Who’s Paying My Duties and Taxes Under CARM?

Who’s Paying My Duties and Taxes Under CARM?

An Editor's Note: While reading this blog, please note on April 19, 2024, the CBSA announced the May 2024 implementation date is postponed to October 2024.


Ten years in the making, CARM is, without question, the most significant change to the way that Canadian commercial importers engage with the CBSA and Canada Customs at large. For good or ill, it is a fundamental shift away from the broad brush authority brokers were once afforded by default to manage the imports of their clients and towards a more direct relationship between importers and the CBSA. Regardless of any of the affected parties’ feelings on the matter, there is no way to unring the bell or unwind the clock - we are all going to have to change how we proceed.

The challenge posed by CARM is that you, as an importer, are, by necessity, now mandated to be more ingrained in the process than ever before. Understanding exactly what kind of responsibilities you are set to inherit from your broker is best understood through the lens of how things have been processed up until now.

Your Broker and You

Today, still a few months before CARM goes live, a Canadian commercial importer that is broker-backed doesn’t need to worry about paying Customs directly, as their broker does that for them in addition to filing the release and accounting entries. If PCB is your broker, you have likely been, without prompting, receiving itemized invoices covering the cost of your fees, duties, taxes, and applicable service charges payable to PCB directly. Your business’s interaction with the CBSA is incredibly limited entirely by design. 

The reality is that for most importers, this distance is a benefit. It’s not something that they want or need to worry about—that’s why they pay a broker. In truth, one of the greatest benefits of having a broker is that an importer can pay a fee and focus their energy on other aspects of their business instead of getting mired in the often complex world of Customs regulations. They reap the benefits of international trade while avoiding some of its more banal complications. 

What you may not be aware of, however, is how this actually works, and the answer is surprisingly simple - we at PCB complete the release declaration entry, calculate what duties and taxes our clients owe to Customs, and pay them on that client’s behalf, allowing all of our clients to use our broker release bond for the transaction. We then add in our service charges, separate out the taxes, fees, and duties for your specific imports, and present each of our clients with a simple itemized bill. 

This is the largest change to how things will proceed in October. With CARM, this way of doing things is impossible to maintain, as importers now must have their own bonds and are responsible for their own financials. Fortunately, there is a solution that may allow us to enjoy the benefits of both worlds.

The Good and The Bad of CARM in 2024

It is worth acknowledging that CARM has its benefits, and regardless of how much the old system may have worked - there is no sense in getting caught up in nostalgia. CARM is designed to create more transparency and close the gap between importers and the CBSA. With the CBSA being much closer to your import records through CARM, they are able to maintain a much sharper eye for catching errors in declaration. It also opens up an opportunity for enterprising importers to manage their own financials, and for some clients, this is a huge benefit. If you are the kind of importer who wants to have a full understanding of what is going on with a firm hand on the wheel, the CARM Client Portal is designed to keep you informed and in the loop. 

The issue is that it is not a choice. Every Canadian commercial importer will need to be in the portal eventually if they wish to continue with their international trade. You, as the importer, will be expected to manage your own financials in the CARM Client Portal, regardless of how you feel or how it fits into your business plan. 

Provided you have granted PCB access and the appropriate permission, we can still see and assist you with your duties and taxes in the portal. However, at the end of the day, it is your account, and you will soon be responsible for paying the CBSA directly. While we may have gained transparency and a closer relationship with the CBSA, what we tragically lose is simplicity and a system that really worked.

Where Do We Go From Here?

With all of that said, there is an opportunity for this not to be too much of an upheaval. It doesn’t take a lot of brainstorming to come to the solution of letting your broker manage your CARM Client Portal. Through the portal, the tenured experts that importers have trusted for over 70 years can continue to manage the financial element of your imports, all while allowing you to reap any additional benefits the new system might provide. 

We call our new service CARM Management. For a very slight adjustment in our fee due to the increased complexity of this management under CARM, you gain all the benefits of this new system along with all the value you’ve been receiving from your tenured broker. If you take advantage of this service, day to day, very little will change for your business. We will still manage your imports, your invoice will still be created and checked by trade experts, and you now have access to a more intimate relationship with the CBSA through CARM if you want it. 

CARM Management is a fantastic opportunity to enjoy the best of everything.

How you choose to proceed in this time of unprecedented change is up to you, but we would love the chance to discuss it with you. For more information about CARM, our new CARM Management service, or anything at all, please get in touch with our team today. We are excited to move forward into this new age together!

Disclaimer: While reading, kindly note the date of this blog. At PCB we do our due diligence to write on the most relevant topic every week and naturally content may become dated as developments in a certain program/topic occur. For this reason, we greatly appreciate your readership and hope you continue reading with the posting date in mind. For the latest information on this topic please use our website's search function, or better yet, subscribe to our "Trading Post" newsletter to receive these updates directly to your inbox.
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About the Author
Brandon Smith

Brandon Smith is a Trade Manager specializing in accounting and CBSA Assessment and Revenue Management (CARM). Raised in the border town of North Portal, Saskatchewan, Brandon attended the University of Regina and received his Bachelor of Business Administration. In 2023, Brandon joined us at PCB as part of our CARM preparedness initiative. As the head speaker and presenter for all our CARM-related Learning Center courses, he is trusted to explain, simplify, and engage with each client’s unique challenges in the face of upcoming changes.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.