Order Fixing May 13, 2024 as the Day on Which Certain Provisions of the Budget Implementation Act, 2021, No. 1 and the Budget Implementation Act, 2022, No. 1 Come into Force: SI/2024-13

Canada Gazette, Part II, Volume 158, Number 6

Registration
SI/2024-13 March 13, 2024

BUDGET IMPLEMENTATION ACT, 2021, NO. 1
BUDGET IMPLEMENTATION ACT, 2022, NO. 1

P.C. 2024-192 March 1, 2024

Order Fixing May 13, 2024 as the Day on Which Certain Provisions of the Budget Implementation Act, 2021, No. 1 and the Budget Implementation Act, 2022, No. 1 Come into Force

Her Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness,

• (a) under section 218 of the Budget Implementation Act, 2021, No. 1, chapter 23 of the Statutes of Canada, 2021, fixes
  • (i) May 13, 2024, as the day on which sections 209 to 211 of that Act come into force, and
  • (ii) 3:00:00 a.m. Eastern Daylight Time on that day as the time at which those sections come into force; and
• (b) under section 331 of the Budget Implementation Act, 2022, No. 1, chapter 10 of the Statutes of Canada, 2022, fixes
  • (i) May 13, 2024, as the day on which sections 303, 329 and 330 of that Act come into force, and
  • (ii) 3:00:00 a.m. Eastern Daylight Time on that day as the time at which those sections come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

This Order in Council, pursuant to section 218 of the Budget Implementation Act, 2021, No. 1 (BIA 2021), chapter 23 of the Statutes of Canada, 2021 and section 331 of the Budget Implementation Act, 2022, No. 1 (BIA 2022), chapter 10 of the Statutes of Canada, 2022 fixes 3:00:00 a.m. Eastern Daylight Time on May 13, 2024, as the time and day on which sections 209 to 211 of the BIA 2021, and sections 303, 329 and 330 of the BIA 2022 come into force.

Objective

The purpose of this Order is to establish the coming-into-force time and date for amendments to the Customs Act (CA) that will enable the Canada Border Services Agency’s (CBSA) Assessment and Revenue Management (CARM) project to be fully launched on May 13, 2024. These amendments provide the authority for the CBSA to implement updated processes for the posting of financial security, as well as the payment and accrual of interest on the amount of duties owed with respect to imported goods.

This Order supports the Government of Canada’s longstanding efforts to improve service delivery through digitalization.

Background

The CBSA is responsible for providing integrated border services that support national security priorities and facilitate the free flow of persons and goods. The CA is one of the key pieces of legislation governing the CBSA mandate to ensure the collection of duties and control the movement of goods and persons into Canada. The CA is not a taxing statute; however, it provides legislative authority to administer and enforce the collection of duties and taxes that are imposed under separate legislation (e.g. the Excise Tax Act, the Customs Tariff, etc.). The CA has been amended multiple times in order to allow for greater flexibility to enable new trade and business practices, and to support the Government’s strategy to strengthen security and facilitate trade.

The CARM project is a major transformation initiative to modernize the CBSA’s systems and business processes used to assess and collect duties on imported goods. Once fully implemented on May 13, 2024, CARM will modernize and simplify the CBSA’s accounting practices and systems to produce detailed financial statements, increase accountability, improve asset stewardship controls, and reduce barriers to trade.

The CA and its associated regulations provide the main framework for import procedures in Canada, including the assessment and collection of duties and taxes. To fully implement CARM, changes to the CA, as well as to the Regulations Amending Certain Regulations Administered and Enforced by the Canada Border Services Agency and the new Financial Security (Electronic Means) Regulations were required.

Legislative amendments to support CARM were pursued via two vehicles: BIA 2021 and BIA 2022. These amendments to the CA are essential for the CARM system’s functionality, which includes the legislative authority for the provision of electronic security and electronic payment. These amendments will come into force at the same time as the associated regulatory changes. This ensures that the CBSA is not placing legal obligations on trade chain partners (TCPs) until the functionality is available in the CARM system for TCPs to be able to meet those obligations. The Order brings into force the following amendments to the CA in support of CARM implementation:

• Introduce the notion of a “prescribed day” after which a correction is considered a re-determination and interest on the amount of duties owed with respect to imported goods will begin to accrue;
• Establish the Governor in Council’s authority to make regulations, on the recommendation of the Minister of Finance, respecting the circumstances and conditions of an interest-free period with respect to the duties payable on imported goods;
• Require a person who has given a deposit, bond or other security under a provision of the CA to abide by terms and conditions prescribed in the regulation;
• Allow for the Governor in Council to make regulations to specify the time, manner and place a payment to the Receiver General must be made, and allow for different payment requirements depending on the amount and the type of goods the payment involved;
• Clarify that bonds, deposits or other acceptable forms of security can be given under the CA and the regulations; and
• Allow the Governor in Council to prescribe the nature and the terms and conditions of a deposit, bond or other security to be provided.

