ARCHIVED — Vol. 148, No. 7 — February 15, 2014

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Regulations Amending Certain Regulations Made Under the Customs Act

Statutory authority

Customs Act

Sponsoring agency

Canada Border Services Agency

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: It is an ongoing challenge for the Canada Border Services Agency (CBSA) to deliver consistently on both the security and facilitation aspects of its mandate while facing an increase in volume of commercial goods coming into Canada. The CBSA must ensure that costs and delays associated with clearance processes on legitimate shipments are minimized while also identifying and mitigating threats to national health, safety, security and prosperity.

To meet this challenge, the CBSA relies on a risk-based, intelligence-driven approach, concentrating its efforts on commercial goods of high or unknown risk while facilitating the entry into Canada of goods deemed to be low risk. The key to this risk-based approach is information: getting the right information to the right people at the right time ensures that border processing is both efficient and effective.

Receiving electronic information about commercial goods in advance of their arrival in Canada allows the CBSA to assess risks associated with goods and make informed decisions about those goods, thereby increasing predictability for stakeholders and minimizing delays at the border.

Description: eManifest (electronic manifest) is an initiative designed to establish advance electronic information requirements in the highway and rail modes of transportation, and to build upon existing advance commercial information requirements for goods in the marine and air modes. eManifest would ensure a paperless process, which starts before any goods reach the Canadian border, for commercial importations in all modes of transportation.

This regulatory proposal represents the first of two packages of regulatory amendments designed to support the full implementation of eManifest. “Package 1” includes requirements for electronic pre-arrival information in the highway and rail modes, enhancements to existing processes in the marine and air modes, and provisions that would allow the CBSA to develop administrative monetary penalties for non-compliance with eManifest requirements. The second package is expected to be introduced in 2015/2016 and would mainly include provisions relating to advance information requirements for importers.

This package of proposed regulatory amendments would introduce changes to five regulations made under the Customs Act:

  • the Reporting of Imported Goods Regulations;
  • the Customs Sufferance Warehouses Regulations;
  • the Designated Provisions (Customs) Regulations;
  • the Transportation of Goods Regulations; and
  • the Presentation of Persons (2003) Regulations (consequential amendments).

Cost-benefit statement: It is estimated that the implementation of Package 1 would result in a net benefit for businesses of $391 million over a 12-year period from reduced delays at the border and from efficiencies achieved by replacing paper processes with electronic ones. In addition to the anticipated cost savings, the proposed regulatory amendments are expected to enhance and improve border security, which would assist the Government in ensuring the continued health, safety, security and prosperity of Canada and Canadians. It is therefore expected that this regulatory proposal represents an overall net benefit to businesses, the Government of Canada and Canadians.

“One-for-One” Rule and small business lens: The “One-for-One” Rule will apply to this proposal. The proposed regulatory amendments would, over time, decrease the administrative burden on stakeholders by $4.6 million annualized and, therefore, constitute an “OUT” under the Rule. The proposed amendments are expected to lead to a total annualized decrease in administrative costs as paper processes would be replaced by more efficient electronic processes.

Many small businesses would experience compliance costs in transitioning to electronic processes and would therefore be impacted by these regulatory amendments. To assist small businesses with upfront capital costs for IT and ongoing maintenance costs, a flexible option has been developed by the CBSA. Businesses have the option of using the eManifest Internet portal to transmit required information to the CBSA. It is estimated that the administrative and compliance costs to small businesses of the regulatory requirements in support of eManifest would amount to $55 million over a 12-year period, or an average of less than $340 per small business ($42 annualized). Therefore, the impacts of these proposed regulatory amendments on small businesses are expected to be minimal in comparison to the overall benefits of eManifest.

Background

Imports are essential to Canada’s economic prosperity. According to the World Bank, the total value of Canadian imports increased from 34% to 45% of Canada’s gross domestic product between 2008 and 2011.

Given the importance of imports to the Canadian economy, it is essential for the CBSA to have the appropriate tools to allow the Agency to deliver border services in an open and transparent manner, providing increased predictability and consistency to the commercial import process and the transborder trade environment.

Trade chain partners

The following trade chain partners involved in the importation of commercial goods into Canada would be affected by the proposed Regulations: carriers, freight forwarders and customs sufferance warehouse operators.

A carrier is the person or company that transports commercial goods into Canada. The carrier is responsible for providing goods (cargo) and conveyance information to the CBSA.

A freight forwarder arranges for the transportation of commercial goods to Canada with a carrier and may separate a shipment of goods at a customs sufferance warehouse in Canada on behalf of an importer or the person receiving the goods. The freight forwarder is considered a secondary party in the international transportation chain. The freight forwarder is responsible for providing secondary information to the CBSA, which builds upon the information supplied by the carrier, such as the name of the person receiving the goods and the delivery address.

A customs sufferance warehouse is a privately owned and operated facility licensed by the CBSA for the control, short-term storage and examination of imported goods until they are released by the CBSA or exported from Canada.

Advance Commercial Information (ACI)

The ACI program is about providing CBSA officers with electronic pre-arrival information so that they are equipped with the right information at the right time to identify health, safety and security threats related to commercial goods before the goods arrive in Canada. The ACI program supports three of the CBSA’s strategic priorities: targeting high risks as early as possible in the supply chain continuum, offering expedited border processing for commercial goods determined to be low risk, and improving the consistency and predictability of service delivery to stakeholders.

The first phase of ACI was implemented in 2004 and established advance electronic information requirements for commercial goods in the marine mode by requiring marine carriers to transmit prescribed information electronically to the CBSA 24 hours before the goods are loaded onto the vessel at the foreign port or 24 hours prior to the vessel’s arrival at a port in Canada, depending on the type and origin of the goods.

The second phase of ACI was implemented in the air mode in 2006 and required commercial air carriers, where applicable, to transmit prescribed information to the CBSA electronically four hours prior to arrival in Canada. This phase also expanded information requirements in the marine mode for goods loaded in the United States.

Although advance electronic reporting requirements were implemented in the marine and air modes of transportation in Phases I and II of ACI, they did not extend to the highway and rail modes of transportation.

The third phase of ACI, called eManifest, (see footnote 1) would introduce amendments that

  • (i) establish advance electronic information requirements in the highway and rail modes, and
  • (ii) support and enhance ACI processes in the marine and air modes.

The eManifest initiative represents a move towards a comprehensive electronic commercial reporting environment. It would ensure that all goods coming into Canada are assessed for risk consistently, electronically, and in advance of arrival.

Identification of security risks and gaps

Since its creation in 2003, the CBSA has initiated various reviews of its commercial programs and policies with a view to developing stronger tools and processes to streamline the movement of low-risk goods and focus efforts on commercial goods of high or unknown risk. One such initiative was the Commercial Direction Initiative (CDI), which was an internal review undertaken by the CBSA in 2005–2006.

The CDI Report identified the CBSA’s continued reliance on paper-based reporting as one of the main barriers to streamlining the commercial importation process. Industry feedback from consultations completed for the CDI supported the implementation of ACI in the highway mode as soon as possible.

In addition to the CDI Report, reviews undertaken by the Auditor General of Canada (AGC) in 2007 and 2010 identified numerous gaps and inefficiencies with the CBSA’s collection and risk assessment of commercial information.

According to the 2007 Report of the Auditor General, (see footnote 2) the most significant threats facing border security today are

  • Terrorism (both terrorists and terrorism-related material);
  • Firearms, drugs, child pornography and other contraband;
  • Food and product safety;
  • The health of persons entering Canada (e.g. freedom from pandemic disease);
  • The proliferation of dual-use goods (equipment, technology or any type of good that may be used in connection with programs of weapons of mass destruction); and
  • Illegal migrants (e.g. criminals, including war criminals, and economically driven migrants).

Chapter 8 of the Auditor General’s 2010 (see footnote 3) report recommended that “the Canada Border Services Agency should improve its systems and practices for monitoring the quality of electronic information that it receives during the commercial importing process—to obtain reasonable assurance that this information is accurate, complete, and timely. The Agency should then use the results of its monitoring process for continuous improvement.”

The CBSA agreed that improvements were required to address the shortcomings found in the Auditor General Report and decided that systems need to be in place to ensure that commercial information provided by all trade chain partners would be reviewed and evaluated consistently and effectively through every stage of the import process, from pre-arrival through to release.

The CBSA examined the international commercial environment to ensure that any new processes developed would be consistent with its major trading partners — especially its main trading partner, the United States.

Issues

The CBSA is responsible for providing integrated border services that support national security and public safety priorities and that facilitate the free flow of persons and goods that meet all program requirements. It is challenging to deliver consistently on both the security and facilitation aspects of this mandate when faced with an ever-increasing volume of travellers and commercial goods coming into Canada. The CBSA must ensure that costs and delays associated with clearance processes on legitimate people and goods are minimized while at the same time identifying and mitigating diverse and constantly evolving threats to national health, safety, security and prosperity.

To meet these challenges, the CBSA relies on a risk-based, intelligence-driven approach, concentrating its efforts on people and goods of high or unknown risk while facilitating the entry into Canada of people and goods deemed low risk. The key to this risk-based approach is information: getting the right information to the right people at the right time ensures that border processing is both efficient and effective. Receiving electronic information about commercial goods in advance of their arrival in Canada allows the CBSA to assess any risks associated with goods and make informed decisions about those goods, thereby increasing predictability for stakeholders and minimizing delays at the border.

The need to amend the existing regulations stems from a variety of factors:

  • Pre-arrival information is not systematically collected and screened consistently in all modes of transportation;
  • Specific roles, responsibilities and accountabilities for each stakeholder in the trade chain continuum are not clearly defined; and
  • CBSA commercial processes are not aligned with international standards.
Pre-arrival information is not systematically collected and screened consistently in all modes of transportation

Internal program reviews undertaken by the CBSA and reports of the Auditor General of Canada have identified issues with the CBSA’s ability to detect and address risks associated with commercial goods consistently and effectively. In addition, questions have been raised about the accuracy and reliability of the information provided to the CBSA about commercial goods.

The establishment of ACI requirements has enabled the CBSA to conduct automated pre-arrival risk assessments for commercial goods imported to Canada by the air and marine modes. Therefore, all goods that come to Canada by sea or by air are subjected to a consistent level of security screening. Conversely, goods that come to Canada overland (i.e. via the highway and rail modes), for which there are no formal advance electronic requirements, are not necessarily subject to the same level of security screening. This is significant as about 64% of goods that enter Canada are imported overland.

Specific roles, responsibilities and accountabilities for each stakeholder in the trade chain continuum are not clearly defined

Currently, the CBSA does not have reasonable assurance that the commercial information provided by stakeholders at various stages of the import process is accurate, complete and timely. For example, freight forwarders are not held accountable for transmitting specific advance commercial information on goods destined for Canada. Likewise, customs sufferance warehouse operators/licensees are not required to acknowledge the arrival of commercial goods at their warehouses with an electronic message.

To ensure that advance commercial information is reliable, accurate and complete, it is essential that all stakeholders involved in the transportation of goods to Canada provide and be accountable for specific information relating to the movement of goods. The CBSA seeks to improve the quality of commercial information provided to it by prescribing roles, responsibilities and accountabilities for each stakeholder in the supply chain continuum. Each stakeholder would be responsible for providing specific information, which could be compared to information provided by other trade chain partners to ensure the integrity, accuracy and completeness of the information the CBSA receives. For example, eManifest would require electronic information from freight forwarders. This information would then be compared to information received from carriers to identify any anomalies or inconsistencies.

CBSA commercial processes are not aligned with international standards

The United States already requires the electronic submission of advance cargo and conveyance data by carriers. The Advance Electronic Information Regulations, (see footnote 4) introduced in 2003, require the advance transmission of electronic cargo information and other specific data requirements from carriers for import shipments in all modes of transportation. The Automated Commercial Environment (ACE) is the United States Customs and Border Protection’s (USCBP) commercial trade processing system for transmitting required advance highway, rail and marine cargo information.

In designing eManifest, the need to align with U.S. processes for the sake of a common client, i.e. highway carriers that transport goods across our shared border, was an early priority. Ensuring commonalities between eManifest and ACE would allow highway carriers that have already implemented systems for ACE participation to simply modify those systems for eManifest purposes. The carriers would thereby avoid the cost of implementing an entirely new system. Feedback from stakeholders confirms that the implementation costs for eManifest would be lower for those already using ACE. Once eManifest is implemented, information requirements in the two countries would be closely aligned, which would allow stakeholders to develop common reporting processes and, thereby, reduce complexity and duplication of effort.

In addition, the Beyond the Border Action Plan, (see footnote 5) announced by Prime Minister Stephen Harper and U.S. President Barack Obama on December 7, 2011, committed both nations to the pursuit of a shared approach to strengthening perimeter security and accelerating the legitimate flow of people, goods and service between the two countries. The implementation of eManifest would support these objectives by aligning commercial import processes in the two countries.

Finally, the implementation of eManifest would ensure that commercial reporting requirements in Canada remain consistent with international standards. Since September 11, 2001, international customs administrations, organizations, conventions, and agreements have focused on ensuring better trade security and facilitation. Some of the modern principles of trade security and facilitation include

  • establishing harmonized international customs standards;
  • using risk management principles (identifying high risk shipments based on analysis and intelligence) to screen the import and export of goods;
  • requiring the submission of advance customs information;
  • requiring the submission of electronic customs information; and
  • facilitating legitimate trade while maintaining effective control.

Notably, these are all standards promoted by the World Customs Organization (WCO). The WCO is an intergovernmental organization that focuses extensively on customs issues with the goal of enhancing the effectiveness and efficiency of international customs processes. It is recognized for its work to facilitate and secure international trade. For example, the WCO’s SAFE Framework of Standards to Secure and Facilitate Global Trade, published in 2005, sets out a range of standards to guide customs administrations in providing predictable and consistent supply chain security. Canada has been a member of the WCO since 1971.

Given these issues, the CBSA recognizes the need to enhance how it screens and processes commercial goods coming into Canada. Without the proposed regulations, the CBSA would be unable to identify potential risks associated with the import of goods in the highway and rail modes. Without pre-arrival information, the CBSA would be limited in its ability to streamline import processes. In addition, Canada would not be in line with its biggest trading partner, the United States, and would not meet the standards set out by the WCO, which could result in a loss of economic prosperity.

Objectives

The eManifest initiative would introduce amendments that would expand pre-arrival information requirements to include carriers in the highway and rail modes of transportation. In addition to the required data, advance information will be required from other trade chain partners involved in the importation of goods into Canada in all modes of transportation. Each member of the trade chain would have a separate obligation for various pieces of information relating to commercial goods before they are loaded onto the vessel (in marine mode only) and in advance of the estimated arrival of goods at a port of arrival in Canada. In addition, customs sufferance warehouse operators would be required to acknowledge receipt of goods through an electronic arrival message transmitted to the CBSA once the goods have arrived at their warehouse.

By mandating that all trade chain partners provide advance commercial information to the CBSA, security is enhanced through a risk assessment of all the pertinent information relating to goods in advance of their arrival in Canada. At the same time, trade facilitation is improved, as those commercial goods deemed low risk would benefit from a more efficient border clearance process.

The improved risk assessment process made possible by the pre-arrival electronic transmission of commercial information under the eManifest initiative would lead to shorter and more predictable clearance times for low-risk commercial goods. Also, the automation of customs processes would improve the CBSA’s ability to monitor data quality and integrity, to monitor and enforce compliance, and to establish service standards for many of its key services to trade chain partners, such as processing times and wait times at land border crossings.

Description

The regulatory amendments herein are being proposed pursuant to subsection 8.1(8), sections 12 and 12.1, subsection 14(2), sections 22, 30 and 109.1 and subsection 164(1) of the Customs Act. These amendments would enact changes required to implement eManifest and enhance ACI.

Package 1 includes amendments to the following regulations:

1. Reporting of Imported Goods Regulations

Interpretation

The terms “airport of arrival,” “commercial driver,” “courier,” “emergency conveyance,” “fishing vessel,” “freight forwarder,” “NAV CANADA,” and “port of arrival” would be added to the Regulations. The terms “commercial goods” and “specified goods” would be amended to detail the goods included in new sections of the Regulations as well as the goods that would not be covered by the new sections of the Regulations.

Highway cargo and conveyance information

Baseline scenario: Currently, commercial highway carriers may provide paper documentation to the CBSA regarding imported goods upon arrival at the border. Since November 2010, highway carriers have had the option to provide this information to the CBSA electronically.

Regulated scenario: The proposed amendment would require highway carriers to provide cargo and conveyance information (e.g. cargo description, licence plate information) electronically to the CBSA at least one hour before the conveyance arrives at the border. This requirement would give the CBSA time to assess risks and make informed determinations without creating significant delays to the travel time of the carrier.

The required information would be provided to the CBSA by either the carrier or on its behalf by a third-party service provider and through either a direct connection or the CBSA’s free Internet portal. Both the direct connection and the Internet portal are considered acceptable means of transmission to meet the information requirements.

Virtually all commercial carriers transporting commercial goods to Canada also transport goods to the United States, where they are currently required to transmit information electronically to the USCBP in advance of arrival at the U.S. border. Since it is more economically feasible to transport goods both coming and leaving Canada (rather than making one leg of the journey empty and therefore without revenue), it is assumed that the majority of carriers entering or returning to Canada are already electronically capable in order to comply with U.S. requirements.

Note: The proposed amendments would not apply to goods imported under the courier Low Value Shipment (LVS) program (e.g. casual goods or goods that have an estimated value of less than $2,500) that are transported by or on behalf of a courier that has been authorized to account for those goods in accordance with subsection 32(4) of the Customs Act. The courier LVS program streamlines processing of low-value goods through an alternative method of risk assessment while providing the courier industry with expedited release. Couriers must post security and receive written authorization before participating in the program.

