Ensuring Government or Regulatory Compliance

Commercial surety

Commercial Surety Bonds guarantee the performance and fulfillment of contractual obligations required by regulation, law or in contract. They are often mandated by regulators and government authorities to ensure that a business or individual meets their financial commitments, operates ethically and inevitably follows rules and regulations. Commercial Surety Bonds are instrumental in ensuring regulatory compliance, and reassuring the public and government bodies that the business is financially responsible, ethical and trustworthy.

There are three parties in a Commercial Surety Bond:

The Principal - the business or individual required to post the bond.
The Obligee - the government body, regulator or organization requiring the bond.
The Surety - the surety company providing the bond and backing the contractual obligation.

Do you need a Commercial Surety Bond?

Professionals - like notaries, real estate developers & brokers, customs brokers, importer/exporters
Non-profits & Charities - have strict criteria and reporting standards t maintain their tax-exempt status.
Regulated businesses - like alcohol, cannabis, tobacco distributors, automotive dealers, cryptocurrency and health clinics.
Executors, Trustees or Guardians - require commercial surety bonds for court-related bonds.
Tax-Sensitive companies - which often have special reporting requirements, duties/taxes/tarriffs, GST/HST, land transfer taxes, capital gains, dividends carbon taxes and more.

CARM Bonds

A CARM bond (Canada Border Services Agency’s Assessment and Revenue Management bond) ensures that businesses importing goods into Canada meet their financial obligations for duties and taxes. If you’re an importer, this bond guarantees compliance with the CBSA’s rules under the CARM program, so your goods can move through customs without delays.

For example, if you’re importing manufacturing equipment or materials, the bond ensures duties are covered, allowing for continuous operations. It’s a critical tool for maintaining cash flow and avoiding disruptions, showing your commitment to regulatory compliance while keeping your business running smoothly.

HOW CARM CHANGES THE IMPORT PROCESS

NEW SURETY BOND REQUIREMENTS

Under CARM, importers must post their financial security. This security can be in the form of a surety bond (covering 50% of the highest monthly accounts receivable over the past 12 months) or a cash deposit (100%). As stated above, importers can no longer rely on a customs broker’s bond.

Enhanced real-time information

With the CARM Client Portal, importers gain real-time visibility into their duties, taxes, and transactions. You’ll be able to monitor accounts, review payments, and ensure compliance at any time, 24/7. The system will also notify you when your bond or security limit is nearing its capacity, helping you avoid disruptions. Before CARM, an importer might not realize they’re approaching their security limit until they face a delay in releasing goods. Now the portal will automatically notify importers when they need to increase their security to avoid interruptions.

automated calculations

The Commercial Accounting Declaration (CAD) will replace the current paper-based customs coding forms (e.g., B3 forms). This automation will reduce manual errors and speed up processing times.

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CARM's Real World Benefits for Canadian Importers

The digital-first platform creates efficiencies and eliminates cumbersome paperwork, ensuring that your import process is faster and more reliable. The portal automates calculations and compliance checks, making it easier to adhere to CBSA’s updated regulations. Finally, you’ll be able to track everything from duties, taxes, and payment statuses, 24/7 and in real-time.

For example: A mid-sized business importing electronics into Canada used to rely on manual processes to estimate duties. They often faced delays due to human errors in calculations. The business now receives automated duty estimates and real-time notifications, significantly speeding up their import timeline.

Ferrari & Associates is your partner in CARM Compliance

License & Permit Bonds

License and permit bonds ensure that your business complies with the regulations and obligations tied to specific licenses or permits. These bonds protect the public or regulatory agencies from financial harm caused by non-compliance.

For instance, if you’re a contractor obtaining a building permit or a car dealer applying for a dealer license, this bond guarantees adherence to local or provincial regulations. By having a license and permit bond, you demonstrate your commitment to ethical business practices and regulatory compliance, which builds trust with clients and authorities.

Court Bonds

If you’re involved in legal proceedings in Canada, court bonds are an essential tool to ensure compliance with court-ordered obligations and processes. These bonds are often required for individuals or businesses acting as plaintiffs, defendants, or fiduciaries in legal matters.

For example, if you’re appealing a court decision, an appeal bond guarantees the court that you will pay the judgment and associated costs if your appeal is unsuccessful. Court bonds protect parties from potential financial loss and ensure smooth legal proceedings.

Customs & Excise Bonds

If your business is engaged in the import or export of goods in Canada, customs and excise bonds are required for ensuring compliance with regulatory obligations and processes. These bonds are often required for individuals or businesses involved in the shipment of goods that are subject to customs duties and taxes.

For instance, if you’re importing goods into Canada, a customs bond guarantees that you will pay any owed duties, taxes, and penalties associated with your shipments. Similarly, an excise bond is often required for businesses that manufacture or distribute goods subject to excise duties, ensuring that they meet all regulatory requirements.

Customs and excise bonds protect the government’s revenue and facilitate smooth trade operations by ensuring that all necessary obligations are met.

HOW TO OBTAIN A CUSTOMS & EXCISE BOND

There are three steps to obtain a Customs Bond from Ferrari & Associates.

ASSESSMENT

We help you calculate the bond amount based on your highest monthly duties and taxes.

BOND ISSUANCE

As surety brokers, our team works with leading surety providers to secure your bond at competitive rates.

Ongoing Support

We assist you in managing and updating your bond to ensure it remains compliant with CBSA’s evolving requirements.

Estate Bonds

An estate bond, also known as a fiduciary bond, ensures that an executor or administrator of an estate will manage the estate’s assets in accordance with the law and the wishes of the deceased. This bond provides a safeguard for the beneficiaries, ensuring that the executor will fulfill their duties responsibly and ethically.

When a personal representative is appointed to manage a deceased person's estate, the estate bond guarantees that they will handle financial matters accurately, distribute assets properly, and address any potential claims against the estate within the timeframe specified. This bond protects the interests of the heirs and beneficiaries, reinforcing the fiduciary's commitment to act in their best interests.

US Bonds

If you’re a Canadian contractor or business looking to operate in the United States, U.S. bonds ensure compliance with American regulations and contractual obligations. These bonds are often required for projects or operations across the border, such as federal or state construction contracts.

For example, if you’re a contractor bidding on a public works project in the U.S., a performance bond guarantees the project owner that you’ll complete the work as agreed. These bonds demonstrate your reliability and compliance with U.S. bonding standards, allowing you to expand your business opportunities south of the border.

*The information provided on this page is for information purposes only and should not be taken as insurance advice. For actual surety advice, please contact Ferrari & Associates at 1-888-467-8989

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