Category: Manufacturing & Distribution

New Mandatory System for Canadian Importers (CARM)

Posted on by Edixon

The CARM system, set to launch on May 13, 2024 has been delayed until October 2024. The Canada Border Services Agency (CBSA) cited the cause for delay is related to the potential impact on their operations should members of the Public Service Alliance of Canada, which represents over 9,000 employees of the CBSA, choose to strike. The Public Service Alliance of Canada launched a strike vote on April 10th.

Though the delay affords importers and other trade chain partners additional time to register for a CARM Client Portal (CCP) account and make related procedural changes, it is clear the CBSA intends to proceed with implementing CARM as the mandatory system of record. Those who import commercial goods into Canada should register their businesses in the CCP and delegate necessary authorities as soon as possible to avoid any potential delays and registration issues in October. Importers looking to use the Release Prior to Payment program should also ensure they are positioned to post the necessary security.

Background

The new system when in place will serve as the official platform for interacting with the Canada Border Services Agency (CBSA) regarding commercial import shipments into Canada. If your corporation imports goods and materials, we recommend that you proactively complete necessary registrations and meet requirements before this date to avoid disruptions in importing and conducting business with the CBSA.

Key points about CARM (CBSA Assessment and Revenue Management):

  1. Mandatory System: The CBSA has announced that CARM will become the mandatory system for Canadian importation. It introduces significant procedural changes for importers.
  2. CCP Account: Importers must register for a CARM Client Portal (CCP) account to continue their importing activities. Without a CCP account, importers will be ineligible to import goods after October 2024.
  3. Supply Chain Considerations: Importers should anticipate potential disruptions and consider increasing critical imports into Canada before the CARM system’s implementation.

Remember to gather the necessary information (such as GCKey, Business Number, and Import/Export Program account) to complete your CCP registration and ensure smooth operations with the CBSA. Individual access and authorization levels within the business account should also be addressed.

For more detailed information on this new mandatory system, please refer to the full article, as written by RSM Canada.

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Have you Considered the Scientific Research and Experimental Development Tax Credit?

Posted on by Edixon

Is your corporation involved in such activities as agricultural and food processing, information and/or communication technology, life sciences, advanced manufacturing, or independent research to name a few. If so, you may be eligible to claim a Scientific Research and Experimental Development Tax Credit (SRED).  When we think of scientific research, we often think of the scientist in the lab wearing a white coat.  This isn’t always the case as many claims are a result of development or improvements to a product or process on the shop floor.

In order to qualify, the work must be conducted for the advancement of scientific knowledge or for the purpose of achieving a technological advancement.  It is important to note that you do not have to achieve your goal in order to gain new knowledge. For example, if your work allowed you to understand that the idea you tested is not a solution for your situation, this can be considered new knowledge.  What’s important is that the knowledge gained advances the understanding of science or technology, not how the work advanced your corporation or business practices.

The work must be a systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis.  A systematic investigation or search refers to how SRED work is carried out. It is more than just having a systematic approach to your work or using established techniques or protocols.  A systematic investigation or search must include the following steps:

  • Defining a problem.
  • Advancing a hypothesis towards resolving that problem.
  • Planning and testing the hypothesis by experiment or analysis.
  • Developing logical conclusions based on the results.
  • The federal government will allow corporations  to claim an Investment Tax Credit (ITC) of 15% on eligible expenditures.  This ITC can be applied against the current year’s income tax or in some cases carried back to a previous tax year or forward to a future tax year.  However, some small business corporations may earn an ITC of 35% on eligible expenditures which may be fully refundable in the year.
  • Eligible expenditures include:
  • Canadian wages and salaries.
  • An overhead calculation.
  • Canadian R&D-related contracts.
  • Materials.
  • Payments made to eligible research institutions.

The province of Ontario also provides additional incentives to corporations carrying out SRED activities in the province.  Certain small business corporations can earn a refundable Ontario Innovation Tax Credit (OITC) of 8% on eligible expenditures.  In addition, the Ontario Research and Development Tax Credit (ORDTC) is available. It is a 3.5% non-refundable tax credit based on eligible expenditures incurred by a corporation in a tax year.

It is important to note that the deadline to file a SRED claim on your tax return is eighteen months after your taxation year.

So If you haven’t considered SRED, it may be worthwhile to do so.

Operating Costs: Ways Companies Can Reduce the Expenses

Posted on by Edixon

Organizations can fulfill their needs and position themselves for success while keeping operating expenses low by outsourcing non-core functions such as information technology, human resources, and financial accounting.

In this article from RSM Canada, they explore some of the ways that companies can reduce operating expenses while still capturing market growth.

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