Rail cargo, conveyance and arrival message information

Baseline scenario: Currently, all rail carriers transporting commercial goods to Canada provide cargo and conveyance information to the CBSA either electronically or in paper form. Although the majority of rail carriers provide this information electronically, they are not currently required to notify the CBSA when the train physically crosses the border into Canada.

Regulated scenario: The proposed amendments would require rail carriers to provide cargo and conveyance information electronically to the CBSA at least two hours before the train is expected to cross the border into Canada. In addition, rail carriers would be required to provide an electronic arrival message to the CBSA without delay after the train crosses the border into Canada. This requirement would give the CBSA time to assess risks and make informed determinations without creating significant delays to the travel time of the rail carriers. The electronic arrival message would identify the date, time and the CBSA office of arrival.

Between 2007 and 2012, 99.6% of cargo and conveyance information provided by rail carriers was submitted electronically. Therefore, this change is expected to have a minimal impact on rail carriers.

Note: The proposed amendments would not apply to goods imported under the courier Low Value Shipment (LVS) program (e.g. casual goods or goods that have an estimated value of less than $2,500) that are transported by or on behalf of a courier that has been authorized to account for those goods in accordance with subsection 32(4) of the Customs Act. The courier LVS program streamlines processing of low-value goods through an alternative method of risk assessment while providing the courier industry with expedited release. Couriers must post security and receive written authorization before participating in the program.

Electronic arrival messages in the air and marine modes

Baseline scenario: Currently, carriers in the air and marine modes are not required to notify the CBSA when the conveyance arrives in Canada. Instead, the CBSA automatically generates an arrival time based on the estimated time of arrival provided by the carrier.

Regulated scenario: The proposed amendments would require air and marine carriers to provide an electronic arrival message to the CBSA without delay upon arrival in Canada. Specifically, air carriers would be required to provide this message without delay after the aircraft is cleared by NAV CANADA to land at an airport following arrival in Canada. Marine carriers would be required to provide this message without delay after the vessel lands at a marine port of entry.

Note: The proposed amendments would not apply to goods imported under the courier Low Value Shipment (LVS) program (e.g. casual goods or goods that have an estimated value of less than $2,500) that are transported by or on behalf of a courier that has been authorized to account for those goods in accordance with subsection 32(4) of the Customs Act. The courier LVS program streamlines processing of low-value goods through an alternative method of risk assessment while providing the courier industry with expedited release. Couriers must post security and receive written authorization before participating in the program.

Removal of break-bulk exemption

“Break-bulk goods” are commercial goods that are neither transported within a cargo container nor in bulk (e.g. grain stowed loosely in the vessel’s hold) and include goods such as oil and gas equipment, construction equipment, and automobiles.

Baseline scenario: Currently, marine carriers that transport break-bulk goods to Canada are required to provide cargo and conveyance information to the CBSA at least 24 hours before the goods are loaded onto the vessel at the foreign port. However, carriers may request an exemption from this requirement and permission to provide this information to the CBSA 24 hours before a vessel’s arrival at a port in Canada.

Regulated scenario: The proposed amendments would extend the beneficial time frame (24 hours before the estimated arrival at a port of arrival in Canada versus 24 hours before the goods are loaded onto the vessel at the foreign port) for approved marine break-bulk carriers to all marine carriers transporting break bulk, eliminating the need for carriers to complete an application and maintain an authorization with the CBSA. Because of the elimination of the need to apply for and maintain exemption status, marine carriers with break-bulk goods that have difficulty meeting the pre-load time frame requirement would no longer incur costs related to the application and maintenance of the exemption status in order to gain flexibility in transmitting cargo and conveyance data.

In addition to section 13.8, other sections that relate to the exemption (sections 13.81, 13.82, 13.83, 13.84, 13.85 and 13.86) would be repealed as consequential amendments to the removal of the exemption.

Carrier code requirements

A carrier code is a four-digit unique identifier that is assigned by the CBSA to a commercial carrier or a freight forwarder free of charge. The carrier code lets the CBSA know with whom it is doing business, and is similar to a passport for a traveller entering Canada.

Baseline scenario: Currently, all commercial carriers transporting commercial goods to Canada require a carrier code. However, this is an administrative and not a legal requirement (i.e. without a carrier code, a carrier would be unable to provide information). Therefore, there are no formal terms and conditions that apply to the issuance and use of carrier codes. Likewise, the CBSA has no legal recourse for addressing carrier code problems and abuses.

The Jobs and Growth Act, 2012, which was passed on December 14, 2012, provides for amendments to section 12.1 of the Customs Act. The new section 12.1, once it comes into effect, will codify requirements for obtaining a valid carrier code.

Regulated scenario: Once section 12.1 comes into force, commercial carriers and freight forwarders would be required to hold a valid carrier code. A carrier may hold one carrier code for each mode of transportation in which it is engaged; a freight forwarder may only hold one carrier code. The proposed regulatory amendments would specify the terms and conditions for obtaining a carrier code and the grounds for suspending or cancelling a carrier code. As well, carriers and freight forwarders would be required to keep the information regarding their carrier codes up to date and to inform the CBSA of certain changes.

The carrier code requirements would ensure that carriers and freight forwarders are accountable for the advance commercial information they provide to the CBSA. In addition, the proposed regulations would allow the CBSA to suspend or cancel a carrier code if a person contravenes a provision of a federal act or regulation (e.g. smuggling), if a person fails to pay an amount under the Act (e.g. failing to pay duties and taxes), or if a person provides false or misleading information in the application for a carrier code.

Freight forwarder cargo information

Baseline scenario: Currently, freight forwarders in the air and marine modes provide secondary information on commercial goods to the CBSA in paper form, and only after the goods have arrived in Canada. Secondary information consists of additional details about the goods, such as the name of the person receiving the goods and the delivery address. Although freight forwarders provide this information in practice, they are not required to do so under the Regulations.

Regulated scenario: The proposed amendments would require freight forwarders in all modes of transportation to provide the secondary or supplementary information to the CBSA electronically and within prescribed time frames, prior to the goods arriving in Canada, as follows:

Marine

Air

Rail

Highway

At least 24 hours before loading the goods or at least 24 hours before the estimated time of arrival at a port of arrival in Canada, depending on type and origin of goods

At least four hours before the estimated time of arrival or at the time of departure, depending on the duration of the flight

Two hours before the conveyance arrives in Canada

One hour before the conveyance arrives in Canada

Marine bay plan (vessel stow plan)

The marine bay plan is a standard marine transportation document that assigns a numbered position to all cargo bays on the vessel and details the exact location of each container being transported on board the vessel. It is used by persons in the marine transportation industry to identify all the containers and their location on a vessel. Information about each container and its specific location is electronically logged as the vessel is loaded and unloaded at a port, ultimately resulting in a “blueprint” of the cargo and other stowage locations. This data can be represented visually as a virtual x-ray revealing the location of each container.

Baseline scenario: Currently, marine carriers are not required to provide the CBSA with the vessel bay or stow plan. However, most marine carriers provide it to other carriers and marine terminal operators as part of their business operations. Also, since 2009, U.S.-bound marine carriers have been required to provide vessel stow plans to the USCBP.

Regulated scenario: Under the proposed amendments, marine carriers would be required to provide the vessel bay or stow plan to the CBSA electronically within 48 hours after the vessel leaves the last foreign port before its estimated arrival at a port of arrival in Canada. This information would enable the CBSA to identify unreported containers and pinpoint containers which may pose risk. Cargo information provided by the carrier for goods expected to be transported to Canada before the goods are loaded onto the vessel would be compared to bay plan data provided after the containers are loaded aboard the vessel.

2. Customs Sufferance Warehouses Regulations

Electronic arrival messages for in-land customs sufferance warehouses

Baseline scenario: Currently, sufferance warehouse operators are not required to electronically notify the CBSA of the arrival of goods at their warehouses. However, sufferance warehouse operators acknowledge the receipt of goods in a warehouse either by endorsing a customs document or transportation document presented by the carrier, or by issuing a transfer document to the carrier. This proof of receipt shows that goods have been physically transferred from the carrier to the warehouse operator.

Regulated scenario: Under the proposed amendments, sufferance warehouse operators would be required to acknowledge the receipt of goods in their warehouse through an electronic arrival message. As most warehouse operators (634 of 1 017) already receive electronic messages from the CBSA, they would be able to transmit an electronic arrival message to the CBSA through their existing systems at a negligible cost.

Note: The electronic arrival message does not apply to goods imported under the courier Low Value Shipment (LVS) program (e.g. casual goods or goods that have an estimated value of less than $2,500) that are transported by or on behalf of a courier that has been authorized to account for those goods in accordance with subsection 32(4) of the Customs Act. The courier LVS program streamlines processing of low-value goods through an alternative method of risk assessment while providing the courier industry with expedited release. Couriers must post security and receive written authorization before participating in the program.

3. Transportation of Goods Regulations

Amendments to the record requirements

Baseline scenario: Currently, commercial carriers are required to keep records relating to all commercial goods transported by them to Canada for three years plus the current year. Carriers are required to keep paper records about cargo that has been imported into Canada on previous trips (e.g. who shipped the goods and where the goods were delivered).

Regulated scenario: Under the proposed amendments, these record-keeping requirements would be extended to freight forwarders and would include all information provided to and received from the CBSA electronically for three years plus the current year.

4. Designated Provisions (Customs) Regulations

The Administrative Monetary Penalty System (AMPS) program is a civil penalty regime that ensures compliance with legislation through the application of monetary penalties. Section 109.1 of the Customs Act authorizes the CBSA to issue penalties for noncompliance with requirements that have been designated in the Designated Provisions (Customs) Regulations.

In the commercial stream, AMPS penalties have been issued by the CBSA since October 7, 2002, for non-compliance with program requirements found either at the border or through post-release verification of company records.

Baseline scenario: Currently, monetary penalties are not assessed by the CBSA against air and marine carriers regarding existing advance commercial information requirements.

Regulated scenario: The Designated Provisions (Customs) Regulations would be amended to designate new subsections 12.1(2) and (7) of the Customs Act and new sections of the Reporting of Imported Goods Regulations. Together with existing designated provisions, this would allow the CBSA to assess administrative monetary penalties for non-compliance in the following situations:

  • failing to provide pre-arrival cargo and conveyance information;
  • failing to provide cargo and conveyance information electronically or within the prescribed time frames;
  • failing to notify the CBSA without delay of a change to the advance commercial information provided;
  • failing to comply with a notification issued by the CBSA regarding commercial goods destined for Canada; and
  • failing to hold a valid carrier code.

The new administrative monetary penalties would conform to the existing standards of the CBSA’s AMPS program, which is based on uniform systematic criteria reflecting the risk and impact of each contravention.

5. Presentation of Persons (2003) Regulations

Consequential amendments to the Presentation of Persons (2003) Regulations would standardize certain provisions with the new section 12.1 of the Customs Act as well as the new provisions proposed for the Reporting of Imported Goods Regulations.

Consequential amendments

The order and numbering of most of the existing sections and other minimal wording changes in some of the existing sections in the Reporting of Imported Goods Regulations would be amended to ensure that requirements are laid out as clearly and logically as possible. Schedules to the Regulations would be added or amended to detail the advance commercial information required to be provided by carriers and freight forwarders.

Regulatory and non-regulatory options considered

Section 12.1 of the Customs Act provides the Governor in Council with the authority to make regulations regarding advance commercial information in all modes of transportation. The proposed amendments are necessary to complete the implementation of the ACI program and to ensure that the deficiencies identified by the CDI and AGC reports are addressed. In addition, these amendments would ensure that the CBSA has the proper tools to effectively screen and process all commercial goods coming into Canada.

Implementing eManifest as an administrative policy, as opposed to codifying it in regulation as proposed, would mean keeping both a paper-based process and an electronic-based process since both would be legally permissible. This redundancy would limit the benefits which would be realized by the current plan to mandate exclusively electronic processes due to the challenges associated with data management and the costs of maintaining parallel systems.

Benefits and costs

As per the Treasury Board Secretariat requirement to conduct a cost-benefit analysis (CBA) covering at least 10 years for each medium- to high-impact regulatory proposal, a CBA for the full implementation of the eManifest initiative (Packages 1 and 2) was done covering a 12-year period from 2014 (the year the proposed regulations in Package 1 are planned to come into force) to 2025 (the tenth year of the full implementation).

Based on a preliminary analysis, the eManifest initiative was assessed to have a medium level of cost impact (between $10 and $100 million in present value). As a result, the cost-benefit analysis followed Treasury Board Secretariat guidelines on a CBA for medium-impact initiatives, which require that

  1. all costs and those benefits where data are easily available be monetized and present; and
  2. all non-measurable benefits be analyzed qualitatively.
Identification and description of costs and benefits for businesses

The eManifest requirements for electronic transmission of data pre-arrival would involve an evolution from paper documents to electronic data. The incremental costs associated with these requirements would include

  • 1. IT system updates/changes: Computer hardware and software costs to equip businesses with the technology to transmit data electronically to the CBSA. These could range from the most expensive option of building a system directly connected to the CBSA for transmission, to a less expensive option of subscribing to a third-party service provider that has direct link to the CBSA for transmission, to the least expensive option of entering data via the eManifest Portal (free of charge).
  • 2. Electronic data preparation: Labour time to collect data from source documents such as invoices and bills of lading and to enter data into the system.
  • 3. Electronic data transmission: Per transaction cost required if a business transmits the data through a third-party service provider.
  • 4. Learning/training: Labour time to learn the new eManifest requirements and to attend training on using the new hardware/system.
  • 5. Delays due to one-hour minimum pre-notification requirements (in the highway mode): Waiting time that might be required before trucks can head to the border for shipments originating within one hour’s driving time from the border.
  • 6. Cost of carrier code application: Labour time to prepare and follow up on specific applications.

All the above costs are monetized (i.e. estimated in terms of dollar value) in the cost-benefit analysis.

The implementation of the eManifest initiative is expected to have the following incremental benefits:

  • 1. Elimination of paper preparation: Labour time saved by not requiring the collection of data from source documents and filling in the paper forms. This would offset the cost of preparing electronic data (cost 2 above).
  • 2. Reduction in the use of paper and ink: Paper and ink saved by not requiring the printing of related customs documents and copies. This would offset the cost of transmitting data (cost 3 above).
  • 3. Shipments clearing customs in a timely manner: Waiting time saved at the border due to shorter processing time because of the following:
    • • Border Services Officers would no longer need to enter data from paper forms;
    • • As data would be validated pre-arrival, any problems of omissions or errors in the data submitted could be rectified beforehand instead of being dealt with at the border, which causes delays and line-ups. Examples of omissions and errors include missing descriptions of goods or descriptions that are too general (e.g. “electronics” is too general; the description needs to be more specific, such as “computers”);
    • • For carriers in the air, marine and rail modes, there would be no need to send someone to a CBSA office to present the paper documents. All would be done electronically;
    • • There would be shorter line-ups for all carriers at the border due to shorter processing times of shipments from other carriers; and
    • • Low-risk shipments would be identified and would have facilitated entry into Canada (e.g. reduced likelihood of being referred to a secondary examination).
  • 4. More certainty of shipments clearing customs: Reduced uncertainty in border crossing times due to reduced incidences of delays arising from omissions and errors in the data submitted. Businesses would therefore have greater certainty on the status of their shipments and of their unimpeded flow through a border crossing. This could result in significant savings for the businesses as it would be possible for them to reduce planned slack time in their schedule and reduce employee wage costs.
  • 5. Added operational efficiency due to close alignment with U.S. electronic manifest process (in the highway mode): Having similar electronic manifest processes for both northbound and southbound movements would allow carriers to leverage the investment they would be making for systems, procedures and training to comply with eManifest requirements and would give them added operational efficiency.

Benefits 1, 2 and part of 3 (related to cargo and conveyance requirements in the highway mode only) are monetized in the cost-benefits analysis. All other benefits are presented qualitatively due to the lack of reliable data for quantification and monetization of the impacts.

Identification and description of costs and benefits for the CBSA and the Government of Canada

The eManifest initiative would require the CBSA to switch from a paper-based system to an electronic system with the extensive use of information technology. As a result, the CBSA is expected to incur the following incremental costs:

  • 1. Operation and maintenance of computer systems: New computer systems have been developed for eManifest. Resources would need to be allocated for the ongoing operation and maintenance of these systems.
  • 2. Training of staff: eManifest would necessitate the re- allocation of manpower from paper processing to other policy support, such as policy/program monitoring, and risk assessment activities. Extensive training would have to be offered to the staff for them to learn the new regulations, procedures and computer systems.

The implementation of eManifest is expected to increase the CBSA’s ability to identify high-risk and unknown-risk shipments and to facilitate the movement of low-risk shipments across all modes of transportation by bringing the following benefits to the operations of the CBSA:

  • 1. Consistency of application across modes of transportation: As the proposed regulations would expand the existing requirements for marine and air carriers to those in the highway and rail environment, there would be a consistent application of risk assessment across all modes of transportation relative to CBSA requirements.
  • 2. Better tracking of in-bond movement: With inland electronic arrival messages, the CBSA would be able to identify more accurately the location of in-bond goods once they pass the first point of arrival.
  • 3. Greater transparency and delineation of liability for the clients: A unique carrier code for each applicable party would ensure that each client would be held accountable for their requirements and not for those of other businesses.
  • 4. Enhanced ability to identify unreported and high-risk containers: A marine bay plan (which provides the location of all cargo and cargo containers on board a vessel) would give the CBSA the enhanced ability to identify unreported containers and containers which might pose significant risks.
  • 5. Right information from the right party for accurate risk assessments: Since the freight forwarders have access to detailed information not available to carriers, which they can supply directly to the CBSA, the new regulations that require freight forwarders to submit pre-arrival information would allow the CBSA to receive the right information from the right party to perform accurate risk assessments and to more clearly assign liability and enforce compliance.
  • 6. Centralization of targeting activities: Electronic reporting of pre-arrival information would make centralizing risk and targeting activities possible, thereby reducing the duplication of effort found in the current targeting program.
  • 7. Shorter processing time at the border: Border service officers would no longer need to enter cargo and conveyance information into the CBSA computer system at the border. Instead, necessary information, as well as release and admissibility recommendations would be available at the touch of a button for the border service officer to make a decision.

