Tax & Trade Blog

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BILL C-251 AND MODERN SLAVERY

CANADA'S PROPOSED PRESUMPTION AGAINST FORCED-LABOUR IMPORTS

Bill C-251 (An Act to amend the Customs Act and the Customs Tariff) was introduced in October 2025. If enacted, it would establish a statutory presumption that goods originating from designated countries are made in whole or in part by forced or child labour and are therefore prohibited from importation into Canada.

The Bill would also impose due diligence obligations on importers, who would be required to demonstrate to the Canada Border Services Agency (“CBSA”) that they have performed effective due diligence on their supply chain. Given the potential impact of this Bill, all importers should closely monitor developments as the bill moves through Parliament.

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GOVERNMENT PROCUREMENT COMPLAINTS

PUTTING YOUR BEST FOOT FORWARD AT THE CITT - BEFORE JUDICIAL REVIEW

Adjudicating government procurement complaints is one of the most important functions the Canadian International Trade Tribunal (“CITT”) plays for Canadian businesses.  In these cases, the CITT serves as the referee when government contracts are handed out improperly.

As a recent decision of the Federal Court of Appeal (“FCA”) indicates, it is best to put one’s best foot forward before the CITT because the courts afford significant deference to the decisions the CITT makes, and it will be extremely difficult to have the decisions overturned on judicial review.

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GST 201: CAPITAL PROPERTY

UNDERSTANDING THE FINE LINE BETWEEN CAPITAL & NON-CAPITAL PROPERTY

This is another in our GST 201 Series Reports, written to provide in-depth analysis of key topics under Canada's GST/HST regime.

In this Report, we focus on “capital property”, an overlapping concept under both the ITA and ETA that determines how special input tax credit rules apply to commercial activities.

Determining whether a property is capital is a fact-driven exercise, and even small factual differences can lead to very different results.

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CBSA AUDITING STRUCTURAL STEEL

CBSA'S ONGOING SCRUTINY IN STEEL PRODUCTS CLASSIFICATION SIGNALS RISING COMPLIANCE RISK

As we have blogged here and here, the Canada Border Services Agency (the “CBSA”) sets out its priority areas for compliance audits and verifications in its Trade Compliance Verification Priorities publication.  Steel and metal products have long been among the CBSA’s primary focuses for compliance review.

Recently, the CBSA has intensified its challenges to the classification of steel containers, interpreting tariff headings in ways that go beyond prevailing industry practice.  This shift reflects a broader trend toward more aggressive enforcement in the steel sector.

For importers, this trend heightens compliance risk.  The best approach is to seek legal advice early in the audit process and resolve classification issues before they escalate into formal assessments.

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NEW HOUSING REBATE FOR BUILDERS

TCC LOWERS THE BAR FOR "OCCUPATION AS A PLACE OF RESIDENCE"

As we have blogged here and here, homeowners who sell their newly built homes shortly after taking possession have long been a target of CRA audits.  When these homeowners also claim the GST/HST New Housing Rebate, the CRA reviews their claims closely.

A key issue in these New Housing Rebate claims is whether the homebuyers occupied the property as a place of residence after completion of construction.  In the past, courts have applied a stringent standard in interpreting what constitutes “occupation as a place of residence”.

In a recent decision, Sharma v. The King (2025 TCC 145), the Tax Court of Canada (“TCC”) lowered the bar for establishing “occupation as a place of residence”, signalling an attenuated interpretation that favours taxpayers.

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NFR CHALLENGES UNDER CARM

CBSA'S NEW CARM PROGRAM CREATING BIG PROBLEMS FOR NFR STRUCTURES

Canada Customs’s new electronic portal, implemented in October 2024 as part of the Canada Border Services Agency (“CBSA”) Assessment and Revenue Management (“CARM”) system, is throwing up significant challenges for direct sellers trying to ship products into Canada under a personal importation basis.

Specifically, CARM is now effectively requiring all non-resident direct sellers to register as importers and denying their access to easy courier shipments.

The focal point for any of these direct sellers will now be (1) becoming entrenched in the Canadian marketplace, and (2) having all of their dietary supplement products formally registered as Natural Health Products (“NHPs”) with Health Canada.

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FORCED LABOUR REPORTING MADE EASIER

CANADA ADOPTS NEW GLOBAL TEMPLATE FOR ANNUAL FORCED LABOUR REPORTING REQUIREMENTS

Canada has in place now, for the last two years, a comprehensive set of legal reporting requirements for companies with supply chains that may be susceptible to products made through forced labour or child labour.

We have previously written on the reporting requirements and the reporting entity conditions here and here.

This report reviews the new global template that Canada has adopted to make this reporting process easier.

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LONG-ARM OF CRA COLLECTIONS

CRA FOLLOWS HUSBAND'S TAX DEBT TO WIFE

As we have blogged here and here, the CRA has “third-party” transfer powers that allow it to follow a taxpayer’s GST or income tax debts to relatives where it can demonstrate that money or assets have been diverted to those relatives, for less than fair market value. 

A better alternative would be dealing with one's tax debts during one's lifetime, and using the CRA’s newly revamped Voluntary Disclosure Program to help settle one’s tax affairs finally and effectively.

The Tax Court of Canada's (“TCC”) recent decision Ballantyne v. The King (2025 TCC 127) underscores the mess that can be created for a spouse or children if tax debts remain unaddressed.