Tax & Trade Blog

As we have previously discussed, Canada has one of the most protectionist agricultural product sectors in the world, putting import restrictions and incredibly high tariffs on basic groceries like cheese, eggs and poultry – and leading to continuing disputes with countries like the US and New Zealand over this approach.

Even if Canada is forced to change under pressure from its trade partners, tariff rate quotas (“TRQs”) will still remain a fact of life for importers – so it is best to know when and how to apply, and what to expect!

My Nexus Card got Seized!

What are my chances of winning a Nexus Appeal? And when can I reapply?

These are the two most common questions that we get from traveler clients calling or writing us after having their Nexus Cards seized by either the Canada Border Services Agency (“CBSA”) or U.S. Customs and Border Protection (“CBP”) – usually for minor infractions, under the apparently “zero-tolerance” approach that both agencies seem to be applying these days.

The second question usually comes after clients confirm that they can appeal, but that the prospects of winning are not completely certain and legal costs will have to be incurred before the appeal can be properly made.

While we reviewed the basics of the administrative appeals required earlier (i.e., one for Nexus Revocation, and a related appeal for the alleged underlying Customs infraction), here we will look at these two more fundamental questions.

While anti-dumping and subsidy investigations are not uncommon, they do not always result in duties being imposed. As a case in point, the Canada Border Services Agency (the “CBSA”) recently closed its investigation into “Drill Pipes” originating in or exported from China because the Canadian International Trade Tribunal (the “CITT”) did not find injury or a threat of injury.

On February 24, 2022, the Canada Border Services Agency (the “CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) with respect to the alleged dumping and subsidizing of mattresses originating in or exported from China (the “Subject Goods”).

See our previous blog for more information on the precise definition of the Subject Goods, including exclusions.

While the CBSA Investigation was ongoing, the Canadian International Trade Tribunal (the “CITT”) conducted a separate Preliminary Injury Inquiry, as required under subsection 34(2) of SIMA.

The right to make a customs or Special Import Measures Act (“SIMA”) appeal is very different than the right to make similar income tax or GST appeals.  Unlike income tax or GST, appeals for customs and SIMA cases can ONLY be made once full payment of ALL amounts assessed has been made to the government!

This unfair situation is presenting problems for Canadian commercial importers who want to fight their Canada Border Services Agency (“CBSA”) customs and SIMA assessments but lack the financial ability to do so.   The issue is especially severe in the case of SIMA assessments, where the amounts being levied by CBSA can sometimes exceed two or three times the total value of the imported goods themselves – and add up to 10 or 20 times the profit margin that the importer expected to earn from these import transactions.