A successful risk assessment program should allow the CBSA to better utilize its resources and result in more efficient border management. It is therefore expected that the cost incurred by the proposed regulations would be offset by the reduction of staff and resources for operating and maintaining the previous paper-based system and by the savings from shorter processing time at the border.

The overall net benefit to the CBSA relating to the allocation and utilization of resources, is monetized in the cost-benefit analysis.

Identification and description of costs and benefits for the Canadian public

The implementation of the eManifest initiative is expected to bring the following incremental benefits to the Canadian public:

  • 1. Increased protection from security, health and safety risks: Improvements in the CBSA’s ability to identify and interdict high-risk shipments would ensure that goods that would potentially pose threats to the security, health and safety of the Canadian public would likely be prevented from entering into the country.
  • 2. Increased prosperity from high level of international trade: The facilitation of the movement of low-risk shipments would reduce border-related business costs. These savings would potentially be passed onto the Canadian public in the form of lower prices of imported goods for the consumer and lower prices of imported production inputs for the producer.

These benefits are presented qualitatively in the cost-benefit analysis, as there is no reliable data available to quantify the change in risks and prices due to the new regulations.

General approach to calculation of monetized costs and benefits
Cost and benefit categories

In this analysis, costs of the proposed regulations for businesses are monetized. To estimate the monetized costs, the standard cost model recommended by the Treasury Board Secretariat is applied. The standard cost model classifies costs into compliance costs and administrative costs. Compliance costs are upfront and ongoing costs that businesses face when complying with a regulation. Administrative costs are time and resources spent by businesses to demonstrate compliance with government regulatory requirements in terms of planning, collecting, processing and reporting of information, and completing forms and retaining data requirement by governments. The types of costs considered in this analysis include

Cost category

Compliance/ administrative

Upfront/ ongoing

Comment

System upgrades/ changes

Compliance

Upfront/ ongoing

  • Trade chain partners can choose to transmit data via internal direct connection EDI system or third party connectivity service. Carriers in the highway mode, freight forwarders, customs brokers and importers can use the free eManifest Portal. Use of the eManifest Portal is limited to 200 transmissions of data per hour. It is assumed that larger companies (sending more than 200 transmissions in one hour) will choose to send their data via the EDI system or through a third party connectivity service.
  • Costs are per business (per year, if ongoing).

System upgrades/ changes (maintenance)

Compliance

Ongoing

  • Costs are per business per year.

Waiting time to satisfy pre-notification requirement

Compliance

Ongoing

  • For highway cargo and conveyance data only. Carriers are able to submit their data up to 30 days in advance. Truck trips that are less than one-hour drive from the border might be affected by the one-hour pre-notification requirement. Only applicable to those carriers with difficulties submitting the required information one hour before arriving at the border.
  • Costs are per truck trip.

Cost of electronic data transmission

Compliance

Ongoing

  • This refers to the per transaction fee charged by third party connectivity service.

Application

Administrative

Upfront

  • For carrier code requirements only.
  • Costs are per business.

Cost of electronic data preparation

Administrative

Ongoing

  • Costs are per transaction.

Learning/training

Administrative

Upfront

  • This includes learning the regulatory procedures and the software.
  • Costs are per business.

As mentioned, not all benefits are monetized in this analysis due to a lack of reliable data for quantification. The types of monetized benefits considered in this analysis include the following:

Benefit category

Compliance/ administrative

Upfront/ ongoing

Comment

Reduction in the use of paper and ink

Compliance

Ongoing

  • This is a cost saving offsetting the cost of electronic data transmission.
  • Cost savings are per transaction.

Elimination of paper preparation

Administrative

Ongoing

  • This is a cost saving offsetting the cost of electronic data preparation.
  • Cost savings are per transaction.

Elimination of application and maintenance of break-bulk exemption status

Administrative

Ongoing

  • Applicable to a small portion of marine carriers with break-bulk shipments only.
  • Cost savings are per firm per year.

Waiting time saved at the land border due to shorter processing time

Compliance

Ongoing

  • Related to cargo and conveyance requirements in the highway mode in Package 1 and in-transit requirements in the rail and highway modes in Package 2.
  • Cost savings are per truck trip.
General formulas

The total cost for each stakeholder type as presented in the cost-benefit statement in this document is the sum of applicable costs (both compliance and administrative) for the stakeholder type over all applicable proposed regulatory requirements.

Similarly, the total benefit for each applicable stakeholder type as presented in the cost-benefit statement in this document is the sum of applicable benefits (both compliance and administrative savings, as well as indirect savings from shorter waiting time if applicable) for the stakeholder type over all applicable proposed regulatory requirements.

Regarding the costs and benefits to the CBSA, the estimates of benefits are taken from various CBSA internal exercises that have projected net savings in staffing, operations and maintenance in the coming years due to different ongoing CBSA initiatives.

For a detailed description of the formulas used in this analysis, please see Annex 1.

Estimating numbers of affected stakeholders and transactions

As per the requirement of the Treasury Board Secretariat, the scope of this analysis limits the affected businesses to those who operate and pay corporate taxes in Canada; the numbers of such businesses are estimated as follows:

Stakeholder type

Estimated No.

Source

Carriers

16 658

CBSA administrative records — The number of active carrier codes with a Canadian mailing address or a Business Number (issued by the Canada Revenue Agency) on file as of July 26, 2012.

Freight forwarders

450

CBSA administrative records — The number of active carrier codes with a Canadian mailing address or a Business Number (issued by the Canada Revenue Agency) on file as of July 26, 2012.

Sufferance warehouses

1 017

CBSA administrative records (as of June 21, 2012).

Licensed customs brokers

255

CBSA Web site (as of July 29, 2012).

Carrier code applicants (2013–2014)

4 800

CBSA administrative records — Extrapolated from the 166 new carrier code applications received between January 1 and June 4, 2012.

Importers

150 890

Statistics Canada (2011): A Profile of Canadian Importers, 2002 to 2009 — The number of importing establishments in 2009.

The number of affected stakeholders is assumed to be constant over the years, whereas the number of affected transactions is assumed to grow at an annual rate equal to the average annual growth rate between 2007 and 2011.

For costs and benefits that are per transaction, the volumes of transactions during the study period are based on the volumes in 2011. Volume data by carrier code for the year 2011 are retrieved from the CBSA databases.

Estimating unit costs and savings for cost/benefit categories

It is assumed that unit costs and savings for system upgrades, changes, maintenance, data transmission and data preparation depend on the volume of transactions of a business. A business with a high volume of transactions is assumed to process data using a computer system directly connected to the CBSA. A business with a low or medium volume of transactions is assumed to process and transmit data via the free eManifest Portal. Estimates for different levels of transaction volumes are obtained either from industry experts or from existing studies on similar regulations, either in Canada or abroad.

A detailed explanation of how each cost or benefit category is monetized and the assumptions related to all calculations can be found in Annex 1 to this document.

Overall costs and benefits

Based on the costs and benefits that are monetizable, it was estimated that the implementation of the regulatory proposal (Package 1) would result in a net benefit for businesses of $391 million, over a 12-year period from 2014 to 2025, mainly due to savings from reduced delays at the border and efficiency gained from replacing paper with electronic information. The breakdown of costs and benefits from the introduction of Package 1 for each stakeholder is presented in the following table:

Package 1, monetized costs and benefits

Package 1

2014

2015

2016

2025

Present value (2012)

Annualized average

Benefits

Marine carriers

696

696

696

696

5,165

650

Air carriers

0

0

0

0

0

0

Rail carriers

0

0

0

0

0

0

Highway carriers

51,700,182

53,330,165

55,011,537

72,741,363

446,584,644

56,225,895

Freight forwarders

0

0

0

0

0

0

Sufferance warehouses

0

0

0

0

0

0

Importers

0

0

0

0

0

0

Subtotal business benefits

51,700,878

53,330,861

55,012,233

72,742,059

446,589,809

56,226,545

Federal government (CBSA)

0

0

11,900,000

11,900,000

68,226,683

8,589,875

Total benefits

51,700,878

53,330,861

66,912,233

84,642,059

514,816,492

64,816,420

Costs

Marine carriers

251,123

289,354

249,689

244,749

1,874,574

236,013

Air carriers

369,232

88,838

86,592

69,325

845,968

106,509

Rail carriers

254,264

25,914

25,177

19,529

372,689

46,922

Highway carriers

11,749,717

6,123,510

6,310,619

8,363,464

56,304,184

7,088,809

Freight forwarders

0

−4,613

−909,906

−1,050,912

−5,568,217

−701,050

Sufferance warehouses

388,158

288,206

288,238

288,585

2,227,688

280,470

Importers

0

0

0

0

0

0

Subtotal business costs

13,012,494

6,811,209

6,050,409

7,934,740

56,056,886

7,057,673

Federal government (CBSA)

0

0

0

0

0

0

Total costs

13,012,494

6,811,209

6,050,409

7,934,740

56,056,886

7,057,673

Net benefits

(Business)

$390,532,923

$49,168,872

(All)

$458,759,606

$57,758,747

  • (1) Package 1 would be implemented in two phases, with the first phase planned to come into force in 2014 and the second phase in 2015. Package 2 is planned to come into force in 2015/2016.
  • (2) Present values and annualized values are calculated based on a discount rate of 7% over a 12-year period from 2014 (the year phase 1 of Package 1 would come into force) to 2025 (10 years after Package 2 would come into force) and then discounted to year 2012 in 2012 constant dollars.
  • (3) Negative costs are due to total savings from the elimination of paper document preparation exceeding total costs of electronic information preparation.
  • (4) The benefits to the CBSA and the Government of Canada represent net cost savings due to reallocation and better utilization of resources. The net costs/benefits for the interim years (2014 and 2015) before full implementation are estimated to be $0 as the status quo would be maintained; therefore, there would be no change in workload of current employees and no new hires.

The full implementation of the proposed eManifest initiative (i.e. both Packages 1 and 2) would result in a net benefit of $470 million ($377 million to the businesses and $93 million to the federal government), along with non-monetized benefits such as increased business efficiency and reduced security, health and safety risks to the Canadian public, over the 12-year period. The breakdown of costs and benefits from the introduction of both Packages 1 and 2, for each stakeholder, is presented in the following cost-benefit statement:

Cost-benefit statement

Packages 1 and 2 (All)

2014

2015

2016

2025

Present value (2012)

Annualized average

Benefits

Marine carriers

696

696

696

696

5,165

650

Air carriers

0

0

0

0

0

0

Rail carriers

0

0

155,729

258,693

1,129,906

142,257

Highway carriers

51,700,182

53,330,165

55,579,780

73,685,313

450,707,583

56,744,981

Freight forwarders

0

0

0

0

0

0

Sufferance warehouses

0

0

0

0

0

0

Importers

0

0

0

0

0

0

Subtotal business benefits

51,700,878

53,330,861

55,736,205

73,944,702

451,842,654

56,887,888

Federal government (CBSA)

0

0

16,215,000

16,215,000

92,966,022

11,704,607

Total benefits

51,700,878

53,330,861

71,951,205

90,159,702

544,808,676

68,592,495

Costs

Marine carriers

251,123

289,354

1,674,573

243,035

2,951,808

371,638

Air carriers

369,232

88,838

2,276,530

67,798

2,507,927

315,753

Rail carriers

254,264

25,914

19,871

–349,257

–1,089,574

–137,179

Highway carriers

11,749,717

6,123,510

9,480,479

8,324,110

58,561,372

7,372,993

Freight forwarders

0

–4,613

–833,537

–1,279,189

–6,815,419

–858,075

Sufferance warehouses

388,158

288,206

288,238

288,585

2,227,688

280,470

Importers

0

0

3,749,022

2,116,432

16,870,329

2,124,008

Subtotal business costs

13,012,494

6,811,209

16,655,176

9,411,514

75,214,131

9,469,608

Federal government (CBSA)

0

0

0

0

0

0

Total costs

13,012,494

6,811,209

16,655,176

9,411,514

75,214,131

9,469,608

Net benefits

(Business)

$376,628,523

$47,418,280

(All)

$469,594,545

$59,122,887

Qualitative impacts

Benefits

Canadian public

Increased health, safety and security of Canadians as they would be better protected from border-related risks due to the CBSA’s enhanced ability to assess risk and intercept high/unknown risk commercial cargo prior to arrival in Canada.

Businesses considered trade chain partners involved in the importation of goods into Canada

Automation and electronic information would lead to improved business efficiency through

  • streamlining of operations that involve shipping goods via multiple modes of transportation;
  • improvements in quality of information and efficiency of information retrieval; and
  • alignment with the U.S. electronic manifest process as closely as possible in terms of data elements and time frames required.

Pre-arrival risk assessment by the CBSA would lead to improved border crossing efficiency through

  • shorter border delays in all modes; and
  • more certainty in movement of low-risk shipments at border crossings.
  • (1) Package 1 would be implemented in two phases, with the first phase planned to come into force in 2014 and the second phase in 2015. Package 2 is planned to come into force in 2015/2016.
  • (2) Present values and annualized values are calculated based on a discount rate of 7% over a 12-year period from 2014 (the year phase 1 of Package 1 would come into force) to 2025 (10 years after Package 2 would come into force) and then discounted to year 2012 in 2012 constant dollars.
  • (3) Negative costs are due to total savings from the elimination of paper document preparation exceeding total costs of electronic information preparation.
  • (4) The benefits to the CBSA and the Government of Canada represent net cost savings due to reallocation and better utilization of resources. The net costs/benefits for the interim years (2014 and 2015) before full implementation are estimated to be $0 as the status quo would be maintained and therefore there would be no change in workload of current employees and no new hires.

The costs and benefits to businesses can also be broken down by cost and benefit categories. Estimates for Packages 1 and 2 are presented as follows:

Packages 1 and 2 (businesses only)

2014

2015

2016

2025

Present value (2012)

Annualized average

Costs

Compliance

IT system (system upgrades / changes and maintenance)

5,530,777

2,790,908

6,538,161

2,166,158

22,863,698

2,878,585

Waiting time to satisfy pre-notification requirement

12,116,935

12,594,044

13,089,940

18,530,607

108,798,758

13,697,980

Cost of electronic data transmissions

992,876

1,091,258

1,193,508

1,640,931

9,655,265

1,215,617

Offset by reduction in the use of paper and ink

−1,467,082

−1,623,419

−1,768,060

−2,466,222

–14,393,960

−1,812,228

Subtotal (Compliance)

126,923,761

15,979,954

Administration

Application

2,485

2,485

2,485

2,485

18,446

2,322

Cost of electronic data preparation

17,177,810

19,777,533

24,784,788

31,312,220

188,100,177

23,682,186

Offset by elimination of paper preparation

−24,139,189

−28,029,054

−30,295,004

−41,774,664

−244,813,491

−30,822,505

Learning/training

2,797,882

207,454

3,109,359

0

4,985,238

627,651

Subtotal (Administrative)

−51,709,630

−6,510,345

Subtotal (Costs)

75,214,132

9,469,609

Benefits

Administration

Elimination of application and maintenance of break-bulk exemption status

696

696

696

696

5,165

650

Indirect

Waiting time saved at the land border due to shorter processing time

51,700,182

53,330,165

55,735,509

73,944,006

451,837,490

56,887,238

Subtotal (Benefits)

451,842,655

56,887,889

Net benefits

$376,628,523

$47,418,280

For detailed calculations for each proposed regulatory requirement, please refer to the Cost-Benefit Analysis Report, which is available at the CBSA Web site: http://cbsa-asfc.gc.ca.

“One-for-One” Rule

The proposed amendments are subject to the “One-for-One” Rule, as they pertain to statutory instruments pursuant to the Statutory Instruments Act. This rule is used to control new administrative burden on businesses resulting from the introduction of regulations. To estimate the administrative burden for each stakeholder type and each proposed regulatory requirement, the third row of formula (1) as presented in Annex 1 is used. To estimate the administrative relief from the elimination of break-bulk exemption in the marine mode, formula (2) is used. The total administrative burden is then the sum of all administrative costs over all stakeholder types and all proposed regulatory requirements less the administrative relief from the elimination of break-bulk exemption.

The general approach to cost calculations for the “One-for-One” Rule is essentially the same as that for the cost-benefit analysis described in the “Benefits and costs” section above, with essentially the same assumptions used. However, to conform to the requirements of the Treasury Board Secretariat, some alternative assumptions were used. The differences in the assumptions used are explained in the attached Annex 2. Because of these differences, the estimates of administrative costs based on the cost-benefit analysis methodology will be different from the estimates based on the “One-for-One” Rule methodology.

Based on the “One-for-One” Rule methodology, it is estimated that the total administrative savings per year with the introduction of the proposed regulations in Packages 1 and 2 would be about $4.6 million per year (with 2012 constant dollars and a present value base year of 2012), resulting in an administrative saving per business of $26 per year (using simple averaging with an estimated 173 270 businesses affected). The expected decrease in administrative costs would stem mainly from paper processes being replaced by their electronic equivalents. The savings would mainly come from more efficient document (information) preparation and reduced errors and omissions due to the increasing use of information technology and the streamlining of business processes to handle electronic transmission of information, as described in the “Benefits and costs” section above. Therefore, the proposal is considered an “OUT” under the rule. An “OUT” is a monetized decrease in administrative burden costs from the revision of existing regulations.

