Canada Gazette, Part I, Volume 156, Number 48: Financial Security (Electronic Means) Regulations
November 26, 2022
Statutory authority
Customs Act
Sponsoring agency
Canada Border Services Agency
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see Regulations Amending Certain Regulations Administered and Enforced by the Canada Border Services Agency.
PROPOSED REGULATORY TEXT
Notice is given that the Governor in Council proposes to make the annexed Financial Security (Electronic Means) Regulations under paragraph 8.6(1)(a)footnote a and subsection 166(1)footnote b of the Customs Act footnote c.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Janine Harker, Director, Commercial and Trade Policy Division, Strategic Policy Branch, Canada Border Services Agency, 10th Floor, 100 Metcalfe Street, Ottawa, Ontario K1A 0L8 (email: CBSA.OCT/CECO.ASFC@cbsa-asfc.gc.ca).
Ottawa, November 17, 2022
Wendy Nixon
Assistant Clerk of the Privy Council
Financial Security (Electronic Means) Regulations
Definitions and Application
Definitions
1 The following definitions apply in these Regulations.
- Act
- means the Customs Act. (Loi)
- debtor
- means the person required to give security under the Act or the Customs Tariff. (débiteur)
- security agreement
- means an agreement between a debtor and a surety under which the surety guarantees payment of amounts that the debtor owes under the Act or the Customs Tariff. (contrat de garantie)
Application
2 These Regulations apply to security required under the Act or the Customs Tariff.
Security
Nature of security
3 For the purposes of paragraph 166(1)(b) of the Act, security required to be given must be a deposit or a written security agreement.
Security agreement — deemed terms and conditions
4 (1) The following terms and conditions are deemed to be an integral part of every security agreement and take precedence in the case of any conflict or inconsistency with any other provision of the security agreement:
- (a) the debtor and the surety represent and warrant that the security agreement constitutes a valid and legally binding obligation; and
- (b) if the debtor has failed to pay an amount that they owe under the Act or the Customs Tariff by the day on which the amount is payable, the surety must pay to His Majesty in right of Canada, in accordance with section 9, the lesser of the amount that the debtor owes and the amount of the security that the surety provides or confirms under paragraph 5(2)(e).
Surety
(2) The surety that is a party to a security agreement must be one of the following:
- (a) an entity that is licensed or otherwise authorized under the laws of Canada or of a province to carry on the fidelity or surety class of insurance business in Canada and that is recognized by the Treasury Board as an entity whose bonds or suretyships may be accepted by the Government of Canada;
- (b) a member of the Canadian Payments Association referred to in section 4 of the Canadian Payments Act;
- (c) a corporation that accepts deposits insured by the Canada Deposit Insurance Corporation or the Autorité des marchés financiers to the maximum permitted by the statutes under which those institutions were established;
- (d) a credit union as defined in subsection 137(6) of the Income Tax Act;
- (e) a corporation that accepts deposits from the public, if repayment of the deposits is guaranteed by His Majesty in right of a province.
Electronic means
5 (1) Subject to subsection (4), all security must be given by means of the electronic system specified by the Minister.
Security agreement — information
(2) In the case of a security agreement, the surety must either provide or confirm the following information by means of that system:
- (a) the agreement number;
- (b) the names of the parties;
- (c) the relevant Agency program;
- (d) the applicable business number;
- (e) the amount of the security;
- (f) the applicable legislative authority; and
- (g) the validity period of the agreement.
Update information
(3) The debtor and the surety must ensure that all information provided under subsection (2) is updated within two days after any change.
Exceptions
(4) Despite subsection (1), the Minister may require that security be given by any other means that is made available or specified by the Minister for that purpose if the Minister determines that
- (a) the infrastructure is inadequate or incompatible with the electronic system specified by the Minister;
- (b) a natural disaster, national crisis or any other exceptional circumstance prevents or impedes the use of the electronic system or makes using it unreliable; or
- (c) it is impracticable for a debtor, due to circumstances outside of their control, to give security by means of the electronic system.
Copy of security agreement
6 On the Minister’s request, the debtor or surety must provide a copy of the security agreement to the Minister by means of the electronic system specified by the Minister.
Termination of security agreement
7 (1) The surety must give at least 30 days’ notice, by means of the electronic system specified by the Minister, of the termination date of the security agreement.
Amounts owing
(2) The Minister may claim from the surety amounts that accrued before or were payable on the date of the agreement’s expiry or termination.
Enforceability
8 (1) Subject to section 9, the Minister may enforce a security agreement once the surety has either confirmed or provided, in accordance with subsection 5(2), the information set out in that subsection.
Amount
(2) The amount that the Minister may claim from the surety is the lesser of the amount that the debtor owes under the Act or the Customs Tariff and the amount of the security that the surety provided or confirmed in the electronic system under paragraph 5(2)(e).
