Mr. Speaker, the department is considering increasing the security requirement for obtaining release prior to payment of duties and taxes to 100 per cent of the average monthly invoice up to a maximum of $10 million. This action is being considered in direct response to the number of cases where brokers fail to deliver to Revenue Canada funds received from their clients, the importers.
Since importers remain liable, they have had to pay a second time to the department. As most brokers' clients are small businesses the department needs to ensure increased security to protect them and the jobs of the more than one million Canadians they employ.
Extensive consultations have been undertaken with the Canadian Society of Customs Brokers that negotiated a master bond program to make it easier for their members to meet the new security requirements. Discussions have also been undertaken with the Canadian Importers Association. Whatever is decided I do not believe any financially viable broker will be forced out of business.
Brokers are already provided with the flexibility to arrange for some of their clients to post their own security or to deliver interim payments to the department. Although many brokers have few assets in their companies they may also restructure their financial arrangements by using personal assets to obtain security.
A recent enhancement has been discussed that would assist both brokers and importers in obtaining security. The requirements for importers posting their own security, whether or not they use a broker, would be based on an amount equivalent to the duties and taxes payable on a monthly basis, less the goods and services tax.
This enhancement could make it easier for brokers to arrange for some clients to obtain security and enable them to protect the remainder of their clients from the consequences of default. As well, the cost of doing business for most of the 8,000 importers who deal directly with the department would not increase.
In conclusion, this enhancement is being discussed with the Canadian Importers Association and the Canadian Society of Customs Brokers, both of whom are contributing positively to resolving this issue.