Small business lens

The CBSA recognizes that small businesses would be impacted by the new reporting requirements. A small business is defined as any business, whether incorporated or not, with under 100 employees or between $30,000 and $5 million in annual revenues. Since revenue data is not readily available, the definition used in the cost-benefit analysis relates to businesses with fewer than 100 employees; the same definition was applied for the small business lens.

To estimate the direct costs (both compliance and administrative) carried by small businesses, for each stakeholder type and each proposed regulatory requirement, formula (1) as presented in Annex 1 is used. To estimate the administrative relief from the elimination of the break-bulk exemption in the marine mode, formula (2) is used. The total direct cost impact is then the sum of all direct costs over all stakeholder types and all proposed regulatory requirements less the administrative relief from the elimination of break-bulk exemption. Since the focus of the small business lens is on direct cost impacts, indirect benefits, such as cost savings due to the time saved at the border, are not included in the calculations.

The general approach to cost calculations for the small business lens is essentially the same as that in the “Benefits and costs” section above, with essentially the same assumptions used. However, to conform to the requirements of the Treasury Board Secretariat, some alternative assumptions are used. The differences in the assumptions used are explained in Annex 2.

Initial option

The initial option would have all businesses, including small businesses, paying to upgrade their systems in order to comply with the electronic reporting requirements of the CBSA. In the initial option, all businesses face the same reporting requirements and IT capability requirements to transmit pre-arrival information electronically to the CBSA. This would likely result in upfront capital and ongoing maintenance costs of IT upgrades.

Flexibility analysis

As small carriers and importers with infrequent shipments tend to be deemed higher risk, and given that the CBSA has much less information about them for risk assessment purposes, it would be counterproductive from a risk management perspective to provide regulatory flexibility for these businesses in terms of fewer data elements required or laxer time frames. Instead, the CBSA proposes to offer the free eManifest Portal for data transmission to help small businesses to alleviate the increased compliance costs.

Flexible option

The flexible option would allow businesses to access a free Internet portal to submit the required information electronically. In the flexible option, all businesses still face the same reporting requirements. However, the CBSA would provide the free eManifest Portal for highway carriers, freight forwarders and importers to transmit eManifest information to mitigate the upfront capital costs and ongoing maintenance costs of IT upgrades. With access to a computer and an Internet connection, smaller businesses would have a different option to send their advance data electronically free of charge, through the eManifest Portal.

The small business costs to be carried as a result of the full implementation of the proposed eManifest initiative (i.e. Packages 1 and 2) for each option are presented in the table below.

Implementation of eManifest — Initial Option vs. Flexible Option

All packages

Initial Option

Flexible Option

Short description

No Free eManifest Portal

Free eManifest Portal

Number of small businesses impacted

165 405

165 405

Annualized Average ($ 2012)

Present Value ($ 2012)

Annualized Average ($ 2012)

Present Value ($ 2012)

Compliance costs

$22,717,871

$180,440,927

$6,042,383

$47,992,751

Administrative costs

−$2,576,709

−$20,465,988

$884,982

$7,029,136

Total costs

$20,141,163

$159,974,938

$6,927,365

$55,021,887

Total costs per small business

$122

$967

$42

$333

Risk considerations

Small carriers and importers with infrequent shipments might have to carry substantial upfront capital costs and ongoing maintenance costs to upgrade their IT system for the electronic submission of required information.

This increase in compliance costs might not be fully offset by the efficiency gained (and the decrease in administrative costs) as a result of increased IT use.

This might discourage some of them from conducting cross-border business, especially in the highway mode where the majority of the carriers are small and owner-operated.

The CBSA bears the cost of developing the eManifest Portal for trade chain partners to transmit information free of charge.

Also, since a common eManifest Portal would be developed for businesses with a diverse array of practices, the opportunity of customization to streamline business processes and hence gain efficiency might be minimal for these businesses.

The initial option shows negative administrative costs, reflecting in large part more significant efficiency in data preparation time gained from investing more in the upgrades and changes of the IT system for electronic preparation and transmission of data. The flexible option shows positive administrative costs, reflecting the assumptions that (1) there are no savings in data preparation time by switching from paper to electronic processing; and (2) most small businesses would opt for the eManifest Portal due to the fact that their low volumes of transactions would not justify large investments in IT system upgrades or changes. However, the total costs under the initial option would still be greater than those under the flexible option. Given the difference in costs between the initial option and the flexible option, the flexible option is the recommended option.

Consultation

Private sector consultations

The CBSA established the eManifest Stakeholder Partnership Network (eSPN), made up of nearly two dozen industry associations and CBSA representatives, to provide a forum for dialogue and to help the CBSA reach out to all commercial trade chain partners. Regular consultations among eSPN subcommittees and working groups have been ongoing since 2007. Consultations covered defining requirements and identifying stakeholder needs, establishing processes and procedures, reviewing and resolving policy issues, mapping the technical design and implementation of eManifest, and sharing information and communication products.

The following stakeholders involved in the importation of goods into Canada would be affected by the proposed regulations, due to the requirement of having to provide pre-arrival information to the CBSA electronically: carriers, freight forwarders and sufferance warehouse operators.

Specific industry associations that have been extensively consulted as part of this proposal include the following:

  • Canadian International Freight Forwarders Association
  • Canadian Courier & Logistics Association
  • Canadian Produce Marketing Association
  • Canadian Society of Customs Brokers
  • Association of International Customs and Border Agencies
  • Canadian Association of Importers and Exporters
  • Canadian Manufacturers & Exporters
  • Canadian Sufferance Warehouse Association
  • Canadian Vehicle Manufacturers’ Association
  • Private Motor Truck Council of Canada
  • Shipping Federation of Canada
  • Chamber of Shipping of British Columbia

The eManifest initiative has also been discussed regularly at Border Commercial Consultative Committee meetings (BCCC) (see footnote 11) since 2006. The BCCC provides the CBSA and industry stakeholders with a forum for dialogue on border issues. The eManifest subcommittee of the BCCC includes representatives from the CBSA and members of 10 key trade associations. The Committee’s mandate is to work collaboratively to promote modernization and improvements to the Commercial Program under eManifest, validate strategic directions related to eManifest and other major projects intended to simultaneously enhance facilitation and security, and provide governance to the existing eManifest Stakeholder Partnership Network (eSPN) working groups.

Inputs from these consultations have also been taken into consideration to identify areas of business burdens and savings in the preparation of the cost-benefit statement for this document.

Private sector support

In general, stakeholders participating in the BCCC and the eSPN meetings have been very supportive of the goals of the eManifest initiative to secure the border and facilitate trade. For example, at the BCCC meeting on February 26 and 27, 2008, the industry representatives agreed unanimously that security and health issues must be addressed at the border. However, they also expressed their concern that traffic could be delayed for issues not related to security or health. At other meetings, some industry representatives expressed their eagerness for the eManifest initiative. For example, a representative from the rail industry stated that “the rail industry is keen to work on developing the eManifest initiative because it already communicates extensively with the CBSA via electronic means.”

Stakeholder feedback was also positive with respect to offsetting costs of new regulatory requirements with enhanced border efficiency (reduced wait times), reduced reliance on paper-based records and increased alignment with the requirements of other countries (chiefly the United States).

Major concerns and CBSA responses

Regarding the development of the system and the manner in which critical policy issues are addressed, throughout the consultation process, industry has been stressing the importance of stakeholder involvement and inclusiveness of and communication with the broader trade community. In response, from 2006 to 2012, the CBSA has held 21 meetings of the eSPN and 15 meetings of the BCCC at which the eManifest initiative was discussed.

A major concern of the industry that was frequently discussed was the burden of collecting the data and transmitting within the prescribed time frames. The various eSPN working groups provided the CBSA with platforms to discuss all proposed data elements and processes for each mode with the various participants. These discussions allowed the CBSA to better understand the business flow in the different modes and design the system and policy to better fit the logistics of the industry.

Another major concern raised by stakeholders was the cost impacts on small and medium-sized businesses. The discussions at consultation meetings led to the development of the eManifest Portal, which would be most beneficial to small and medium-sized businesses. In particular, stakeholder consultations related to the implementation and design of the eManifest Portal were held across Canada in 2008 and 2009, aiming to gauge the views of small and medium-sized businesses on the Portal option. These consultations revealed a need for and a positive reaction to the proposed Portal solution.

Many policy and system development issues of a more technical nature were raised at the meetings, and the CBSA has created a trade issue log, which is shared with the industry, to prioritize the issues in order to deal with them in a transparent and timely manner. It also provides the industry with the necessary information to move forward with its planning and preparation for eManifest.

Government consultations

The proposed regulatory amendments for eManifest would have no direct impact on other government departments (OGDs) such as the Canadian Food Inspection Agency (CFIA) and Foreign Affairs and International Trade Canada (DFAIT), as there are no planned changes under eManifest to the existing electronic or paper-based OGD processes. The proposed amendments deal primarily with the provision of pre-arrival information, which would be used by the CBSA to perform a risk assessment, related to the import of goods into Canada. OGD requirements related to the import of goods into Canada, e.g. the submission of permits and licenses, are part of a different process and would not be impacted by the proposed regulatory amendments. As a result, no formal consultations were conducted with OGD partners and no significant feedback was provided.

Although the proposed amendments do not directly impact OGDs, it should be noted that the eManifest initiative would support the broader Government of Canada objectives of reducing paper processes and paper burden (see footnote 12) and streamlining its processes to ensure consistency and transparency.

U.S. consultations

Extensive consultations have been conducted with the USCBP on the proposed amendments to ensure that pre-arrival information requirements and processes are aligned between Canada and the United States to the greatest extent possible. Goods which are destined for North America and which transit either through Canada or the United States prior to arrival at their ultimate destination are subject to each country’s information requirements.

For highway carriers, some of the IT system-related costs will be offset by investments they have already made in order to provide data electronically to the United States Customs and Border Protection (USCBP). Since 2007, an electronic manifest, which was the successor of the paper manifest, has been mandatory for shipments entering the United States. All trucks from Canada destined to the United States with freight on board are required to submit an electronic truck manifest before arriving at the border. Filing manifests electronically can be accomplished either by using a commercial software product or via the Internet through the Automated Commercial Environment (ACE) Secure Data Portal. Historically, carriers were required to file a paper manifest with the USCBP before a shipment entered the United States. Filing electronic manifests is now required at all land border ports in accordance with the Customs Border Security Act of 2002 (Trade Act of 2002) advance cargo rule.

In designing eManifest, the need to align with U.S. processes for the sake of common client requirements was an early priority, established with input from the eManifest Stakeholder Partnership Network (eSPN). Commonalities allow the carriers that built systems for ACE participation to modify those systems for CBSA eManifest purposes, avoiding the cost of building an entirely new system. Feedback from carrier clients currently transmitting for ACE confirms that their costs are lower due to the earlier USCBP mandated requirements.

The feedback from the USCBP on the eManifest initiative has been positive and no concerns have been raised.

Generally, all stakeholders consulted support the implementation of eManifest and the regulatory regime that would enforce it. The vast majority of stakeholders accept eManifest as a necessary and inevitable modernization of processes.

Furthermore, all stakeholders acknowledge the long-term benefits that eManifest would bring in terms of both security and facilitation.

Since all stakeholders have been aware of eManifest for several years and have been consulted extensively on its design, delivery and implementation, there are no outstanding issues or points of contention. However, as can be expected with the introduction of new electronic processes that replace long-standing manual processes, some industry sectors, such as highway carriers, will be more impacted by eManifest than others.  The CBSA has identified those stakeholders and is conducting ongoing consultations and outreach with them — both individually and in industry sector groups — in order to ensure a smooth transition and to mitigate any business impacts. The CBSA will continue to support these stakeholders as the eManifest initiative is implemented.

Regulatory cooperation

Given that the USCBP implemented electronic pre-arrival information in 2007, a solid base of technological and system knowledge has already been established by most highway carriers crossing the Canada–U.S. border. The USCBP provides an Automated Commercial Environment (ACE) Secure Data Portal (see footnote 13) that allows a Web-based method of submitting information, as well as Electronic Data Interchange (EDI) that allows the transmission of information to ACE through a direct connection, or by employing a third-party service provider. Carriers involved in Canada–U.S. trade have already been subjected to major expenditures in technology, training and personnel to meet the USCBP requirements.

In designing eManifest, the need to align processes with the United States for the sake of a common client approach was an early priority established with input from eSPN. Commonalities allow carriers that built systems for ACE participation to modify their systems for CBSA eManifest purposes, avoiding the cost of building an entirely new system. Feedback from carrier clients currently transmitting ACE confirms that costs would be minimal as a result of having implemented systems for ACE. Similarly to the USCBP, the CBSA introduced a Web-based portal, which is available to stakeholders free of charge.

The proposed amendments would also minimize procedural differences with international partners by ensuring that the CBSA is operating in a manner consistent with the World Customs Organization (WCO) Framework of Standards to Secure and Facilitate Global Trade.

Rationale

The proposed regulations are needed to ensure that, regardless of the mode of transportation, information about certain goods coming to Canada is provided electronically and in advance, and that the information is systematically and consistently reviewed. The proposed regulations would ensure that the CBSA receives information about shipments from all the trade chain partners involved in the trade continuum, thereby allowing the CBSA to verify data quality and integrity through matching and comparison. The proposed regulations would help the CBSA to push the border out by ensuring that goods coming to Canada are screened prior to their arrival in all modes, which would result in reduced border wait times and more predictability for traders at the border. The proposed regulations would modernize the way that the CBSA does business with the trade community and would ensure that commercial requirements in Canada remain consistent with its trading partners. Ultimately, the proposed regulations would save money and time for the trade community and the CBSA.

Although this proposal will involve initial costs to businesses, overall, any negative impacts would be minimal in comparison to the long-term benefits of the proposed amendments. For this reason, the CBSA anticipates that businesses involved in the importation of goods to Canada would be positively impacted by the proposed amendments.

Carriers in the air and marine modes of transport that have already implemented electronic systems under ACI and carriers in the rail mode that are already Electronic Data Interchange (EDI)-capable would be somewhat impacted by this proposal, as they may require changes or upgrades to their systems to meet eManifest requirements. For carriers in the highway mode and freight forwarders, this proposal would result in an evolution from paper documents to electronic information that may necessitate new equipment.

The proposed amendments would increase the CBSA’s ability to detect high-risk goods prior to their arrival in Canada. They would support an increase in security at border crossings, enhance border enforcement, reduce costs associated with border delays and improve the health, security and safety of Canadians. Therefore, it is expected that overall these proposed amendments represent a net benefit to Canadians, the CBSA and stakeholders.

Implementation, enforcement and service standards

Funding for eManifest was announced in Budget 2006. The CBSA started the development of the IT infrastructure necessary to support the eManifest initiative in 2007. The proposed regulatory amendments are designed to provide regulatory support for the full implementation of the eManifest initiative. The scope of the changes requires that the regulations be introduced by means of two separate packages of amendments to existing regulations. The amendments correspond to three implementation phases, each with additional requirements and with various coming into force dates aligning with CBSA eManifest system capabilities (Package 1 of regulatory amendments will encompass two coming into force dates — Phases 1 and 2 in 2014 and 2015, respectively, with Package 2 of amendments coming into force with Phase 3 in 2015/2016).

To assist stakeholders in adapting to the changes, for most of the regulatory requirements, there would be a voluntary period of several months before the coming into force date and a six-month period of $0.00 administrative monetary penalties after the coming into force date. Communications activities would be sustained prior to the voluntary period to encourage participation.