Enforcement process
9 (1) If the debtor has failed to pay an amount that they owe under the Act or the Customs Tariff by the day on which the amount is payable, the Minister may send the surety a notice of claim that sets out the amount claimed and the information set out in subsection 5(2) that the surety provided or confirmed in the electronic system.
Limitation period
(2) In the case of a security agreement that has expired or been terminated, the Minister must send the notice of claim within one year after the date of the agreement’s expiry or termination.
Timeline
(3) Within 60 days after the day on which the notice of claim is sent to the surety, the surety must pay His Majesty in right of Canada the amount claimed or provide the Minister with information to rebut the claim.
Decision
(4) If the surety provides information under subsection (3), the Minister must review the information, make a decision in relation to the claim and notify the surety of the decision.
Requirement to pay
(5) The surety must pay the amount claimed on receipt of the Minister’s decision to that effect.
Payment by surety
10 For greater certainty, the payment of an amount by the surety to His Majesty in right of Canada under subsection 9(3) or (5) does not relieve the debtor or any other person from liability to pay any amount otherwise owed.
Transitional Provision
Continuation of security
11 These Regulations do not apply to security, other than security given under the Accounting for Imported Goods and Payment of Duties Regulations, that has been given under the Act or the Customs Tariff and that is valid immediately before the day on which these Regulations come into force. Such security continues to be valid until the day on which it expires or is terminated.
Coming into Force
S.C. 2022, c. 10
12 These Regulations come into force on the day on which section 303 of the Budget Implementation Act, 2022, No. 1 comes into force, but if they are registered after that day, they come into force on the day on which they are registered.
Terms of use and Privacy notice
Terms of use
It is your responsibility to ensure that the comments you provide do not:
- contain personal information
- contain protected or classified information of the Government of Canada
- express or incite discrimination on the basis of race, sex, religion, sexual orientation or against any other group protected under the Canadian Human Rights Act or the Canadian Charter of Rights and Freedoms
- contain hateful, defamatory, or obscene language
- contain threatening, violent, intimidating or harassing language
- contain language contrary to any federal, provincial or territorial laws of Canada
- constitute impersonation, advertising or spam
- encourage or incite any criminal activity
- contain a language other than English or French
- otherwise violate this notice
The federal institution managing the proposed regulatory change retains the right to review and remove personal information, hate speech, or other information deemed inappropriate for public posting as listed above.
Confidential Business Information should only be posted in the specific Confidential Business Information text box. In general, Confidential Business Information includes information that (i) is not publicly available, (ii) is treated in a confidential manner by the person to whose business the information relates, and (iii) has actual or potential economic value to the person or their competitors because it is not publicly available and whose disclosure would result in financial loss to the person or a material gain to their competitors. Comments that you provide in the Confidential Business Information section that satisfy this description will not be made publicly available. The federal institution managing the proposed regulatory change retains the right to post the comment publicly if it is not deemed to be Confidential Business Information.
Your comments will be posted on the Canada Gazette website for public review. However, you have the right to submit your comments anonymously. If you choose to remain anonymous, your comments will be made public and attributed to an anonymous individual. No other information about you will be made publicly available.
Comments will remain posted on the Canada Gazette website for at least 10 years.
Please note that public email is not secure, if the attachment you wish to send contains sensitive information, please contact the departmental email to discuss ways in which you can transmit sensitive information.
Privacy notice
The information you provide is collected under the authority of the Financial Administration Act, the Department of Public Works and Government Services Act, the Canada–United States–Mexico Agreement Implementation Act,and applicable regulators’ enabling statutes for the purpose of collecting comments related to the proposed regulatory changes. Your comments and documents are collected for the purpose of increasing transparency in the regulatory process and making Government more accessible to Canadians.
Personal information submitted is collected, used, disclosed, retained, and protected from unauthorized persons and/or agencies pursuant to the provisions of the Privacy Act and the Privacy Regulations. Individual names that are submitted will not be posted online but will be kept for contact if needed. The names of organizations that submit comments will be posted online.
Submitted information, including personal information, will be accessible to Public Services and Procurement Canada, who is responsible for the Canada Gazette webpage, and the federal institution managing the proposed regulatory change.
You have the right of access to and correction of your personal information. To seek access or correction of your personal information, contact the Access to Information and Privacy (ATIP) Office of the federal institution managing the proposed regulatory change.
You have the right to file a complaint to the Privacy Commission of Canada regarding any federal institution’s handling of your personal information.
The personal information provided is included in Personal Information Bank PSU 938 Outreach Activities. Individuals requesting access to their personal information under the Privacy Act should submit their request to the appropriate regulator with sufficient information for that federal institution to retrieve their personal information. For individuals who choose to submit comments anonymously, requests for their information may not be reasonably retrievable by the government institution.