Order Amending the Courier Imports Remission Order: SI/2020-34

Canada Gazette, Part II, Volume 154, Number 9

Registration

SI/2020-34 April 29, 2020

FINANCIAL ADMINISTRATION ACT

P.C. 2020-221 April 3, 2020

Her Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Minister of Finance, pursuant to subsection 23(2) footnote a of the Financial Administration Act footnote b, makes the annexed Order Amending the Courier Imports Remission Order.

Order Amending the Courier Imports Remission Order

Amendment

1 Sections 4 and 5 of the Courier Imports Remission Order footnote 1 are replaced by the following:

4 Subject to section 5, remission is granted of the customs duties and excise taxes paid or payable in respect of imported goods, other than goods imported from Mexico or the United States, that are transported by courier and have a value for duty of $20 or less.

4.1 Subject to section 5, remission of the following is granted in respect of goods imported from Mexico or the United States that are transported by courier:

Condition

5 If the benefit of remission is not received at the time of importation, the remission granted under section 4 or 4.1 is granted on the condition that a claim for remission is made to the Minister of National Revenue within two years after the date of importation of the goods for which remission is claimed.

Coming into Force

2 This Order comes into force on the day on which section 39 of the Canada–United States–Mexico Agreement Implementation Act, chapter 1 of the Statutes of Canada, 2020, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

On November 30, 2018, Canada, the United States and Mexico signed the Canada–United States–Mexico Agreement (CUSMA or the Agreement), with some further provisions agreed between the three countries on December 10, 2019. CUSMA will replace the North American Free Trade Agreement (NAFTA) that currently provides for free trade on the continent. In order to implement CUSMA, the Canada–United States–Mexico Agreement Implementation Act (the Act) was tabled in the House of Commons on January 29, 2020, and received royal assent on March 13, 2020.

The Agreement includes a provision whereby all three parties have committed to maintaining specified de minimis thresholds for courier shipments from the other CUSMA parties that waive the assessment of both customs duties and taxes at the time or point of importation. Under the de minimis framework, qualifying shipments that are valued at or less than the threshold and that are imported by courier or post are relieved of customs duties and taxes that would otherwise apply. There are some conditions for shipments to be eligible — principally that goods must be shipped directly to the purchaser from a seller outside Canada, must not consist of beverage alcohol, tobacco or cannabis, and purchases must not be divided into more than one shipment so as to be valued below the threshold.

Canada agreed to maintain de minimis thresholds for waiving customs duties and taxes on courier imports from the United States and Mexico of at least $150 for customs duties and $40 for taxes. This is an increase from Canada’s existing threshold of $20 for both customs duties and taxes on qualifying goods imported from these countries. While the commitment in respect of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) was implemented in the Act, implementation of the commitment for customs duties and other taxes requires an amendment to the Courier Imports Remission Order.

Objective

Description

The Order Amending the Courier Imports Remission Order (the Order) remits (i.e. relieves) customs duties on qualifying goods that are imported by courier from the United States or Mexico and that are valued at or below $150. It also remits excise taxes (i.e. taxes other than the GST/HST) on qualifying goods that are imported by courier from the United States or Mexico and that are valued at or below $40. The threshold for remitting customs duties and excise taxes will remain at $20 for imports by courier of qualifying goods from all other countries. For the purpose of remission of both customs duties and excise taxes, the existing Courier Imports Remission Order establishes several conditions for “qualifying goods” as noted above.

Regulatory development

Consultation

The amendment to the Order is consequential to CUSMA and implements the negotiated outcome of that Agreement. Therefore, no public consultations have been conducted specifically on the amendment. The Government of Canada undertook extensive public consultations on the modernization of NAFTA beginning in February 2017, and held over 800 interactions with more than 1 100 Canadian stakeholders. The Government also received over 46 500 written submissions from Canadians, the majority as a result of organized letter writing campaigns. The House of Commons Standing Committee on International Trade also conducted extensive consultations from February through December 2017, and studied the Act in February 2020, including hearing from one hundred witnesses.

Modern treaty obligations and Indigenous engagement and consultation

As a result of the amendment, benefits in the form of the non-application of customs duties and taxes will be accessible to anyone seeking to import qualifying goods from a CUSMA country, including Indigenous peoples.

Instrument choice

Pursuant to CUSMA, it is necessary establish the increased de minimis thresholds for courier imports. A regulatory order represents the only instrument for achieving this objective.

Regulatory analysis

Benefits and costs

This is a non-discretionary order necessary to fulfill Canada’s commitments under CUSMA that does not make changes to procedures for the importing and exporting of goods, including the required customs forms. It is estimated that the increase in the de minimis threshold for customs duties under CUSMA will result in foregone tariff revenues to the Government of $71 million per year. These foregone customs duties represent a benefit, in the form of lower customs duties to be paid by Canadian importers of goods that qualify for this de minimis threshold. As goods that are subject to excise taxes are not generally imported by courier, there are no foregone excise tax revenues anticipated as a result of the amendment.

Small business lens

The amendment does not make changes to the procedures for the importing and exporting of goods, including the required customs forms; it raises the de minimis thresholds for goods imported by courier from the United States or Mexico. Therefore, all businesses, including small businesses, will be able to claim remission of customs duties and taxes, if applicable, on goods shipped from a CUSMA country up to the new threshold in accordance with the framework.

One-for-one rule

The amendment does not make changes to the procedures for the importing and exporting of goods, including the required customs forms. Accordingly, there is no incremental change to the level of administrative burden currently imposed on businesses. Therefore, the one-for-one rule does not apply.

Regulatory cooperation and alignment

The amendment is not related to a work plan or commitment under a regulatory cooperation forum. It is necessary for Canada to fulfill its commitments under CUSMA, which is an international agreement.

Strategic environmental assessment

Global Affairs Canada (GAC) conducted an environmental assessment of the Agreement in accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals. The initial environmental assessment encompassed both qualitative and quantitative analyses. Based on a qualitative assessment of Canada’s negotiating objectives and expected outcomes, it was anticipated that a renegotiated NAFTA would have minor negative environmental impacts beyond the original NAFTA, although there was some prospect for positive environmental impacts as a result of enhanced and enforceable provisions related to environmental protection and governance. GAC is currently leading the development of the final environmental assessment.

The amendment is consequential to the implementation of CUSMA. Therefore, a separate environmental assessment was not conducted on the Order.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified with the implementation of this consequential amendment.

Implementation, compliance and enforcement, and service standards

The Canada Border Services Agency (CBSA) will monitor compliance with the terms of the Order in the normal course of its administration of customs- and tariff-related legislation and regulations. As in the case of previous free trade agreements, the CBSA will update its systems to account for the implementation in Canada of CUSMA and will inform importers of all relevant CUSMA-related issues pertaining to the Order.

Contact

Brad Norwood
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Telephone: 613‑369‑4039