The implementation schedule is presented in the table below:

Event/Name

Expected Voluntary Period

Expected Coming Into Force Dates (in bold)

 

Start — System Available

End of Voluntary

Start — 6 Months Zero AMPs

End — Full AMPs Apply

Package 1 — Phase 1

• Amendments for highway (cargo and conveyance) system availability voluntary period

Now

Package 1 Phase 1 Coming into force date (P1P1 CIF)

   

• Amendments for highway (cargo and conveyance) Mandatory with 6 months zero-rated administrative monetary penalties period

   

P1P1 CIF

P1P1 CIF + 6 months

• Amendments for rail (cargo/conveyance and electronic arrival message) system availability voluntary period

Now

P1P1 CIF

   

• Amendments for rail (cargo/conveyance and electronic arrival message) Mandatory with 6 months zero-rated administrative monetary penalties period

   

P1P1 CIF

P1P1 CIF + 6 months

• Amendments for air and marine (electronic arrival message) system availability voluntary period

Now

P1P1 CIF

   

• Amendments for air and marine (electronic arrival message) Mandatory with 6 months zero-rated administrative monetary penalties period

   

P1P1 CIF

P1P1 CIF + 6 months

• Amendments to sufferance warehouse arrivals (release notification system) Mandatory with 6 months zero-rated administrative monetary penalties period

   

P1P1 CIF

P1P1 CIF + 6 months

• Amendments for carrier code requirements Mandatory with 6 months zero-rated administrative monetary penalties period

   

P1P1 CIF

P1P1 CIF + 6 months

Package 1 — Phase 2

• Amendments for freight forwarders (electronic house bills) system availability voluntary period

Now

June 30, 2014

 

 

• Amendments for freight forwarders (electronic house bills) Mandatory with 6 months zero-rated administrative monetary penalties period

 

July 1, 2014

Jan. 1, 2015

• Amendments for freight forwarders (supplementary cargo data) system availability voluntary period

Now

June 30, 2014

 

 

• Amendments for freight forwarders (supplementary cargo data) Mandatory with 6 months zero-rated administrative monetary penalties period

 

July 1, 2014

Jan. 1, 2015

• Amendments for bay plan system availability voluntary period

Now

June 30, 2014

 

 

• Amendments for bay plan Mandatory with 6 months zero-rated administrative monetary penalties period

 

July 1, 2014

Jan. 1, 2015

Package 2 — Phase 3

• Amendments for importers (advance trade data) [all modes] system availability voluntary period

2015

2016

 

 

• Amendments for importers (advance trade data) [all modes] Mandatory with 6 months zero-rated administrative monetary penalties period

 

2016

P2P3 CIF + 6 months

• Amendments for additional linking updates required for all modes system availability voluntary period

2015

2016

 

 

• Amendments for additional updates required for all modes Mandatory period begins

 

 

2016

P2P3 CIF + 6 months

While it is expected that the introduction of administrative monetary penalties specifically relating to eManifest would encourage stakeholders to comply with the proposed regulations, the CBSA would also put in place a new monitoring process to further help stakeholders to improve their compliance. The monitoring process would feature the use of a Performance Report Card to provide stakeholders with information concerning instances of non- compliance and to identify areas for improvement. Specifically, records of each stakeholder would be periodically reviewed by the CBSA, with a special focus on areas such as errors (e.g. incomplete, inaccurate or missing data) in the data elements they transmitted (e.g. shipper’s name and address, consignee’s name and address, description of goods, tractor’s plate) and submission outside prescribed time frames. The Performance Report Card would present non-compliance rates (percentage of errors and percentage of late submissions) for different areas of interest and would indicate whether there have been improvements from the last review. It is expected that the Performance Report Card would be utilized by stakeholders to adopt any procedural or systems changes required to ensure greater compliance with eManifest requirements. Monitoring of compliance will be ongoing, with the CBSA to follow up on identified non-compliance issues. Persistent non-compliance may be subject to additional measures (such as penalties) to ensure that the right information is provided at the right time, allowing accurate risk assessment and enabling the free flow of legitimate goods.

Performance measurement and evaluation

The CBSA is in the process of developing a performance measurement framework (PMF) for the eManifest Initiative, which would serve as an objective basis for collecting information related to the intended results of the Initiative. For the PMF, expected results to be achieved and specific outputs to be produced by the eManifest Initiative would be set out and related performance indicators, information sources, frequency of information availability and performance targets would be identified. Based on the PMF, the necessary performance measurement infrastructure would be put in place to collect relevant data on an ongoing basis. This data would be used to regularly assess the Initiative’s performance in terms of efficiency in management, effectiveness in achieving results, satisfaction of stakeholders and relevance to the CBSA and the Government of Canada priorities.

The CBSA would initiate work to identify relevant operational / output and outcome indicators, to examine existing data sources in order to identify data gaps and develop new data sources, if necessary. Data for the output and outcome indicators, where available, would be collected regularly to establish a baseline and measure the performance for future years by the incremental change from the baseline. The operational/output indicators would be presented on an ongoing basis as part of managing eManifest and the outcomes indicators would be presented annually to determine whether the eManifest Initiative is on track with respect to the intended results.

Furthermore, the CBSA Program Evaluation Division would conduct an evaluation of the eManifest Initiative to measure the extent to which the objectives set out for the Initiative are met and to which extent its impacts are still aligned with public needs and interests.

An evaluation was already carried out in 2011 to meet a Treasury Board Secretariat commitment for an evaluation in year three or four of the Initiative. The evaluation focused on significant activities and operational components undertaken in the early stages of implementation, as the eManifest Initiative is not yet complete and not yet mandatory in the highway and rail modes.

Multiple lines of evidence were incorporated into the evaluation, including a document and literature review, an analysis of operational and financial information, telephone surveys of highway carriers and third-party service providers, and interviews with internal and external stakeholders.

The final report of the evaluation study is available at the following CBSA Web site: http://cbsa-asfc.gc.ca/agency-agence/reports-rapports/ae-ve/2012/emi-ime-eng.html.

Another evaluation of the eManifest Initiative would be scheduled following the implementation of Phase 3 in 2015/2016. The evaluation would examine the two main issues of relevance and performance in accordance with the Treasury Board Secretariat Policy on Evaluation.

Contact

Janet Rumball
Director
Canada Border Services Agency
Advance Information and Programs Division
112 Kent Street, 10th Floor
Ottawa, Ontario
K1A 0L8

Annex 1

General formulas

Denote

Compliance costs
  • System upgrades/changes

by

C1U for upfront cost and
C1O for ongoing cost

  • System upgrades/changes (maintenance)

by

C2

  • Waiting time to satisfy pre-notification requirement

by

C3

  • Cost of electronic data transmission

by

C4

Administrative costs
  • Application

by

A1

  • Cost of electronic data preparation

by

A2

  • Learning/training

by

A3

Benefits
  • Reduction in the use of paper and ink

by

B1

  • Elimination of paper preparation

by

B2

  • Elimination of application and maintenance of break-bulk exemption status

by

B3

  • Waiting time saved at the land border due to shorter processing time

by

B4

Given the classification of the monetized costs and benefits as outlined in the “Cost and benefit categories” table in the “General approach to calculation of monetized costs and benefits” section, for each type of affected stakeholders and each regulatory requirement, the present value of the total cost that is calculated in the cost-benefit analysis is based on the following formula (1):

Detailed information can be found in the surrounding text.
where

Rows 1 and 2

=

Total compliance cost

Row 3

=

Total administrative cost

Detailed information can be found in the surrounding text.

=

Estimated unit compliance cost for category C* that is applicable to the stakeholder type and the regulatory requirement in year y

Detailed information can be found in the surrounding text.

=

Estimated unit administrative cost for category A* that is applicable to the stakeholder type and the regulatory requirement in year y

Detailed information can be found in the surrounding text.

=

Estimated unit benefit (cost offset) for category B* that is applicable to the stakeholder type and the regulatory requirement in year y

Detailed information can be found in the surrounding text.

=

Estimated number of affected firms, transactions, and truck trips for cost-benefit category * that is applicable to the stakeholder type and the regulatory requirement in year y

Detailed information can be found in the surrounding text.

=

Indicator variable which takes on value 1 if cost-benefit category * is applicable to the stakeholder type and the regulatory requirement and 0 otherwise

Detailed information can be found in the surrounding text.

=

Year that the regulatory requirement becomes effective

Detailed information can be found in the surrounding text.

=

Base year of the present value

Detailed information can be found in the surrounding text.

=

The tenth year after the full implementation of eManifest

Detailed information can be found in the surrounding text.

=

Discount rate

For the benefit of eliminating break-bulk exemption in the marine mode, the present value calculation is based on the following formula (2):

Detailed information can be found in the surrounding text.

where

Detailed information can be found in the surrounding text.

=

Estimated per firm savings from not being required to maintain its break-bulk exemption status in year y

Detailed information can be found in the surrounding text.

=

Estimated number of marine carriers maintaining the break-bulk exemption in year y

Detailed information can be found in the surrounding text.

=

Indicator variable which takes on value 1 if cost savings from not being required to maintain the break-bulk exemption status is applicable to the stakeholder type and 0 otherwise

Detailed information can be found in the surrounding text.

=

Year that break-bulk exemption requirement is eliminated

Detailed information can be found in the surrounding text.

=

Base year of the present value

Detailed information can be found in the surrounding text.

=

The tenth year after the full implementation of eManifest

Detailed information can be found in the surrounding text.

=

Discount rate

For the benefit of reduced delay at the border in each of the rail and highway modes, the present value calculation is based on the following formula (3):

Detailed information can be found in the surrounding text.

where

Detailed information can be found in the surrounding text.

=

Estimated per rail/truck trip cost savings due to shorter processing time at the land border in year y

Detailed information can be found in the surrounding text.

=

Estimated number of rail/truck trips benefitting from the shorter processing time at the border in year y

Detailed information can be found in the surrounding text.

=

Indicator variable which takes on value 1 if cost savings due to shorter processing time at the land border is applicable to the stakeholder type and 0 otherwise

Detailed information can be found in the surrounding text.

=

Year that the regulatory requirement becomes effective

Detailed information can be found in the surrounding text.

=

Base year of the present value

Detailed information can be found in the surrounding text.

=

The tenth year after the full implementation of eManifest

Detailed information can be found in the surrounding text.

=

Discount rate

The total benefit for each applicable stakeholder type as presented in the cost-benefit statement in this document is the sum of the benefits for the stakeholder type over all applicable proposed regulatory requirements.

Regarding the costs and benefits to the CBSA, the estimates of benefits to the CBSA are taken from various CBSA internal exercises that have projected net savings in staffing and operations and maintenance in the coming years due to different ongoing CBSA initiatives.

Annex 2

Monetizing costs and benefits

The unit costs incurred by the requirements in this regulatory proposal can broadly be classified into two categories: (1) equipment and service purchase costs and (2) time costs. For time costs, it can be further classified into (a) labour time costs and (b) costs of delays due to the one-hour pre-notification requirements in the highway mode.

In this analysis, valuation of equipment and service costs for the cargo and conveyance data requirements in the highway mode is mainly based on price quotes from industry experts. For other modes or other requirements, the results are extrapolated from highway estimates based on the relative sizes of the volumes of transactions between modes.

To calculate labour time costs, estimates of labour time required for preparing cargo and conveyance data in the highway mode are adapted from existing studies. Due to lack of data, for labour times in others mode or for other data requirements, estimates for the highway mode are extrapolated to other modes based on the relative data size for each data transmission. Given the labour times and the fact that the tasks that would be imposed are clerical in nature, valuation of labour time costs is based mainly on Statistics Canada’s figure for the average hourly salary of a clerk in Canada.

To calculate the delay costs due to one-hour pre-notification requirements, estimates of the length of delays are adapted from existing studies. Given the length of delays, valuation of delay costs is based on the value of truck delays adapted from existing studies. This cost affects both the driver’s time and truck in transit.

In this analysis, two categories of benefits will be monetized: (1) paper and ink savings and (2) time savings. For time savings, it can be further classified into (a) labour time savings due to the elimination of paper and (b) savings from reduced delays at the border to pre-arrival cargo and conveyance data in the highway mode (and for Package 2, in-transit data in the rail and highway modes).

To calculate paper and ink savings, the number of copies typically needed for a paper submission is estimated and the print cost per page is quoted.

To calculate labour time savings due to the elimination of paper, labour times for filling out paper documents have to be estimated. Based on existing studies on the U.S. Truck e-Manifest, the estimates that compare the labour time savings by switching from electronic to paper preparation are adapted. These results are extrapolated to other modes and other data requirements. Given that the labour times and the tasks that would be reduced are clerical in nature, valuation of labour time savings is based mainly on Statistics Canada’s figure for the average hourly salary of a clerk in Canada.

To calculate savings from reduced delays at the border due to pre-arrival electronic cargo and conveyance data requirements in the highway mode, estimates of the time saved at the border are adapted from existing studies. Given the time saved at the border, valuation of time savings is based on the value of truck delay.

Assumptions used in cost-benefit analysis

Related to all calculations

A1.1 The discount rate for calculating present values is assumed to be 7%, which is the recommended discount rate by the Treasury Board Secretariat. The costs and benefits are discounted to year 2012. All prices are in 2012 dollars.

A1.2 The time horizon of the analysis is from 2014, the year that proposed regulations in Package 1 Phase 1 become effective, to 2025, 10 years after the year that regulations in Package 2 Phase 3 become effective. This satisfies the Treasury Board Secretariat’s requirement that the time horizon cover at least 10 years after the regulations come into force.

A1.3 Since the number of affected businesses submitting customs documents to the CBSA has been declining from 2007 to 2011, to simplify calculations without underestimating the costs, it is assumed that there is no growth in the numbers of affected businesses over the study period.

A1.4 For each transaction type, the approximate volumes during the study period based on the number of submissions for its paper equivalent (or related transmissions) in 2011, which are then extrapolated to future years by assuming a constant growth rate equal to the annualized growth rate of the total volume (both domestic and foreign) of that type of transaction from 2007 to 2011.

A1.5 There is no reliable source for the number of truck trips in the highway mode for recent years except 2009. For the purposes of this analysis, the ratio of the number of shipments to the number of truck trips is assumed to be 1.526 and constant over the study period.

A1.6 Small businesses in this analysis are businesses with fewer than 100 employees. The number of small businesses for each client type is the difference between the overall number of businesses impacted and the number of medium/large businesses impacted for that client type. To determine the number of medium/large businesses for a client type, the following assumptions are made:

  • For each affected business type, the number of medium/large businesses impacted is the same as the number of medium/large businesses under the relevant North American Industry Classification System (NAICS) codes as determined by Statistics Canada. The NAICS is the system used by Statistics Canada to classify businesses in Canada into different industry groups.
  • Since the CBSA does not have employee numbers for individual carriers in its databases, the assumption that larger businesses have more customs submissions is applied to classify individual carriers into the medium/large business category.

A1.7 It is assumed that data preparation is carried out by a clerk as most tasks are clerical in nature. The average hourly pay rate for a clerk in Canada was approximately $24.85 in 2011.

A1.8 The cost (or cost avoided) of a truck being delayed at the border is the revenue that the driver and the truck could bring in under alternative use during the delay. The value of truck delay assumed by other studies on eManifest is $77.54 per hour. It includes costs that affect the driver’s time and the truck in transit.

Related to cost calculations

A2.1 It is assumed that paper preparation time is 1.5 times that of electronic data preparation time by firms using a third-party connectivity service. For businesses using a direct connection EDI system, the processing time is half the paper processing time. For businesses using the eManifest Portal, the electronic data preparation time is the same as paper.

A2.2 Different types of filing have different data sizes. Data preparation times and transmission costs are proportional to the data sizes of the filings. Doubling the data size would double the data preparation times and the transmission costs.

A2.3 It is assumed that the choice of data transmission method by a business depends on its volume of transactions. Based on the estimated costs of utilizing a direct EDI system, a third-party service and the eManifest Portal, the thresholds in terms of the numbers of transactions are determined for each alternative. The number of businesses adopting each alternative is then determined based on their estimated number of transactions.

A2.4 A full direct connection EDI system to satisfy the advance cargo and conveyance requirements for carriers in the highway mode is assumed to cost $25,000 and the yearly IT maintenance costs are assumed to be approximately 36% of the full system cost, i.e. $9,000. These costs are extrapolated to other modes based on volumes of cargo and conveyance transmissions for those modes. As for third-party services, it is assumed that the yearly set-up fee is $750 and that this cost is the same for all modes and all data requirements.

A2.5 It is assumed that in general, if a business already has a full system in place, the cost of enhancing the system to satisfy new data requirements is equal to one year of maintenance costs, and that there are no further ongoing maintenance costs.

A2.6 It is assumed that the cost of engaging the service of a third-party service provider to transmit data is $1/KB and that this cost is the same for all modes and data requirements.

A2.7 Based on similar studies, it is assumed that in general for each new policy requirement, 1 hour of procedural and software training is required at the clerical level for 50% of employees; if no system upgrades or changes are required, only 0.5 hour of procedural training is required. Based on Statistics Canada’s figures, the average number of employees is assumed to be 3.1 in a small business and 264.1 in a medium/large business.

Related to benefit calculations

A3.1 It is assumed that by switching from paper to electronic processing, labour time for data preparation would be cut by half, if a direct connection EDI system is used and by one third, if a third-party connectivity service is used; there would be no savings if the eManifest Portal is used.

A3.2 It is assumed that for cargo and conveyance data and house bill requirements (as is also the case for Package 2), their paper equivalents each consist of a 1-page paper form with 5 copies per submission.

A3.3 The printing cost of a page of form is assumed to be $0.05, which is with reference to the price quotes collected online from different business printing companies.

Differences in assumptions between the cost-benefit analysis and the “One-for-One” Rule

  • The mandatory time horizon of 10 years of forecasted impact time period (beginning in the year each regulation comes into force) is used for all proposed regulations. That is, A1.2 described in the benefits and costs section above does not apply.
  • For costs that involve per-transaction unit costs, there is no forecasting of trends in the volumes of transactions over the study period. That is, A1.4 described in the benefits and costs section above does not apply.

Differences in assumptions between the cost-benefit analysis and the small business lens

  • For costs that involve per-transaction unit costs, there is no forecasting of trends in the volumes of transactions over the study period. That is, A1.4 described in the benefits and costs section above does not apply.

Annex 3 — Small Business Lens Checklist

1. Name of the sponsoring regulatory organization:

Canada Border Services Agency

2. Title of the regulatory proposal:

Regulations Amending Certain Regulations Made Under the Customs Act

3. Is the checklist submitted with a RIAS for the Canada Gazette, Part I or Part II?

Checked checkbox Canada Gazette, Part I   Checkbox Canada Gazette, Part II

A. Small business regulatory design

I

Communication and transparency

Yes

No

N/A

1.

Are the proposed Regulations or requirements easily understandable in everyday language?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

2.

Is there a clear connection between the requirements and the purpose (or intent) of the proposed Regulations?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

3.

Will there be an implementation plan that includes communications and compliance promotion activities, that informs small businesses of a regulatory change and guides them on how to comply with it (e.g. information sessions, sample assessments, toolkits, Web sites)?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

4.

If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

II

Simplification and streamlining

Yes

No

N/A

1.

Will streamlined processes be put in place (e.g. through BizPaL, Canada Border Services Agency single window) to collect information from small businesses where possible?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

2.

Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

3.

Has the impact of the proposed Regulations on international or interprovincial trade been assessed?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

4.

