Issue 2024-36

In brief

On December 16, 2024, the federal government presented its 2024 Fall Economic Statement (economic statement). The economic statement outlines several key measures aimed at enhancing Canada's customs and international trade framework. These measures are designed to protect Canadian businesses, ensure fair competition and strengthen economic security in an increasingly complex global trade environment.

In detail

Customs authority and border security

The federal government is committed to securing Canada's borders and enhancing the efficiency of its customs operations. This includes making investments to modernize the Canada Border Services Agency (CBSA) to improve the processing of imports and exports, and to ensure the safety and security of Canadians. The CBSA will receive additional funding to upgrade its technological infrastructure, which is intended to streamline customs procedures and reduce wait times at border crossings. The economic statement also includes proposed amendments to the Customs Act to further support the CBSA’s ability to inspect goods destined for export, including obligating warehouse operators to provide accommodations to the CBSA.

Duty relief

To support Canadian businesses, the government is exploring options for providing duty relief on certain imports. This includes holding consultations on the potential removal of tariffs on specific goods to reduce costs for Canadian manufacturers and consumers. The aim is to enhance the competitiveness of Canadian businesses in the global market. The economic statement proposes to allow for duty drawback for certain goods when they are donated to a registered charity, provided that they are used in the organization’s charitable programs and not resold in Canada.

Forced labour

To combat forced labour in supply chains, the government intends to introduce stricter regulations and enforcement measures. This includes enhancing scrutiny of imports to ensure that goods produced with forced labour do not enter the Canadian market. The CBSA will play a crucial role in identifying and intercepting these goods, working closely with international partners to uphold human rights standards. The economic statement announces the government’s intention to introduce legislation to strengthen Canada’s ban on imports of goods produced with forced labour.

Tariffs and trade remedies

The government is taking decisive action to protect Canadian industries from unfair trade practices, particularly those originating from non‑market economies, such as China. This includes the recent imposition of tariffs on imports of certain goods (e.g. electric vehicles [EVs], steel and aluminum products) from China. These measures are intended to counteract the negative impacts of overcapacity and oversupply in these sectors. The economic statement announces that Canada will impose tariffs on certain solar products and critical minerals from China in early 2025 and, beginning in 2026, on semiconductors, permanent magnets and natural graphite from China.

Trade restrictions

The economic statement notes that Canada will further restrict the import or export of goods in response to trade measures by Canada’s trading partners by amending the Export and Import Permits Act.

Federal procurement opportunities

The government is advancing its reciprocity policy to ensure that Canadian businesses receive fair treatment in foreign markets. This includes matching access to federal procurement opportunities to that provided by other countries to Canadian businesses. The aim is to ensure that federal procurement dollars benefit Canadian workers and businesses, and to strengthen supply chains with trusted allies. The economic statement announces that the government will enforce its obligations to limit access to Canada’s federal procurement market to Canadians and trading partners who provide access to Canadian businesses, and will consider placing domestic content conditions on foreign suppliers.

Reciprocity across trading partnerships

Canada is committed to ensuring that its trading partners provide reciprocal access to Canadian businesses. The government will strictly enforce its procurement trade obligations and consider placing domestic content conditions on foreign suppliers' participation in federally funded infrastructure projects. This approach is designed to level the playing field for Canadian businesses and workers.

The takeaway

Businesses should review the proposed measures outlined in the economic statement. To adapt and thrive in the evolving customs and international trade landscape, they should consider:

• strategically planning for tariffs and trade remedies
• optimizing duty relief and drawback programs
• enhancing compliance and due diligence

The economic statement outlines the federal government’s comprehensive strategy to protect Canadian businesses, enhance border security, impose strategic tariffs, ensure fair competition and strengthen economic security in a challenging global environment. By being proactive, companies can better navigate the changes in customs and international trade policies, ensuring compliance, minimizing costs and leveraging new opportunities for growth.