, couriers, customs brokers and other trade chain partners.
Immediately following the first set of strict public health measures coming into effect in Canada, the CBSA prioritized a number of key trade activities that may help to ease cash flow challenges facing Canadian importers and brokers, particularly those programs that regulate the payment of customs duties and the Goods and Services Tax (GST).
On , in collaboration with Finance Canada, the CBSA waived duties and taxes on temporarily imported goods for emergency use in response to COVID-19.
This measure facilitates the importation of such goods by or on behalf of federal, provincial, territorial and municipal entities, such as centres for health care and first responder organizations, including police and medical teams.
The CBSA has also implemented, as of , a grace period for late accounting penalties while maintaining the prescribed timeframes for accounting of imported goods.
In addition, I wrote to the Secretary General of the World Customs Organization (WCO) on to request that the Secretary General encourage WCO Member States to maintain coordinated action and avoid unduly disrupting international trade supply chains.
The WCO has signalled agreement with the proposal and is taking steps to achieve this objective.
US Customs and Border Protection has agreed to the CBSA's proposal to strike a Task Force in order to continue to advance the Canada-US Mexico Agreement (CUSMA) and to facilitate efficient trade and the cross-border movement of essential goods, workers and services in North America.
Following the announcement made by the Prime Minister on , CBSA has extended the timeframe for the payment of customs duties and the Goods and Services Tax (GST). The timeframe for all payments due to the Agency is extended to .
This measure is designed to help ease cash-flow challenges that businesses are facing across the country.
Finally, in closing, the CBSA has also suspended all trade compliance interactions with trade chain partners until . This provides industry flexibility by pushing out, by 30 days, the need to submit corrections to the CBSA following a trade compliance verification.
Background
On , the CBSA issued Customs Notice 20-08 relating to the Imported Goods for Emergency Use in Response to COVID-19. On , Customs Notice 20-10 was issued to provide a waiver of late accounting penalties for 45 days. Through Customs Notice 20-09, the CBSA communicated that the period of 90 days for submitting corrections, following a CBSA trade compliance verification where errors were found, were automatically extended by 30 days. All 3 notices are posted on the CBSA's external website.
Customs Notice 20-08: Imported Goods for Emergency Use in Response to COVID-19
Customs Notice 20-09: Changes in Requesting an Extension to the 90-day Period to Submit Corrections
Customs Notice 20-10: Waiver of Late Accounting Penalties (COVID-19)
Following the announcement made by the Prime Minister on , CBSA has issued Customs Notice 20‑11 regarding the extension of timeframes for the payment of customs duties and the Goods and Services Tax (GST). The timeframe for all payments due to the Agency is extended to . This also includes charges on the statement of account of March due on .
Customs Notice 20-11: Extension of Timeframes for Payment of Customs Duties and GST (COVID-19)
On , the CBSA held a teleconference with its Border Commercial Consultative Committee (BCCC) to check in on operational integrity issues and provide a forum to share information and communicate about issues of concern. The BCCC consists of customs brokers, representatives of modal conveyances rail, marine, highway, air, courier. In addition, the CBSA is consulting with its industry stakeholder group to capture, and examine possible procedural changes that can be put in place to reduce administrative burden at this time. The CBSA is sending daily updates to industry stakeholders via the BCCC network.
CBSA has also established a joint Task Force with US Customs and Border Protection to collaborate on border management/enforcement in the COVID-19 context, and is working with other government departments to assist with providing support to industry (CFIA, PHAC, HC, Agriculture, IRCC, TC, ISED, GAC, NRCan).
The restriction on non-essential travel at the Canada – U.S. border will not impeded trade. Both Canada and the U.S. recognize how closely our economies are integrated, and it is essential that trade continue during this pandemic.
The order ensures that economic supply chains remain open and we will work to facilitate the continued access to goods and services, uninterrupted. Canadians and Americans cross the border every day to work or study, for example, truck drivers, firefighters and nurses. All of these people and goods will not be impacted by the new measures.
Deferral of taxes and duties
Proposed response
As the Prime Minister announced on , the Government of Canada is providing relief to importers during the COVID-19 pandemic through deferring the payment of duties and taxes.
Pursuant to the Customs Act, the timeframe for the payment of duties and taxes has been extended to .
This deferral of customs duties and taxes is part of a broader set of measures being implemented by the Government to ease cash flow pressures impacting business, particularly small businesses.
This decision was taken in consultation with the Department of Finance and is in line with extensions being granted by the Canada Revenue Agency for the payment of GST/HST by Canadian retailers.
The CBSA issued statements of account on calling for payment before . Following the Prime Minister's announcement on , however, a notice was sent out through the CBSA automated accounting system to inform clients of the extension of the payment deadlines.
Importers do not need to apply for the extension as it is applied automatically.
The estimated deferred revenue is approximately $2.9 billion per month or $8.7 billion in total for the 3 month deferral period.
Background
The CBSA has adopted various measures pursuant to its authorities under the Customs Act and implemented flexibility authorized under the Customs Tariff to provide relief to importers during the COVID-19 pandemic. The Canada Revenue Agency is also providing relief of taxes for domestic retailers for the same time period.
Stakeholder views
On , the Canadian Society of Customs Broker (CSCB) sent a request to the CBSA and the Department of Finance requesting assistance and flexibility in deferring payment of accounts for duties and taxes collected by the CBSA from importers, as well as, the accounting timeframes for which importers are required to file their import declarations with final accounting information. Other industry associations, such as the Canadian Association of Importers and Exporters, as well as individual business, have echoed these concerns and requested relief.
The CSCB also noted that the U.S. Customs and Border Protection issued a notice to importers on , offering duty payment extensions on a case-by-case basis, communicating that a longer-term, broader extension policy was being considered.
The CBSA's statements of account were automatically issued to importers on , requesting payment by . Several importers have already requested extension from the Agency to this payment deadline. The CBSA issued statements of account on calling for payment before . Following the Prime Minister's announcement on , however, a notice was sent out through the CBSA automated accounting system to inform clients of the extension of the payment deadlines. Importers do not need to apply for the extension as it is applied automatically.
This measure was implemented by the CBSA through Customs Notice 20-11, issued on .
Economic impact
The CBSA collects nearly $3 billion in duties and taxes each month, approximately 80% of which is owing to the GST/HST. It is estimated that the revenue deferral from to will be approximately $8.7 billion.
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