If the data or information, other than personal information, required to comply with the proposed Regulations is already collected by another department or jurisdiction, will this information be obtained from that department or jurisdiction instead of requesting the same information from small businesses or other stakeholders? (The collection, retention, use, disclosure and disposal of personal information are all subject to the requirements of the Privacy Act. Any questions with respect to compliance with the Privacy Act should be referred to the department’s or agency’s ATIP office or legal services unit.)

Checkbox Checkbox Checked checkbox

Justification if answer is no or N/A:

The information required to comply with the proposed Regulations is not collected by another department or jurisdiction.

5.

Will forms be pre-populated with information or data already available to the department to reduce the time and cost necessary to complete them? (Example: When a business completes an online application for a licence, upon entering an identifier or a name, the system pre-populates the application with the applicant’s personal particulars such as contact information, date, etc., when that information is already available to the department.)

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

6.

Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

7.

Will reporting, if required by the proposed Regulations, be aligned with generally used business processes or international standards if possible?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

8.

If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

III

Implementation, compliance and service standards

Yes

No

N/A

1.

Has consideration been given to small businesses in remote areas, with special consideration to those that do not have access to high-speed (broadband) Internet?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

2.

If regulatory authorizations (e.g. licences, permits or certifications) are introduced, will service standards addressing timeliness of decision making be developed that are inclusive of complaints about poor service?

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Justification if answer is no or N/A:

3.

Is there a clearly identified contact point or help desk for small businesses and other stakeholders?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

B. Regulatory flexibility analysis and reverse onus

IV

Regulatory flexibility analysis

Yes

No

N/A

1.

Does the RIAS identify at least one flexible option that has lower compliance or administrative costs for small businesses in the small business lens section?

Examples of flexible options to minimize costs are as follows:

  • Longer time periods to comply with the requirements, longer transition periods or temporary exemptions;
  • Performance-based standards;
  • Partial or complete exemptions from compliance, especially for firms that have good track records (legal advice should be sought when considering such an option);
  • Reduced compliance costs;
  • Reduced fees or other charges or penalties;
  • Use of market incentives;
  • A range of options to comply with requirements, including lower-cost options;
  • Simplified and less frequent reporting obligations and inspections; and
  • Licences granted on a permanent basis or renewed less frequently.
Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

2.

Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, quantified and monetized compliance and administrative costs for small businesses associated with the initial option assessed, as well as the flexible, lower-cost option?

  • Use the Regulatory Cost Calculator to quantify and monetize administrative and compliance costs and include the completed calculator in your submission to TBS-RAS.
Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

3.

Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, a consideration of the risks associated with the flexible option? (Minimizing administrative or compliance costs for small businesses cannot be at the expense of greater health, security or safety or create environmental risks for Canadians.)

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

4.

Does the RIAS include a summary of feedback provided by small businesses during consultations?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

V

Reverse onus

Yes

No

N/A

1.

If the recommended option is not the lower-cost option for small businesses in terms of administrative or compliance costs, is a reasonable justification provided in the RIAS?

Checked checkbox Checkbox Checkbox

Justification if answer is no or N/A:

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 8.1(8) (see footnote a), sections 12 (see footnote b) and 12.1 (see footnote c), subsection 14(2), sections 22 (see footnote d) and 30 (see footnote e) and subsections 109.1(3) (see footnote f) and 164(1) (see footnote g) of the Customs Act (see footnote h), proposes to make the annexed Regulations Amending Certain Regulations Made Under the Customs Act.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Tracy Annett, Director, Cabinet, Parliamentary and Regulatory Affairs Division, Canada Border Services Agency, 191 Laurier Avenue West, 13th Floor, Ottawa, Ontario K1A 0L8.

Ottawa, February 6, 2014

JURICA ČAPKUN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING CERTAIN REGULATIONS MADE UNDER THE CUSTOMS ACT

PART 1

REPORTING OF IMPORTED GOODS REGULATIONS

1. (1) The definition “commercial goods” in section 2 of the Reporting of Imported Goods Regulations (see footnote 14) is replaced by the following:

“commercial goods” means goods that are or will be imported for sale or for any commercial, industrial, occupational, institutional or other similar use; (marchandises commerciales)

(2) Section 2 of the Regulations is amended by adding the following in alphabetical order:

“airport of arrival” means the customs office in Canada at which a carrier that operates an aircraft expects a report to be made under section 12 of the Act with respect to goods imported on board that aircraft; (aéroport d’arrivée)

“commercial driver” has the same meaning as in section 1 of the Presentation of Persons (2003) Regulations; (routier)

“courier” has the same meaning as in section 2 of the Persons Authorized to Account for Casual Goods Regulations; (messager)

“emergency conveyance” means a conveyance that is clearly marked for use for emergency purposes, such as a vehicle that is clearly marked as a fire-fighting or police vehicle or as an ambulance; (moyen de transport de secours)

“fishing vessel” has the same meaning as in section 2 of the Fisheries Act; (bateau de pêche)

“freight forwarder” means a person who, on behalf of one or more owners, importers, shippers or consignees of goods, causes specified goods to be transported by one or more carriers; (agent d’expédition)

“NAV CANADA” means the corporation that was incorporated as NAV CANADA on May 26, 1995 under Part II of the Canada Corporations Act; (NAV CANADA)

“port of arrival” means the customs office in Canada at which a carrier that operates a vessel expects a report to be made under section 12 of the Act with respect to goods imported on board that vessel; (port d’arrivée)

“specified goods” means commercial goods, goods that are or will be imported to Canada for a fee or empty cargo containers that are not for sale but does not include

  • (a) goods that will be released after they have been accounted for and all duties with respect to them have been paid under subsection 32(1) of the Act if
    • (i) the goods are or will be in the actual possession of a person arriving in Canada, or
    • (ii) the goods form or will form part of a person’s baggage and the person and the baggage arrive or will arrive in Canada on board the same conveyance,
  • (b) mail,
  • (c) commercial goods that are used in a repair that is made outside Canada to a conveyance that was built in Canada or in respect of which duties have been paid, if the repair is made as a result of an unforeseen contingency that occurs outside Canada and is necessary to enable the conveyance to return safely to Canada,
  • (d) a military conveyance as defined in subsection 18(1) of the Canadian Transportation Accident Investigation and Safety Board Act or goods that are transported on board that conveyance,
  • (e) an emergency conveyance or goods that are transported on board that conveyance, or
  • (f) a conveyance that returns to Canada immediately after being denied entry to the United States or goods that are transported on board that conveyance; (marchandises spécifiées)

2. Sections 2.1 to 4 of the Regulations are replaced by the following:

2.1 In these Regulations,

  • (a) a shipment for which a carrier is responsible consists of
    • (i) a specified good or collection of specified goods that is listed in a single bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of those goods by the carrier, or
    • (ii) a specified good that is an empty cargo container that is not for sale and that is transported by the carrier but is not listed in a bill of lading, waybill or similar document; and
  • (b) a shipment for which a freight forwarder is responsible consists of a specified good or collection of specified goods that is listed in a single bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of those goods.

TIME FOR REPORTING GOODS

3. Except as otherwise provided in these Regulations, all goods that are imported shall be reported under section 12 of the Act without delay after arrival in Canada.

3.1 Subject to sections 8 and 9, specified goods that are imported by water shall be reported under section 12 of the Act without delay after the vessel that is transporting them lands at a customs office following arrival in Canada.

3.2 Specified goods that are imported by air shall be reported under section 12 of the Act without delay after the aircraft that is transporting them is cleared by NAV CANADA to land at an airport following arrival in Canada.

MANNER OF REPORTING GOODS

4. Unless a person is required to report goods in writing under section 5 or is permitted to report them orally under that section or in writing under section 12, they shall report the goods to the Agency by electronic means in accordance with the technical requirements, specifications and procedures that are set out in the Electronic Commerce Client Requirements Document.

3. (1) Paragraph 5(1)(b) of the Regulations is replaced by the following:

  • (b) fishing vessels;

(2) Subsection 5(1) of the Regulations is amended by adding “and’’ at the end of paragraph (d) and by replacing paragraphs (e) and (f) with the following:

  • (e) goods in respect of which information has been given to the Agency under subsection 12.1(1) of the Act in the circumstances set out in subsection 22(1) or 23(1).

4. Section 6 of the Regulations is repealed.

5. The Regulations are amended by adding the following after section 7.1:

7.2 If goods are reported under section 12 of the Act by electronic means, the report is not required to be made at the nearest customs office designated for that purpose.

6. The portion of section 8 of the Regulations before paragraph (a) is replaced by the following:

8. Canadian-built commercial fishing vessels and duty-paid fishing vessels that are registered under the Canada Shipping Act, 2001 and that are imported during a fishing season may be reported at the close of that fishing season if the vessels do not, after last having been reported under section 9 of the Reporting of Exported Goods Regulations,

7. Sections 9 and 10 of the Regulations are replaced by the following:

9. (1) A vessel that is used on a day solely or principally to transport highway conveyances or passengers across international waters may be reported on that day after the vessel’s last trip.

(2) Subsection (1) does not apply if the vessel transports specified goods to Canada that are required to be reported by the person in charge of the vessel.

8. Sections 12 to 13.91 and the heading before section 14 of the Regulations are replaced by the following:

12. If a conveyance is unloaded in the circumstances set out in subsection 14(1) of the Act, the conveyance and the goods described in subsection 14(2) of the Act shall be reported under that subsection by telephone or other expedient means. The conveyance and goods shall then be reported under section 12 of the Act in writing or by electronic means without delay.

INFORMATION REQUIRED — TRANSPORT OF SPECIFIED GOODS

MARINE MODE

13. (1) If specified goods will be transported to Canada by vessel, the carrier that operates the vessel is required under subsection 12.1(1) of the Act to give the Agency

  • (a) the information set out in Part 1 of Schedule 1; and
  • (b) for each shipment for which the carrier is responsible, the information set out in Part 1 of Schedule 2 in connection with the vessel and the goods in the shipment.

(2) Despite subsection (1), the carrier is not required to give the information if

  • (a) the vessel will arrive in Canada directly from the United States or Mexico;
  • (b) every importer of the specified goods is a CSA importer;
  • (c) the carrier is a CSA carrier;
  • (d) every importer of the specified goods has given written instructions to the carrier to submit a request to the Agency for the release of those goods under paragraph 32(2)(b) of the Act; and
  • (e) no federal or provincial Act or regulation requires that a permit, licence or similar document be provided to the Agency before any of the specified goods are released.

14. (1) The carrier shall give the Agency the information set out in Part 1 of Schedule 1

  • (a) at least 96 hours before the vessel is scheduled to arrive at its port of arrival if there is a cargo container on board the vessel; and
  • (b) at least 24 hours before the vessel is scheduled to arrive at its port of arrival in any other case.

(2) Despite subsection (1), if the vessel will arrive in Canada directly from the United States or Puerto Rico and all of the shipments for which the carrier is responsible were loaded onto it in the United States or Puerto Rico, the carrier shall give the information

  • (a) at least four hours before the vessel is scheduled to arrive at its port of arrival if all of those shipments consist of empty cargo containers that are not for sale; and
  • (b) at least 24 hours before the vessel is scheduled to arrive at its port of arrival in any other case.

(3) Despite subsections (1) and (2), the carrier shall give the information before or at the time the vessel leaves the last foreign port before its arrival in Canada if the duration of the voyage from that foreign port to the vessel’s port of arrival is less than the period within which the information would otherwise be given.

15. (1) The carrier shall give the Agency the information set out in Part 1 of Schedule 2

  • (a) at least 24 hours before the shipment is loaded onto the vessel if all or part of the shipment is in a cargo container or if the shipment consists of one or more empty cargo containers that are for sale;
  • (b) at least 24 hours before the vessel is scheduled to arrive at its port of arrival if the shipment consists of either bulk goods or break-bulk goods; and
  • (c) at least 96 hours before the vessel is scheduled to arrive at its port of arrival if the shipment consists of an empty cargo container that is not for sale.

(2) Despite subsection (1), if the vessel will arrive in Canada directly from the United States or Puerto Rico and the shipment was loaded onto it in the United States or Puerto Rico, the carrier shall give the information

  • (a) at least four hours before the vessel is scheduled to arrive at its port of arrival if the shipment consists of an empty cargo container that is not for sale; and
  • (b) at least 24 hours before the vessel is scheduled to arrive at its port of arrival in any other case.

(3) Despite paragraphs (1)(b) and (c) and subsection (2), the carrier shall give the information before or at the time the vessel leaves the last foreign port before its arrival in Canada if the duration of the voyage from that foreign port to the vessel’s port of arrival is less than the period within which the information would otherwise be given.

AIR MODE

16. (1) If specified goods will be transported to Canada by aircraft, the carrier that operates the aircraft is required under subsection 12.1(1) of the Act to give the Agency

  • (a) the information set out in Part 2 of Schedule 1; and
  • (b) for each shipment for which the carrier is responsible, the information set out in Part 2 of Schedule 2 in connection with the aircraft and the goods in the shipment.

(2) Despite subsection (1), the carrier is not required to give the information if

  • (a) the aircraft will arrive in Canada directly from the United States or Mexico;
  • (b) every importer of the specified goods is a CSA importer;
  • (c) the carrier is a CSA carrier;
  • (d) every importer of the specified goods has given written instructions to the carrier to submit a request to the Agency for the release of those goods under paragraph 32(2)(b) of the Act; and
  • (e) no federal or provincial Act or regulation requires that a permit, licence or similar document be provided to the Agency before any of the specified goods are released.

(3) Despite subsection (1), the carrier is not required to give the information set out in Part 2 of Schedule 2 for a shipment if it consists of goods that the carrier will transport as or on behalf of a courier and those goods will be released under subsection 32(4) of the Act before the accounting required under subsection 32(1) of the Act and the payment of duties.

17. The carrier shall give the Agency the information no later than four hours before the aircraft is scheduled to arrive at its airport of arrival or, if the duration of the flight to Canada is less than four hours, no later than the aircraft’s time of departure.

HIGHWAY MODE

18. (1) If specified goods will be transported to Canada by a highway conveyance, the carrier that operates the conveyance is required under subsection 12.1(1) of the Act to give the Agency

  • (a) the information set out in Part 3 of Schedule 1; and
  • (b) for each shipment for which the carrier is responsible, the information set out in Part 3 of Schedule 2.

(2) Despite subsection (1), the carrier is not required to give the information if

  • (a) the conveyance will arrive in Canada directly from the United States or Mexico;
  • (b) every importer of the specified goods is a CSA importer;
  • (c) the carrier is a CSA carrier and the person in charge of the conveyance is a commercial driver who holds an authorization under section 6.2 or 6.21 of the Presentation of Persons (2003) Regulations;
  • (d) every importer of the specified goods has given written instructions to the carrier to submit a request to the Agency for the release of those goods under paragraph 32(2)(b) of the Act; and
  • (e) no federal or provincial Act or regulation requires that a permit, licence or similar document be provided to the Agency before any of the specified goods are released.

(3) Despite subsection (1), the carrier is not required to give the information set out in Part 3 of Schedule 2 for a shipment if

  • (a) it consists of goods that the carrier will transport as or on behalf of a courier and those goods will be released under subsection 32(4) of the Act before the accounting required under subsection 32(1) of the Act and the payment of duties;
  • (b) it consists of an empty cargo container that is not for sale;
  • (c) it is listed in an air bill of lading, air waybill or similar document that is issued by a carrier and that relates to the carriage of the shipment to Canada by air but it will arrive in Canada on board the highway conveyance;
  • (d) the highway conveyance that transports the shipment will travel from a place in the United States through Canada to another place in the United States and no specified good will be unloaded from the conveyance in Canada; or
  • (e) the highway conveyance that transports the shipment will travel from a place in Canada through the United States to another place in Canada and no specified good will be unloaded from the conveyance in the United States.

19. The carrier shall give the Agency the information at least one hour before the highway conveyance arrives in Canada.

RAIL MODE

20. (1) If specified goods will be transported to Canada by a rail conveyance, the carrier that operates the conveyance is required under subsection 12.1(1) of the Act to give the Agency

  • (a) the information set out in Part 4 of Schedule 1; and
  • (b) for each shipment for which the carrier is responsible, the information set out in Part 3 of Schedule 2.

(2) Despite subsection (1), the carrier is not required to give the information if

  • (a) the conveyance will arrive in Canada directly from the United States or Mexico;
  • (b) every importer of the specified goods is a CSA importer;
  • (c) the carrier is a CSA carrier;
  • (d) every importer of the specified goods has given written instructions to the carrier to submit a request to the Agency for the release of those goods under paragraph 32(2)(b) of the Act; and
  • (e) no federal or provincial Act or regulation requires that a permit, licence or similar document be provided to the Agency before any of the specified goods are released.

(3) Despite subsection (1), the carrier is not required to give the information set out in Part 3 of Schedule 2 for a shipment if

  • (a) it consists of goods that the carrier will transport as or on behalf of a courier and those goods will be released under subsection 32(4) of the Act before the accounting required under subsection 32(1) of the Act and the payment of duties;
  • (b) it consists of an empty cargo container that is not for sale;
  • (c) the rail car that carries the shipment will travel from a place in the United States through Canada to another place in the United States and no specified good will be unloaded from it in Canada; or
  • (d) the rail car that carries the shipment will travel from a place in Canada through the United States to another place in Canada and no specified good will be unloaded from it in the United States.

21. The carrier shall give the Agency the information at least two hours before the rail conveyance arrives in Canada.

INFORMATION REQUIRED — OTHER CIRCUMSTANCES

22. (1) If a marine pleasure craft will arrive in Canada with no specified goods on board and the person in charge of the marine pleasure craft is authorized to present themselves in the alternative manner described in paragraph 11(e) of the Presentation of Persons (2003) Regulations, that person is required under subsection 12.1(1) of the Act to give the Agency the time and place at which the marine pleasure craft is scheduled to land following arrival in Canada and a description of all of the goods carried on board, including their value and quantity.

