Canadian small businesses are poised for growth, but new trade and customs rules are putting that at risk

Canadian small and medium-sized enterprises (SMEs) are essential drivers of Canada’s economy, making up 98% of all businesses and contributing significantly to GDP and employment. However, their ability to expand globally and remain competitive is at risk due to upcoming changes in customs rules by the Canadian Border Services Agency (CBSA). These changes, under the Assessment and Revenue Management System (CARM), will impose burdensome requirements such as registration and financial bonds on SMEs, potentially stalling trade and hindering economic growth.

In a recent op-ed in iPolitics, our Vice-President and Deputy Leader of Government Relations, Robin Guy, and the Vice-President of Corporate Affairs at UPS Canada, Carolyn Kim, highlight the urgent need for a simplified and easy-to-navigate customs regime. Such a system is crucial not only for SMEs to remain competitive but also to secure the nearly $1.2 trillion in annual trade between Canada and the U.S. alone.

Main Takeaways:

• SMEs contribute approximately 50% of the nation’s GDP in the goods-producing sector and about 41% of the total value of exported goods, highlighting their significant economic impact.
• A simplified and easy-to-navigate customs regime that efficiently processes goods across North America’s border is essential for SMEs to stay competitive, and to secure the nearly $1.2 trillion in annual trade between Canada and the U.S.
• The new customs rules by the CBSA starting May 13, 2024 will particularly affect small businesses and e-commerce entrepreneurs who are first-time importers, requiring them to navigate complex requirements or risk shipments being stuck at the border.
• Delays and increased costs in the supply chain can impact the affordability of goods for consumers, emphasizing the broader implications of customs changes on the economy.
• We need a voluntary and thoughtfully phased-in approach to CARM registration to mitigate business risks and maintain border fluidity in the short term.
• Government policies should support, rather than hinder, business growth and trade opportunities for Canadian SMEs.