Understanding CARM: What importers need to know

CARM aims to modernize the process of collecting duties and taxes for all goods brought into Canada. It aims to replace outdated, paper-based systems with a centralized, digital platform for assessing and paying import levies. Key goals of the project include:

• Improving efficiency and reducing the administrative burden for both importers and the government.
• Enhancing compliance by offering clearer visibility into import transactions and any duties owed.
• Increasing transparency by allowing businesses to view and manage their import declarations in real time.
• Simplifying trade processes through more seamless trade reporting, easier adjustments, and faster payments. 

CARM has been brought in on a phased basis over the last few years. Its most recent update, Release 3, came into effect on October 21st 2024 and marks the mandatory rollout for all businesses.

Using the program is mandatory for all importers of record in Canada, regardless of size. This includes:

• Commercial importers
• Customs brokers
• Trade consultants
• Financial security providers
• Freight forwarders
• Logistics providers

Under the new system, previous customs coding (B3) and request for adjustment (B2) forms have been replaced by the Commercial Accounting Declaration (CAD), which importers or their delegated customs agents can submit through the CARM Client Portal (CCP).

One key feature of this is that CADs can be adjusted or corrected through the portal. Corrections may be made without charge before a payment is due. While adjustment may continue to be paid after a payment is due, some penalties or interest may be required.

Once received, the CARM system automatically calculates the duties and taxes based on the information provided by the importer.

CARM also features significant changes to the Release Prior to Payment Program (RPP), which allows participants to obtain the release of goods from the CBSA before the final accounting and payment of duties and taxes. 

To take advantage of this, importers must post financial security themselves to be able to participate in RPP. They can no longer use the financial security posted by their customs brokers, as was the case in the past.

There are two options for this, which are:

• A written security agreement set at 50 percent of their highest monthly accounts receivable (inclusive of GST), with a minimum financial security of $5,000 per import program (RM)
• A cash security deposit set at 100 percent of their highest monthly accounts receivable (inclusive of GST)

According to the CBSA, the CARM project will provide the following key benefits to importers and their trade partners:

• Eliminating cumbersome and time-consuming paper-based processes
• Streamlining access to tools and information for importers
• Allowing firms to enroll in commercial programs, submit accounting documents and receive notifications through their CARM Client Portal (CCP) account
• Maintaining a level playing field for all businesses by providing the CBSA with better compliance and enforcement tools