(2) The person in charge of the marine pleasure craft shall give the information by telephone to an officer at a designated customs office at least 30 minutes but no more than four hours before the marine pleasure craft arrives in Canada.

(3) The person in charge of the marine pleasure craft shall, before it arrives in Canada, notify an officer at a designated customs office by telephone of any change to the information given unless there are emergency circumstances, in which case they shall notify an officer at a designated customs office of the change, and explain the circumstances, by telephone when the marine pleasure craft arrives in Canada.

23. (1) If a corporate aircraft or private aircraft will arrive in Canada with no specified goods on board and the person in charge of the aircraft is authorized to present themselves in an alternative manner described in paragraph 11(b) or (c) of the Presentation of Persons (2003) Regulations, that person is required under subsection 12.1(1) of the Act to give the Agency the time and place at which the aircraft is scheduled to land following arrival in Canada and a description of all of the goods carried on board, including their value and quantity.

(2) The person in charge of the aircraft shall give the information by telephone to an officer at a designated customs office at least two but no more than 48 hours before the aircraft arrives in Canada.

(3) The person in charge of the aircraft shall, before it arrives in Canada, notify an officer at a designated customs office by telephone of any change to the information given unless there are emergency circumstances, in which case they shall notify an officer at a designated customs office of the change, and explain the circumstances, by telephone when the aircraft arrives in Canada.

24. (1) If a highway conveyance that is ordinarily used to transport specified goods to or from Canada will arrive in Canada with no specified goods on board, the carrier that operates the conveyance is required under subsection 12.1(1) of the Act to give the Agency the information set out in Part 3 of Schedule 1.

(2) Despite subsection (1), the carrier is not required to give the information if

  • (a) the conveyance is a tractor that is not towing a trailer; or
  • (b) the carrier is a CSA carrier and the person in charge of the conveyance is a commercial driver who holds an authorization under section 6.2 or 6.21 of the Presentation of Persons (2003) Regulations.

(3) The carrier shall give the information at least one hour before the highway conveyance arrives in Canada.

25. (1) If a rail conveyance that is ordinarily used to transport specified goods to or from Canada will arrive in Canada with no specified goods on board and either with no rail car or with all of its rail cars empty, the carrier that operates the conveyance is required under subsection 12.1(1) of the Act to give the Agency the information set out in Part 4 of Schedule 1.

(2) The carrier shall give the information at least two hours before the rail conveyance arrives in Canada.

26. (1) If a rail conveyance that is ordinarily used to transport specified goods to or from Canada will arrive in Canada, a crew member on board the conveyance who will have goods in their actual possession or that form part of their baggage on arrival in Canada is required under subsection 12.1(1) of the Act to give the Agency the time and place at which the conveyance is scheduled to arrive in Canada.

(2) The crew member shall give the information by radio or telephone to the chief officer of customs at the place at which the rail conveyance is scheduled to arrive in Canada at least two hours before it arrives.

27. (1) If a vessel, aircraft or rail conveyance is or will be used to transport 30 or more persons to Canada other than on a regular schedule or predetermined charter schedule, the carrier that operates the conveyance is required under subsection 12.1(1) of the Act to give the Agency the following information:

  • (a) in the case of a vessel, the time and place at which it is scheduled to land following arrival in Canada;
  • (b) in the case of an aircraft, the time and place at which it is scheduled to land following arrival in Canada; and
  • (c) in the case of a rail conveyance, the time and place at which it is scheduled to arrive in Canada.

(2) Despite paragraphs (1)(a) and (b), the carrier is not required to give the information when the person in charge of the conveyance is required to give it in the circumstances set out in subsection 22(1) or 23(1).

(3) The carrier shall give the information in writing to the chief officer of customs at the place referred to in paragraph (1)(a), (b) or (c), as the case may be, at least 72 hours before the conveyance arrives in Canada.

GENERAL PROVISION REGARDING TIME FOR GIVING INFORMATION BEFORE ARRIVAL

28. For greater certainty, nothing in any of sections 13 to 27 permits a person to give information to the Agency under subsection 12.1(1) of the Act on or after the arrival of the conveyance in Canada.

MANNER OF GIVING INFORMATION BEFORE ARRIVAL

29. A person that is required to give information to the Agency under subsection 12.1(1) of the Act in the circumstances set out in section 13, 16, 18, 20, 24 or 25 shall give the Agency the information by electronic means in accordance with the technical requirements, specifications and procedures that are set out in the Electronic Commerce Client Requirements Document.

CORRECTIONS

30. A person that gives information to the Agency under subsection 12.1(1) of the Act in the circumstances set out in section 13, 16, 18, 20, 24 or 25 shall, if they become aware that the information is inaccurate or incomplete, notify the Agency without delay by electronic means of a change to that information.

CARRIER CODE

31. The requirements and conditions that are to be met before the Minister may issue a carrier code are the following:

  • (a) if the application is for a carrier code that would be held by the applicant as a carrier in connection with a mode of conveyance,
    • (i) the applicant does not already hold a carrier code as a carrier in connection with that mode of conveyance,
    • (ii) if a carrier code previously held by the applicant as a carrier in connection with that mode of conveyance was cancelled, the matter that gave rise to the cancellation has been corrected, and
    • (iii) the applicant expects to operate at least one conveyance of that mode that would ordinarily be used to transport specified goods to or from Canada; and
  • (b) if the application is for a carrier code that would be held by the applicant as a freight forwarder,
    • (i) the applicant does not already hold a carrier code as a freight forwarder,
    • (ii) if a carrier code previously held by the applicant as a freight forwarder was cancelled, the matter that gave rise to the cancellation has been corrected, and
    • (iii) the applicant expects to cause specified goods to be transported to Canada.

32. A person that holds a carrier code shall notify the Agency without delay of

  • (a) a change to the information that is given in the application for the carrier code;
  • (b) a merger or amalgamation with another person that holds a carrier code; or
  • (c) the cessation of a business activity to which the carrier code relates.

33. (1) The circumstances in which the Minister may suspend a carrier code held by a person are the following:

  • (a) the person contravenes
    • (i) a provision of a federal Act or regulation if the provision relates to the importation or exportation of goods,
    • (ii) the Immigration and Refugee Protection Act or a regulation made under it, or
    • (iii) the Proceeds of Crime (Money Laundering) and Terrorist Financing Act or a regulation made under it;
  • (b) the person fails to pay an amount that is payable under the Act; or
  • (c) the person provided false or misleading information in the application for the carrier code.

(2) The Minister shall notify the person that holds the carrier code without delay and in writing of the suspension of the carrier code, the period during which the suspension applies and the reasons for the suspension.

(3) The person may make representations to the Minister within the period of suspension as to why the carrier code should be reinstated.

(4) The Minister may reinstate a carrier code that is suspended under subsection 12.1(5) of the Act only if the matter that gave rise to the suspension has been corrected during the period of suspension.

34. (1) The circumstances in which the Minister may cancel a carrier code held by a person are the following:

  • (a) the matter that gave rise to a suspension has not been corrected within the period of suspension;
  • (b) the person has ceased all business activities to which the carrier code relates;
  • (c) the person holds more than one carrier code as a carrier in connection with a particular mode of conveyance;
  • (d) the person holds more than one carrier code as a freight forwarder;
  • (e) the carrier code was issued before the coming into force of subsection 12.1(4) of the Act and the person holds it in a capacity other than that of a carrier or a freight forwarder, such as an agent or a person in charge of a conveyance; or
  • (f) the person requests the cancellation.

(2) Before cancelling a carrier code, the Minister shall send written notice of the proposed cancellation and the reasons for it to the last known address of the person that holds the carrier code and, unless the carrier code is being cancelled in the circumstances set out in paragraph (1)(e) or (f), shall give the person the opportunity to make representations in writing as to why the carrier code should not be cancelled.

(3) The cancellation of a carrier code is not effective until the earlier of

  • (a) 30 days after the day on which the person that holds the carrier code receives the notice, and
  • (b) 45 days after the day on which the notice is sent.

35. The following persons are exempted from holding a valid carrier code:

  • (a) a person in charge of a marine pleasure craft in the circumstances set out either in subsection 22(1) or in subsection 17(1) of the Presentation of Persons (2003) Regulations;
  • (b) a person in charge of a corporate aircraft or private aircraft in the circumstances set out either in subsection 23(1) or in subsection 15(1) of the Presentation of Persons (2003) Regulations;
  • (c) a crew member of a rail conveyance that is ordinarily used to transport specified goods to or from Canada in the circumstances set out in subsection 26(1);
  • (d) a carrier that operates a vessel, aircraft or rail conveyance in the circumstances set out in subsection 27(1); and
  • (e) a person in charge of a non-commercial passenger conveyance in the circumstances set out in subsection 4(1) of the Presentation of Persons (2003) Regulations.
LIABILITY FOR DUTIES ON GOODS REPORTED

9. Section 14 of the Regulations, enacted by SOR/86-873, is renumbered as section 36 and is repositioned accordingly.

10. Schedule 1 to the Regulations is amended by replacing the references after the heading “SCHEDULE 1” with the following:

(Paragraph 13(1)(a), subsection 14(1), paragraphs 16(1)(a), 18(1)(a) and 20(1)(a) and subsections 24(1) and 25(1))

11. The heading “PARTIE I” in Schedule 1 to the French version of the Regulations is replaced by “PARTIE 1”.

12. Item 8 of Part 1 of Schedule 1 to the Regulations is replaced by the following:

8. Carrier code

13. Item 5 of Part 2 of Schedule 1 to the Regulations is replaced by the following:

5. Carrier code

14. Schedule 1 to the Regulations is amended by adding the following after Part 2:

PART 3

HIGHWAY MODE
  1. Conveyance reference number — Number assigned by the carrier, beginning with its carrier code, to identify the trip to Canada by the highway conveyance
  2. Code provided by the Agency to identify the customs office in Canada at which the carrier expects a report to be made under section 12 of the Act with respect to goods transported on board the conveyance (see reference a)
  3. Estimated date and time of arrival of the conveyance in Canada
  4. Code provided by the Agency to identify the mode of conveyance (see reference a)
  5. Code provided by the Agency to indicate whether the conveyance is empty or loaded (see reference a)
  6. Licence plate number of the conveyance and the country and province or state of issue
  7. Licence plate number of each trailer and the country and province or state of issue
  8. Seal numbers, if any, for each cargo container on board the conveyance
  9. Manifest summary list — List of all of the primary cargo control numbers (the number assigned by the carrier, beginning with its carrier code, to a bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of specified goods on board the conveyance)

Reference a
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

PART 4

RAIL MODE
  1. Conveyance reference number — Number assigned by the carrier, beginning with its carrier code, to identify the trip to Canada by the rail conveyance
  2. Code provided by the Agency to identify the customs office in Canada at which the carrier expects a report to be made under section 12 of the Act with respect to goods transported on board the conveyance (see reference b)
  3. Estimated date and time of arrival of the conveyance in Canada
  4. Code provided by the Agency to identify the mode of conveyance (see reference b)
  5. Codes provided by the Agency to indicate whether the conveyance and each rail car that is part of the conveyance are empty or loaded (see reference b)
  6. Number assigned by the carrier that identifies each locomotive
  7. Number assigned by the carrier that identifies each rail car
  8. Number that identifies each cargo container on board the conveyance
  9. Manifest summary list — List of all of the primary cargo control numbers (the number assigned by the carrier, beginning with its carrier code, to a bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of specified goods on board the conveyance)

Reference b
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

15. Schedule 2 to the Regulations is amended by replacing the references after the heading “SCHEDULE 2” with the following:

(Paragraph 13(1)(b), subsection 15(1), paragraph 16(1)(b), subsection 16(3), paragraph 18(1)(b), subsection 18(3), paragraph 20(1)(b) and subsection 20(3))

16. The heading “CARGO DATA” in Schedule 2 to the English version of the Regulations is replaced by “DATA RELATING TO CARGO”.

17. Item 12 of Part 1 of Schedule 2 to the Regulations is replaced by the following:

12. Carrier code

18. Item 5 of Part 2 of Schedule 2 to the Regulations is replaced by the following:

5. Carrier code

19. Schedule 2 to the Regulations is amended by adding the following after Part 2:

PART 3

HIGHWAY AND RAIL MODES
  1. Code provided by the Agency to identify the movement of the shipment (see reference c)
  2. Cargo control number — Number assigned by the carrier, beginning with its carrier code, to identify the shipment
  3. Code provided by the Agency to indicate every condition that applies to the carriage of the shipment and that is listed in the bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of the shipment (see reference c)
  4. Manifest quantity and qualifier — Number and nature of pieces indicated on the bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of the shipment
  5. Code provided by the Agency to identify the mode of conveyance (see reference c)
  6. In the case of a shipment that was transported by vessel from a location outside Canada or the United States to a port in the United States and that will then be transported by a highway conveyance or a rail conveyance from the United States to Canada without passing through any other country, the ocean bill of lading number (the number assigned by the carrier that operated the vessel to the bill of lading, waybill or similar document that was issued by that carrier and that relates to the carriage of the shipment on board the vessel)
  7. Estimated date of arrival of the conveyance in Canada
  8. Foreign address where the shipment is transferred to the carrier that will transport it to Canada, if that address is different from the shipper’s address
  9. Foreign address where the shipment is loaded onto the conveyance that will transport it to Canada
  10. If a cargo container contains all or part of the shipment or is an empty cargo container that is for sale,
    • (a) the number that identifies the cargo container,
    • (b) the number assigned by the carrier that describes its size and type, and
    • (c) the seal numbers for it, if any
  11. Consolidation indicator that indicates whether the shipment consists of more than one shipment for which a freight forwarder is responsible (see reference c)
  12. Description of the goods in the shipment
  13. The Customs Tariff item number that applies to each good in the shipment
  14. Each UN number listed in column 1 of Schedule 1 to the Transportation of Dangerous Goods Regulations that applies to a good in the shipment
  15. Weight of the shipment and unit of measurement
  16. Name and address of the shipper of the shipment
  17. Name and address of the consignee of the shipment, every delivery address and name of every person to be notified, as indicated on the bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of the shipment
  18. Customs Self-Assessment (CSA) indicator that indicates whether the importer of the shipment has given written instructions to the carrier to submit a request to the Agency under paragraph 32(2)(b) of the Act for its release and, if so, the importer’s business number (see reference c)
  19. Code provided by the Agency to identify the customs office in Canada at which the carrier expects a report to be made under section 12 of the Act with respect to goods transported on board the conveyance (see reference c)
  20. Code provided by the Agency to identify the location where the shipment will be unloaded from the conveyance in Canada (see reference c)
  21. Location where the release of the shipment will be sought
  22. Description of all markings on the outer packaging of the shipment, if any

Reference c
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

TRANSPORTATION OF GOODS REGULATIONS

20. (1) Paragraph 7(1)(a) of the Transportation of Goods Regulations (see footnote 15) is replaced by the following:

  • (a) in the case of goods transported to Canada, a copy of any report that is made in writing or by electronic means under section 12 of the Act; and

(2) Paragraph 7(2)(a.1) of the Regulations is replaced by the following:

  • (a.1) records by means of which the CSA carrier receives the instructions referred to in paragraph 13(2)(d), 16(2)(d), 18(2)(d) or 20(2)(d) of the Reporting of Imported Goods Regulations;

(3) Subsection 7(3) of the Regulations is replaced by the following:

(3) In addition to the records described in subsection (1), for the purposes of section 22 of the Act, a person referred to in that section is required to keep the original or a copy of the following records:

  • (a) records by means of which the person gives the Agency information under subsection 12.1(1) of the Act in the circumstances set out in section 13, 16, 18, 20, 24 or 25 of the Reporting of Imported Goods Regulations;
  • (b) records by means of which the person notifies the Agency of a change to information under section 30 of those Regulations; and
  • (c) any acknowledgement of receipt of that information or that change to information received from the Agency.
CUSTOMS SUFFERANCE WAREHOUSES REGULATIONS

21. Section 14 of the Customs Sufferance Warehouses Regulations (see footnote 16) is replaced by the following:

14. (1) Every licensee shall acknowledge the receipt of goods in the sufferance warehouse by electronic means.

(2) However, if the goods were transported to Canada by or on behalf of a courier and will be released under subsection 32(4) of the Act before the accounting required under subsection 32(1) of the Act and the payment of duties, the licensee shall acknowledge the receipt of the goods in the sufferance warehouse by

  • (a) endorsing the bill of lading, waybill or similar document presented by the carrier;
  • (b) endorsing the customs document on which the goods were reported under the Reporting of Imported Goods Regulations; or
  • (c) issuing a transfer document to the carrier.

(3) For the purposes of subsection (2), “courier” has the same meaning as in section 2 of the Persons Authorized to Account for Casual Goods Regulations.

DESIGNATED PROVISIONS (CUSTOMS) REGULATIONS

22. Part 1 of Schedule 1 to the Designated Provisions (Customs) Regulations (see footnote 17) is amended by adding the following after item 8:

Item

Column 1
Designated Provision

Column 2
Short-form Description

8.1

12.1(2)

Failing to hold a valid carrier code

8.2

12.1(7)

Failing to comply with a notification

23. Item 6 of Part 4 of Schedule 1 to the Regulations is replaced by the following:

Item

Column 1
Designated Provision

Column 2
Short-form Description

6.

14(1)

Failing to acknowledge receipt of goods by electronic means

6.1

14(2)

Failing to acknowledge receipt of goods in the prescribed manner

24. Part 7.1 of Schedule 1 to the Regulations is replaced by the following:

PART 7.1

REPORTING OF IMPORTED GOODS REGULATIONS

Item

Column 1

Designated Provision

Column 2

Short-form Description

1.

