Questions and answers: Standing Committee on Public Safety and National Security: Canada – U.S. Border Security (December 12, 2024)

Tariffs: How CBSA would implement

Questions and answers

If tariffs increase, what is Canada Border Services Agency's (CBSA) role?

Tariffs applied by the U.S. to Canadian exported goods would be administered by the U.S.; the CBSA will not be involved. If Canada were to apply new or changed tariff rates to good coming into Canada, these would be collected and accounted from by the CBSA. The newly launched CARM (CBSA Assessment and Revenue Management) system would administer the vast majority of these new transitions.

Would the CBSA systems need to be updated to reflect new tariffs? Specifically, how would this impact Canada Border Services Agency Assessment and Revenue Management (CARM) system?

The Canada Border Services Agency (CBSA) is responsible for administering duties and taxes, including surtaxes, while Finance Canada leads from a policy perspective. If and when the Government of Canada decides to implement a retaliatory or other type of surtax, the CBSA is well-positioned to act swiftly and efficiently.

Insofar as it relates to potential tariffs imposed on US imports to Canada, the CBSA has the ability to quickly update information within the CARM system to ensure that it reflects whatever potential surtaxes the Government of Canada imposes. For example, during the implementation of recent surtaxes on imports related to unfair trade practices from China, the CBSA was able to act immediately. Using the CARM system, these measures were implemented on day one of CARM's release on October 21 of this year.

In what way would tariffs impact border operations? For example, would Canadian exports to the United States be stalled at the border?

As the administration of tariffs would be done by the US, with the CBSA not involved, there would be no actions required by CBSA at time of export at the border. Therefore, the answer is dependent on how the US CBP administers tariffs. Should they choose to do an at border verification, then that would add to US BWT, resulting in a potential backup on the Canadian side of the border. However, if the Tariffs would be administered / verified / accounted for post arrival, then there would be no impact at the border for Tariff administration.

With respect to the possible imposition of retaliatory tariffs by Canada on US goods, virtually all commercial goods are accounted for and duties assessed after they have been released into Canada. The impact of any potential Canadian-imposed tariffs at the physical border would therefore likely be minimal.

If the tariffs are levied, will this impact the CBSA's working relationship with partners in the United States?

The Canada Border Services Agency (CBSA) is responsible for administering duties and taxes, including surtaxes, while Finance Canada leads from a policy perspective.

When the Government of Canada decides to implement a retaliatory or other type of surtax, the CBSA is well-positioned to act swiftly and efficiently. For example, during the implementation of recent surtaxes on imports related to unfair trade practices from China, the CBSA was able to act immediately. Using the Canada Border Services Agency Assessment and Revenue Management (CARM) system, these measures were implemented on day one of CARM's release on October 21 of this year.

Since then, surtaxes have continued to be promptly incorporated into CARM, and through CARM approximately $1 million worth of surtaxes has been assessed (based on available data).