Implications

These legislative amendments will allow the CBSA to proceed with the implementation of the CARM project on May 13, 2024 (CARM R2). CARM R2 will transition industry and the Government of Canada from the legacy assessment and revenue management systems and processes currently in place. Following CARM R2 implementation, TCPs will use CARM to account for commercial importations into Canada. Therefore, stakeholder readiness is vital to ensure the successful delivery of the CARM project.^{footnote 1}In preparation for CARM R2 implementation, the CBSA took measures to support sustainable economic recovery efforts following the COVID-19 pandemic, including a heightened focus on stakeholder readiness leading up to the implementation of the CARM project. These measures will minimize any disruption at the borders that could impact economic recovery, industry confidence, and revenues to industry and the Government of Canada.

The coming into force of all the CA provisions is not expected to have differential impacts on the basis of sex, gender, age, race, ethnicity, sexuality, religion, and/or mental or physical disability.

This Order has no financial implications for stakeholders or the Government of Canada. Financial implications of the supporting regulations are outlined in the Regulatory Impact Analysis Statement for those regulations.

Consultation

The CARM Stakeholder Engagement team has conducted consultations with stakeholders since 2018 to share information and seek stakeholder input on CARM, including through the CARM TCP Working Group, industry association meetings, webinars and open mics, and additional proactive communications (i.e. CBSA social media platforms, trade magazine articles, trade shows and press releases). Feedback obtained through this stakeholder engagement was considered as part of the amendments to the CA that are brought into force with this Order.

The proposed supporting regulatory changes were prepublished in the Canada Gazette, Part I, on November 26, 2022, followed by a 30-day public comment period. As part of this consultation, the CBSA received feedback on the timing of CARM R2 implementation. In particular, stakeholders expressed concerns about TCP readiness to go live in October 2023.

With respect to the timing of CARM R2 implementation, due to concerns surrounding readiness for an October 2023 launch date, the CBSA made the decision to move the launch of CARM R2 to May 13, 2024.

TCPs will have time to familiarize themselves with the regulations between the publication of the final regulations and the launch of CARM R2 on May 13, 2024. The regulatory amendments include a transition period to allow importers who wish to continue to have their goods released prior to the payment of duties to comply with the requirement to provide their financial security electronically. This transition period was established to decrease the risk of operational impacts and delays once CARM R2 is implemented.

This is expected to allow adequate time for the CBSA and TCPs to prepare for CARM R2. The CBSA understands that adapting to a new IT system, at the same time as introducing new regulatory requirements, creates additional pressure for TCPs. Delaying the implementation of CARM R2 until May 13, 2024, will also allow more time for TCPs to onboard and set up appropriate delegation in the CCP.

The CBSA continues to support TCPs using a comprehensive engagement strategy, including presentations and webinar series for TCPs, tailored outreach to associations to support them in sharing information with their members, and enhanced presence at ports of entry.

To support the CBSA’s assessment of CARM system readiness, robust system testing was conducted and improvements were made to system processes along the way. As part of this exercise, the CBSA conducted a CARM Experience Simulation (CES) from February to June 2023, where volunteer TCPs ran simulations of CARM business processes and interactions in a non-production environment. This activity has strengthened and ensured confidence in the CARM system and process readiness. Between October 2023 and the launch of CARM R2, the CBSA will continue to work with volunteer TCPs in a non-production environment to test business scenarios and business lines.

As part of these efforts, the CBSA continues to work hard to reach importer onboarding targets and has increased engagement efforts to ensure sufficient onboarding to facilitate a smooth CARM R2 implementation on May 13, 2024.

Contact

Valerie Dinis
Acting Director
Commercial and Trade Policy Division
Canada Border Services Agency
Ottawa, Ontario
K1A 0L8
Email: CBSA.OCT/CECO.ASFC@cbsa-asfc.gc.ca