14

Failing to give the Agency prescribed information at the prescribed time

2.

15

Failing to give the Agency prescribed information at the prescribed time

3.

17

Failing to give the Agency prescribed information at the prescribed time

4.

19

Failing to give the Agency prescribed information at the prescribed time

5.

21

Failing to give the Agency prescribed information at the prescribed time

6.

24(3)

Failing to give the Agency prescribed information at the prescribed time

7.

25(2)

Failing to give the Agency prescribed information at the prescribed time

8.

29

Failing to give the Agency prescribed information in the prescribed manner

9.

30

Failing to notify the Agency without delay of a change to prescribed information given before arrival in Canada

10.

32

Failing to notify the Agency without delay of specified information

PRESENTATION OF PERSONS (2003) REGULATIONS

25. (1) Subsection 4(1) of the Presentation of Persons (2003) Regulations (see footnote 18) is replaced by the following:

Information to be provided — noncommercial passenger conveyance

4. (1) The person in charge of a non-commercial passenger conveyance, other than a marine pleasure craft, that will arrive in Canada who intends to present themselves and all other persons on board the conveyance by telephone to an officer at a designated customs office is required under subsection 12.1(1) of the Act to give the Agency the conveyance’s scheduled time and place of arrival in Canada and, if it is different, the conveyance’s place of final destination in Canada and scheduled time of arrival at that destination.

Time and manner of providing information

(1.1) The person in charge of the conveyance shall give the information by telephone to an officer at a designated customs office at least two but no more than 48 hours before the conveyance arrives in Canada.

(2) Subsection 4(3) of the Regulations is replaced by the following:

Change to information

(3) A person in charge of a conveyance who gives information in the circumstances set out in this section shall, before the conveyance arrives in Canada, notify an officer at a designated customs office by telephone of any change to the information given unless there are emergency circumstances, in which case they shall notify an officer at a designated customs office of the change and the circumstances when the conveyance arrives in Canada.

26. Subsection 15(1) of the Regulations is replaced by the following:

Information to be provided — aircraft

15. (1) The person in charge of a corporate aircraft or private aircraft that will arrive in Canada who intends to present themselves and all other authorized persons on board the aircraft in an alternative manner described in paragraph 11(b) or (c) is required under subsection 12.1(1) of the Act to give the Agency the aircraft’s scheduled time and place of arrival in Canada and, if it is different, the aircraft’s final place of destination in Canada and scheduled time of arrival at that destination.

Time and manner of providing information

(1.1) The person in charge of the aircraft shall give the information by telephone to an officer at a designated customs office at least two but no more than 48 hours before the aircraft arrives in Canada.

27. Subsection 17(1) of the Regulations is replaced by the following:

Information to be provided — marine pleasure craft

17. (1) The person in charge of a marine pleasure craft that will arrive in Canada who intends to present themselves and all other authorized persons on board the marine pleasure craft in the alternative manner described in paragraph 11(e) is required under subsection 12.1(1) of the Act to give the Agency the marine pleasure craft’s scheduled time and place of arrival in Canada and, if it is different, the marine pleasure craft’s final place of destination in Canada and scheduled time of arrival at that destination.

Time and manner of providing information

(1.1) The person in charge of the marine pleasure craft shall give the information by telephone to an officer at a designated customs office at least 30 minutes but no more than four hours before the marine pleasure craft arrives in Canada.

28. Section 18 of the Regulations is replaced by the following:

Change to information

18. A person in charge of a conveyance who gives information in the circumstances set out in section 15 or 17 shall, before the conveyance arrives in Canada, notify an officer at a designated customs office by telephone of any change to the information given unless there are emergency circumstances, in which case they shall notify an officer at a designated customs office of the change and the circumstances when the conveyance arrives in Canada.

PART 2

REPORTING OF IMPORTED GOODS REGULATIONS

29. The Reporting of Imported Goods Regulations (see footnote 19) are amended by adding the following before section 13:

Carrier

30. Subsection 13(1) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) the information set out in Schedule 3 if there is a cargo container on board the vessel.

31. The Regulations are amended by adding the following after section 15:

15.1 The carrier shall give the Agency the information set out in Schedule 3 within 48 hours after the vessel leaves the last foreign port before its arrival in Canada.

Freight Forwarder

15.2 If one or more shipments for which a freight forwarder is responsible will be transported to Canada by vessel, the freight forwarder is required under subsection 12.1(1) of the Act to give the Agency, for each shipment,

  • (a) the information set out in Part 1.1 of Schedule 2 if the vessel will travel from a place outside Canada through Canada to another place outside Canada and the shipment will remain on board the vessel while the vessel is in Canada; or
  • (b) the information set out in Part 4 of Schedule 2 if the shipment will be unloaded from the vessel either to remain in Canada or to be transported on board another conveyance to a place outside Canada.

15.3 (1) The freight forwarder shall give the Agency the information

  • (a) at least 24 hours before the shipment is loaded onto the vessel if all or part of the shipment is in a cargo container; and
  • (b) at least 24 hours before the vessel is scheduled to arrive at its port of arrival in any other case.

(2) Despite paragraph (1)(a), if the vessel will arrive in Canada directly from the United States or Puerto Rico and the shipment was loaded onto it in the United States or Puerto Rico, the freight forwarder shall give the information at least 24 hours before the vessel is scheduled to arrive at its port of arrival.

(3) Despite paragraph (1)(b) and subsection (2), the freight forwarder shall give the information before or at the time the vessel leaves the last foreign port before its arrival in Canada if the duration of the voyage from that foreign port to the vessel’s port of arrival is less than 24 hours.

32. The Regulations are amended by adding the following before section 16:

Carrier

33. The Regulations are amended by adding the following after section 17:

Freight Forwarder

17.1 If one or more shipments for which a freight forwarder is responsible will be transported to Canada by aircraft, the freight forwarder is required under subsection 12.1(1) of the Act to give the Agency, for each shipment,

  • (a) the information set out in Part 2.1 of Schedule 2 if the aircraft will travel from a place outside Canada through Canada to another place outside Canada and the shipment will remain on board the aircraft while the aircraft is in Canada; or
  • (b) the information set out in Part 4 of Schedule 2 if the shipment will be unloaded from the aircraft either to remain in Canada or to be transported on board another conveyance to a place outside Canada.

17.2 The freight forwarder shall give the Agency the information no later than four hours before the aircraft is scheduled to arrive at its airport of arrival or, if the duration of the flight to Canada is less than four hours, no later than the aircraft’s time of departure.

34. The Regulations are amended by adding the following before section 18:

Carrier

35. The Regulations are amended by adding the following after section 19:

Freight Forwarder

19.1 If one or more shipments for which a freight forwarder is responsible will be transported to Canada by a highway conveyance, the freight forwarder is required under subsection 12.1(1) of the Act to give the Agency, for each shipment, the information set out in Part 4 of Schedule 2.

19.2 The freight forwarder shall give the Agency the information at least one hour before the highway conveyance arrives in Canada.

36. The Regulations are amended by adding the following before section 20:

Carrier

37. The Regulations are amended by adding the following after section 21:

Freight Forwarder

21.1 If one or more shipments for which a freight forwarder is responsible will be transported to Canada by a rail conveyance, the freight forwarder is required under subsection 12.1(1) of the Act to give the Agency, for each shipment, the information set out in Part 4 of Schedule 2.

21.2. The freight forwarder shall give the Agency the information at least two hours before the rail conveyance arrives in Canada.

38. Section 29 of the Regulations is replaced by the following:

29. A person that is required to give information to the Agency under subsection 12.1(1) of the Act in the circumstances set out in section 13, 15.2, 16, 17.1, 18, 19.1, 20, 21.1, 24 or 25 shall give the Agency the information by electronic means in accordance with the technical requirements, specifications and procedures that are set out in the Electronic Commerce Client Requirements Document.

39. Section 30 of the Regulations is replaced by the following:

30. A person that gives information to the Agency under subsection 12.1(1) of the Act in the circumstances set out in section 13, 15.2, 16, 17.1, 18, 19.1, 20, 21.1, 24 or 25 shall, if they become aware that the information is inaccurate or incomplete, notify the Agency without delay by electronic means of a change to that information.

40. Schedule 2 to the Regulations is amended by replacing the references after the heading “SCHEDULE 2” with the following:

(Paragraph 13(1)(b), subsection 15(1), section 15.2, paragraph 16(1)(b), subsection 16(3), section 17.1, paragraph 18(1)(b), subsection 18(3), section 19.1, paragraph 20(1)(b), subsection 20(3) and section 21.1)

41. The heading of Part 1 of Schedule 2 to the Regulations is replaced by the following:

MARINE MODE — CARRIER

42. Item 3 of Part 1 of Schedule 2 to the Regulations is repealed.

43. Schedule 2 to the Regulations is amended by adding the following after Part 1:

PART 1.1

MARINE MODE — FREIGHT FORWARDER
  1. Code provided by the Agency to identify the movement of the shipment (see reference d)
  2. Primary cargo control number — Number assigned by the carrier that operates the vessel, beginning with its carrier code, to the bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of the shipment
  3. Number assigned by the freight forwarder to the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  4. Secondary cargo control number — Number assigned by the freight forwarder, beginning with its carrier code, to identify the shipment
  5. Manifest quantity and qualifier — Number and nature of pieces indicated on the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  6. Code provided by the Agency to identify the mode of conveyance (see reference d)
  7. If a cargo container contains all or part of the shipment
    • (a) the number that identifies the cargo container, and
    • (b) the number assigned by the carrier that describes its size and type
  8. Description of the goods in the shipment
  9. The Customs Tariff item number that applies to each good in the shipment
  10. Each UN number listed in column 1 of Schedule 1 to the Transportation of Dangerous Goods Regulations that applies to a good in the shipment
  11. Volume of the shipment and unit of measurement
  12. Weight of the shipment and unit of measurement
  13. Name and address of the shipper of the shipment
  14. Name and address of the consignee of the shipment, every delivery address and name of every person to be notified, as indicated on the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  15. Description of all markings on the outer packaging of the shipment, if any

Reference d
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

44. The heading of Part 2 of Schedule 2 to the Regulations is replaced by the following:

AIR MODE — CARRIER

45. Item 25 of Part 2 of Schedule 2 to the Regulations is repealed.

46. Schedule 2 to the Regulations is amended by adding the following after Part 2:

PART 2.1

AIR MODE — FREIGHT FORWARDER
  1. Code provided by the Agency to identify the movement of the shipment (see reference e)
  2. Primary cargo control number — Number assigned by the carrier that operates the aircraft, beginning with its carrier code, to the bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of the shipment
  3. Secondary cargo control number — Number assigned by the freight forwarder, beginning with its carrier code, to identify the shipment
  4. Manifest quantity and qualifier — Number and nature of pieces indicated on the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  5. Code provided by the Agency to identify the mode of conveyance (see reference e)
  6. Description of the goods in the shipment
  7. The Customs Tariff item number that applies to each good in the shipment
  8. Each UN number listed in column 1 of Schedule 1 to the Transportation of Dangerous Goods Regulations that applies to a good in the shipment
  9. Volume of the shipment and unit of measurement
  10. Weight of the shipment and unit of measurement
  11. Name and address of the shipper of the shipment
  12. Name and address of the consignee of the shipment, every delivery address and name of every person to be notified, as indicated on the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  13. Description of all markings on the outer packaging of the shipment, if any

Reference e
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

47. The heading of Part 3 of Schedule 2 to the Regulations is replaced by the following:

HIGHWAY AND RAIL MODES — CARRIER

48. Schedule 2 of the Regulations is amended by adding the following after Part 3:

PART 4

ALL MODES — FREIGHT FORWARDER
  1. Code provided by the Agency to identify the movement of the shipment (see reference f)
  2. Primary cargo control number — Number assigned by the carrier that operates the conveyance, beginning with its carrier code, to the bill of lading, waybill or similar document that is issued by the carrier and that relates to the carriage of the shipment
  3. Secondary cargo control number — Number assigned by the freight forwarder, beginning with its carrier code, to identify the shipment
  4. List of all secondary cargo control numbers for shipments for which the freight forwarder is responsible that are to be transported to Canada on board the conveyance
  5. Code provided by the Agency to indicate every condition that applies to the carriage of the shipment and that is listed in the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment (see reference f)
  6. Manifest quantity and qualifier — Number and nature of pieces indicated on the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  7. Code provided by the Agency to identify the mode of conveyance (see reference f)
  8. If a cargo container contains all or part of the shipment
    • (a) the number that identifies the cargo container,
    • (b) the number assigned by the carrier that describes its size and type,
    • (c) the seal numbers for it, if any, and
    • (d) the name and address of the person who placed the shipment in it
  9. Consolidation indicator that indicates whether, under a bill of lading, waybill or similar document that is issued by the carrier, the shipment is consolidated with other shipments for which another freight forwarder is responsible (see reference f)
  10. Description of the goods in the shipment
  11. The Customs Tariff item number that applies to each good in the shipment
  12. Each UN number listed in column 1 of Schedule 1 to the Transportation of Dangerous Goods Regulations that applies to a good in the shipment
  13. Weight of the shipment and unit of measurement
  14. Name and address of the shipper of the shipment
  15. Name and address of the consignee of the shipment, every delivery address and name of every person to be notified, as indicated on the bill of lading, waybill or similar document that is issued by the freight forwarder and that relates to the carriage of the shipment
  16. Code provided by the Agency to identify the location where the shipment will be unloaded from the conveyance in Canada (see reference f)
  17. Location where the release of the shipment will be sought
  18. Description of all markings on the outer packaging of the shipment, if any
  19. Carrier code of the carrier

Reference f
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

49. The Regulations are amended by adding, after Schedule 2, the Schedule 3 set out in the Schedule to these Regulations.

TRANSPORTATION OF GOODS REGULATIONS

50. Paragraph 7(3)(a) of the Transportation of Goods Regulations (see footnote 20) is replaced by the following:

  • (a) records by means of which the person gives the Agency information under subsection 12.1(1) of the Act in the circumstances set out in section 13, 15.2, 16, 17.1, 18, 19.1, 20, 21.1, 24 or 25 of the Reporting of Imported Goods Regulations;
DESIGNATED PROVISIONS (CUSTOMS) REGULATIONS

51. (1) Part 7.1 of Schedule 1 to the Designated Provisions (Customs) Regulations (see footnote 21) is amended by adding the following after item 2:

Item

Column 1

Designated Provision

Column 2

Short-form Description

2.1

15.1

Failing to give the Agency prescribed information at the prescribed time

2.2

15.3

Failing to give the Agency prescribed information at the prescribed time

(2) Part 7.1 of Schedule 1 to the Regulations is amended by adding the following after item 3:

Item

Column 1

Designated Provision

Column 2

Short-form Description

3.1

17.2

Failing to give the Agency prescribed information at the prescribed time

(3) Part 7.1 of Schedule 1 to the Regulations is amended by adding the following after item 4:

Item

Column 1

Designated Provision

Column 2

Short-form Description

4.1

19.2

Failing to give the Agency prescribed information at the prescribed time

(4) Part 7.1 of Schedule 1 to the Regulations is amended by adding the following after item 5:

Item

Column 1

Designated Provision

Column 2

Short-form Description

5.1

21.2

Failing to give the Agency prescribed information at the prescribed time

PART 3

COMING INTO FORCE

52. (1) These Regulations, other than Part 2, come into force on the day on which section 266 of the Jobs and Growth Act, 2012, chapter 31 of the Statutes of Canada, 2012, comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

(2) Part 2 of these Regulations comes into force on July 1, 2014.

SCHEDULE
(Section 49)

SCHEDULE 3
(Paragraph 13(1)(c) and section 15.1)

CARGO AND STOWAGE PLAN — MARINE MODE
  1. Conveyance reference number — Number assigned by the carrier, beginning with its carrier code, to identify the trip to Canada by the vessel
  2. Reference number assigned by the carrier to a voyage, which includes the voyage to Canada
  3. Vessel name and the International Maritime Organization ship identification number of the vessel
  4. Each foreign address where a cargo container or a fully or partially non-containerized shipment for which the carrier is responsible is loaded onto the vessel for transport to Canada
  5. Last foreign port of departure and time of departure
  6. Estimated date and time of arrival of the vessel at the port of arrival in Canada
  7. Port of arrival in Canada and, if different, each location where a cargo container or a fully or partially non-containerized shipment for which the carrier is responsible will be unloaded from the vessel
  8. Code provided by the Agency for each cargo container to indicate whether it is empty or loaded (see reference g)
  9. Description of each shipment for which the carrier is responsible
  10. Number that identifies each cargo container
  11. Number assigned by the carrier that describes the size and type of each cargo container
  12. Weight of each cargo container and its contents, if any, and unit of measurement
  13. Dimensions of each non-standard cargo container and unit of measurement
  14. Number that identifies each piece of equipment attached to a cargo container
  15. Code provided by the Agency to identify the size and type of each piece of equipment attached to a cargo container (see reference g)
  16. Location on board the vessel of each cargo container (by bay, row and tier)
  17. For each shipment for which the carrier is responsible that is fully non-containerized,
    • (a) its weight and unit of measurement,
    • (b) its dimensions and unit of measurement; and
    • (c) if all or part of the shipment is packaged, the form of packaging and number of packages
  18. Each UN number listed in column 1 of Schedule 1 to the Transportation of Dangerous Goods Regulations that applies to a specified good
  19. Temperature, other than the ambient temperature, at which a specified good must be kept, if applicable, and unit of measurement

Reference g
to be determined in accordance with the specifications that are set out in the Electronic Commerce Client Requirements Document

[7-1-o]