Canada: What Businesses Should Know About Bill C-21 Amendments To Customs Act (Canada)

Last Updated: June 27 2016
Article by Cyndee Todgham Cherniak

On June 15, 2016, Canada's Minister of Public Safety and Emergency Preparedness introduced Bill C-21 "an Act to amend the Customs Act" in the Canadian House of Commons. It is a relatively short bill containing important and far-reaching amendments to the Customs Act. Many people think that the Customs Act only affects them if they import goods into Canada – this is not the case and the amendments in Bill C-21 have nothing to do with the collection of customs duties on imported goods.

As a result, Bill C-21 could affect any Canadian business that operates internationally, even if it does not import goods. If businesspersons travel outside Canada on business, the amendments could affect them. If the business exports goods, the amendments could have an impact.

This article sets out ten things that Canadian businesses should know about Bill C-21. We are not going to address the privacy law issues that will be covered extensively by other.

  1. Bill C-21 will pass the legislative process in Canada

    There is a majority Federal Government and it is unlikely that the draft presented at first reading will be amended further. There are few statements made by the Minister of Public Safety and Emergency Preparedness on June 15, 2016 at the time of the introduction of Bill C-21. It should be expected that Bill C-21 will become law. As a result, knowing new obligations and the potential effects of the legislation is important.
  2. Bill C-21 is required as part of the Beyond the Border initiative announced by Prime Minister Harper and President Obama in February 2011

    On March 10, 2016, Prime Minister Trudeau and President Barack Obama announced that Canada and the United States will fully implement a system to exchange basic biographic entry/exit information at the land border and build off the process already in place. Bill C-21 fulfills Canada's side of that agreement.
  3. The main purpose of Bill C-21 is to introduce the legislative requirements to collect biometric data on all persons as they exit Canada

    This enables a process of matching entry and exit information. New Section 92 is added to the Customs Act to replace old section 92, which was repealed in 1995. New subsection 92(1) of the Customs Act provides:

    "In relation to any person who is leaving Canada or who has left Canada, the [CBSA] may collect, from a prescribed source, in the prescribed circumstances, within the prescribed time and in the prescribed manner, the following information:

    1. the surname, first name and middle names, the date of birth, the citizenship or nationality and the sex of the person;
    2. the type of travel document that identifies the person, the name of the country or organization that issued the travel document and the travel document number; and
    3. the date, time and place of the person's departure from Canada and, if the person arrives in the United States, the date, time and place of their arrival."
    The Government of Canada will be permitted by new subsection 92(2) of the Customs Act to pass regulations that would (a) prescribing the sources from which the information may be collected; (b) respecting the circumstances in which the information may be collected; and (c) respecting the time within which and the manner in which the information may be collected. Since regulations do not need to be debated in the House of Commons and may be passed by the Governor-in-Council, most of the details will be in regulations. it will be important to continue to monitor in the Canada Gazette regulations made pursuant to the Customs Act in order to be fully informed of the new requirements. Further, many laws and regulations are supported by policy. CBSA policy statements may also evolve the new exit data requirements.
  4. Business persons who travel regularly for business and spend a lot of time outside Canada may be caught in other legal regimes that limit benefits to residents of Canada

    A person's access to the Canadian health care system and other benefits could be collaterally affected. Minster of Public Safety and Emergency Preparedness stated to reporters that "Bill C-21 ... will help [Canada's Immigration Minister] deal with immigration proceedings and visa applications and it will help us ensure the integrity of Canadian social programs." The "number of days in Canada" limitation in many laws, regulations and guidelines at the federal and provincial levels may become important. Businesses will need to become familiar with such limitations and business persons will need to track their travel days to ensure compliance with other Canadian laws.
  5. Business persons who travel to Canada on a regular basis also will need to carefully monitor their number of days in Canada

    Individuals may be required to pay Canadian income tax if they are in Canada for more than the legislated period of time. Since the CBSA will have both entry and exit data, the Government of Canada will be able to calculate number of days in Canada on an annual basis. Tax assessment notices (including CPP and EI) may be in the mail if care is not taken.
  6. More Obligations of Conveyances:

    If your business involves conveyances, new reporting obligations may be imposed by the amendments to the Customs Act. New subsection 93(1) of the Customs Act imposes obligations on a "prescribed conveyance" that departs from a place in Canada and has a final destination outside Canada to provide information about passengers and the place of departure (it is not clear whether that will be a place of embarking or the port of exit). New subsection 93(2) of the Customs Act authorizes the Minister of Public Safety and Emergency Preparedness to issue a notification to any person who is required to give information under subsection (1) to require the person to take any specified measure with respect to the information. New subsection 93(1) of the Customs Act imposes an obligation to comply with ministerial requests to give information.
  7. New section 94 of Customs Act creates an obligation on persons leaving Canada to answer questions of a CBSA officer.

    Section 94 of the Customs Act provides that:

    "Every person who is leaving Canada shall, if requested to do so by an officer, present themselves to an officer and answer truthfully any questions asked by an officer in the performance of their duties under this or any other Act of Parliament."

    While providing truthful answers is something we can all accept, the fact of the matter is that the CBSA will be able take the position that a person has provided false answers and pursue the individual for committing an offence under the Customs Act. CBSA officers routinely take the position that persons have provided false answers when mistakes are made (e.g. when a person says they have less than $10,000 and the converted amount exceeds $10,000). This provision could become important in connection with the new export smuggling provision discussed briefly below. If a person says that are not exporting restricted goods and it turns out they are incorrect, the individual may be pursued for providing false information – remember, ignorance of the law is not excuse.
  8. Section 95 of the Customs Act currently imposes obligations to report certain exports of goods

    Subsection 95(1) will be amended to clarify the obligations. Subject to exceptions, all goods that are exported shall be reported at any time and place and in any manner that may be prescribed. We have previously written about export reporting obligations.
  9. The CBSA has expanded detention powers

    Subsection 97.25(1) of the Customs Act is amended to permit the CBSA to detain any goods that are to be exported, that have been reported under section 95. A detention power allows the CBSA to stop goods that are being exported and keep the goods from being exported. There are legal mechanisms to provide evidence to the CBSA so that goods are not detained indefinitely.
  10. A new export smuggling offence is added to section 159 of the Customs Act

    A blog post about the new export smuggling offence will be posted on this blog on June 21, 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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