Release Prior to Payment (RPP) in Canada

Why RPP Matters Under CARM

For businesses using Garden City Customs Services for normal commercial customs clearance, RPP should be established before shipments begin moving toward Canada.

Since May 20, 2025, businesses requiring release before payment must establish RPP and provide financial security under their own RM import account.

How Release Prior to Payment Works

RPP separates the release of the shipment from the payment of duties and taxes. With active RPP:

1. Goods arrive
2. CBSA release
3. Commercial accounting
4. Duties & taxes paid later

This allows a broker to process eligible shipments through normal electronic release systems without requiring the importer to make a customs payment every time goods reach the border.

For businesses importing regularly, this is an important part of maintaining predictable customs clearance.

Do Commercial Importers Need RPP?

Technically, a business can import without participating in RPP.

Operationally, however, RPP is required to use the normal interim electronic release options commonly used by customs brokers, including:

• PARS
• Integrated Import Declaration (IID)
• Release on Minimum Documentation (RMD)

An importer without active RPP is not eligible for these normal release options. Instead, the importer generally needs to submit a CAD C-type declaration and pay applicable duties and taxes at the time of release.

For businesses using Garden City for recurring commercial customs clearance, this makes active RPP an important part of the importer onboarding process.

RPP & the CARM Importer Setup Process

A commercial importer using a customs broker should generally have the following established before shipments begin:

1. Business Number
2. RM import account
3. CARM registration
4. Broker delegation
5. RPP enrollment
6. Financial security

The importer owns and controls its CARM account. The customs broker is then delegated authority to perform applicable customs transactions on the importer's behalf.

For more information about establishing an importer account, see Do You Need a Business Number to Import Into Canada?

RPP Financial Security Requirements

Importers participating in RPP must provide financial security to CBSA. For established importers, the security requirement is generally based on the highest monthly accounts receivable amount from the previous 12 months. There are two primary approaches.

Financial Security Agreement

When financial security is provided through an approved security agreement, the amount is generally 50% of the applicable security requirement, with a minimum security amount of $5,000 per RM import account.

Cash Deposit

An importer can instead provide an electronic cash security deposit. The cash deposit generally needs to equal 100% of the applicable security requirement. There is no $5,000 minimum for the cash-deposit option.

New importers without sufficient import history generally estimate their expected customs activity to establish an initial security amount.

Your Customs Broker's Bond Does Not Cover Your RPP

One of the most important changes introduced with CARM is that importers can no longer rely on a customs broker's general financial security to obtain Release Prior to Payment. The security belongs to the importer. A customs broker can still assist with:

• Customs declarations
• PARS and IID release processing
• CARM setup
• Broker delegation
• Commercial accounting
• Duties and taxes
• Import compliance

But the importer's RPP eligibility must be supported by the importer's own account and required financial security.

What Happens if RPP Is Not Active?

If an importer does not have active RPP privileges, a customs broker cannot simply process the shipment through the normal PARS or IID release process. The importer generally must instead:

1. Submit a CAD C-type
2. Pay duties & taxes
3. Obtain CBSA release

This can create significant complications when a truck or shipment is already approaching the border.

For this reason, Garden City verifies importer setup and RPP status during onboarding rather than waiting until the first shipment arrives. Completing CARM and RPP requirements in advance helps prevent avoidable release delays.

Maintaining RPP Financial Security

RPP is not necessarily a one-time setup item. An importer's customs activity can change over time. Businesses should monitor factors such as:

• Increasing shipment volume
• Higher-value imports
• Changes in duty exposure
• Monthly amounts owing to CBSA
• Financial security utilization
• CARM notifications

If an importer's activity increases significantly, additional financial security may be required. Regularly reviewing the account helps ensure RPP remains aligned with the company's actual import activity.

Who Is Responsible for RPP?

The importer is responsible for its RPP enrollment and financial security. Using a licensed customs broker does not transfer that responsibility to the broker.

The broker can provide guidance and assist with the customs process, but the RPP privilege belongs to the importer's RM account.

This is one of the reasons CARM onboarding has become an important part of starting a commercial import program in Canada.

How Garden City Supports CARM & RPP

Garden City Customs Services Inc. helps commercial importers establish the customs requirements needed for ongoing Canadian imports. Our team can assist with:

• CARM importer onboarding
• Broker delegation
• RPP guidance
• Customs brokerage
• PARS and IID processing
• Commercial accounting
• Duties and taxes
• Import compliance

For new commercial clients, we recommend completing CARM registration, delegation, RPP enrollment, and required financial security before the first shipment is dispatched.