Key Takeaways
- CUSMA's 2026 review window opens this year, and any changes to ROO thresholds or de minimis floors will trigger CAD re-filing workflows and cost adjustments across Canadian importers.
- CBSA origin verification requests are up already; treat every CUSMA preference claim on a CAD like it will be audited, because the sampling rate has climbed since CARM launched.
- If your supply chain crossed the Rio Grande twice before hitting Windsor, your Regional Value Content calculation is the first place CBSA will ask questions during a verification.
- Mid-market importers should audit their certificates of origin and supplier affidavits now, before the review closes and enforcement tightens in 2026.
Why a provincial trade council matters to customs brokers
The Ontario Chamber of Commerce launched a Trade & Competitiveness Council last week, timed to feed into the mandatory six-year review of CUSMA that kicks off in 2026. For most importers, that sounds like a policy story. For brokers, it's operational: every change to Rules of Origin thresholds, de minimis floors, or sector-specific annexes flows straight into the CAD filing workflows we run daily.
CUSMA Article 34.7 requires Canada, the United States, and Mexico to review the agreement six years after entry into force. The agreement became law on July 1, 2020, so the formal review window opens in mid-2026. But consultation, position papers, and lobbying happen 12 to 18 months ahead. That's why the Chamber stood up the council now.
The council's mandate covers regulatory alignment, trade irritants, and competitiveness benchmarks. In customs terms, that translates to origin verification protocols, de minimis thresholds (currently USD 800 in the U.S., CAD 150 in Canada under CBSA's Courier Low Value Shipment program), and sector-specific Rules of Origin in Annex 4-B. Any of those shifts will touch every Commercial Accounting Declaration filed after the review closes.
What changes could hit your CADs
The most likely amendments to watch:
Regional Value Content recalculations. Automotive ROO are the usual flashpoint. CUSMA already raised the RVC threshold for passenger vehicles to 75 percent under the net-cost method, up from 62.5 percent under NAFTA. If the review pushes that higher or tightens the tracing list for steel and aluminum, your suppliers' affidavits stop working. You either re-source or pay MFN duty.
De minimis harmonization. The USD 800 U.S. threshold has been a political irritant since 2016. If Canada agrees to raise its CAD 150 courier exemption (or the U.S. agrees to lower its floor), the math on small parcel duty deferral and CARM RPP bond exposure shifts. Most brokers already see clients splitting shipments to stay under thresholds; any change will either kill that arbitrage or expand it.
Origin verification timelines. CBSA already has four years under Customs Act section 42.01 to request proof of origin, and importers must respond within 30 days. If the review tightens that window or imposes new electronic certificate requirements (similar to CETA's REX system in the EU), the administrative load on mid-market importers without full-time trade compliance staff gets heavier.
Textile and apparel yarn-forward rules. CUSMA kept the "yarn forward" rule from NAFTA: to qualify for preference, most apparel must be cut and sewn in North America from North American fabric made from North American yarn. If the review loosens that to "fabric forward" or adds exceptions for certain HS 6-digit lines, a lot of Asian-sourced garments suddenly qualify. If it tightens, compliance costs go up.
None of these are hypothetical. The USMCA review process in Washington is already underway, and labor groups, steel manufacturers, and e-commerce coalitions have all filed position papers. What gets negotiated in 2026 becomes the CAD filing rulebook in 2027.
CBSA origin verification is already climbing
We've seen CBSA verification letter volume tick up since CARM Phase 2 launched in October 2024. Automotive, steel, aluminum, and apparel are the usual suspects. The pattern is consistent: CBSA issues a verification request under Customs Act section 42.01, the importer or Non-Resident Importer has 30 days to produce a valid certificate of origin or supplier's declaration, and if the documentation is missing or incomplete, CBSA re-assesses at MFN rates and issues a K84 demand for the duty differential plus interest.
In some cases, CBSA also levies an AMPS penalty if the origin claim was negligent or fraudulent. Level 1 contraventions for incorrect origin claims start at CAD 1,600 and scale based on the duty amount evaded. The importer and the broker (if the broker made the claim) are jointly exposed.
The timing isn't coincidental. Enforcement always ticks up during FTA review cycles. Trade negotiators need data on compliance rates, revenue leakage, and common failure modes. CBSA feeds that data upstream to Global Affairs Canada, which uses it in the negotiating room. If your CUSMA preference claims look shaky now, expect a verification letter before the review closes.
What to audit before the review window opens
If you're claiming CUSMA preference on more than a handful of CADs per month, run these checks now:
Certificates of origin on file. CUSMA doesn't mandate a specific certificate format, but CBSA expects either a signed certificate from the producer or exporter, or a blanket declaration covering multiple shipments over 12 months. If you're relying on supplier affidavits, make sure they include the HS classification, the applicable ROO from Annex 4-B, and the RVC calculation or tariff-shift proof. Vague statements like "qualifies under CUSMA" won't survive a verification.
Regional Value Content calculations. If your goods cross the border twice (e.g., U.S. parts to Mexico for assembly, then back to Canada), the RVC calculation gets messy fast. CBSA will ask for a full Bill of Materials and a tracing schedule showing the origin of every non-originating input. If your supplier can't provide that, you're paying MFN duty.
Tariff-shift compliance for non-RVC claims. Some CUSMA ROO allow qualification by tariff shift alone, without an RVC test. But CBSA still expects you to prove that every non-originating input underwent the required change in HS classification. If your supplier ships HS 8708.99 auto parts from China to Michigan for sub-assembly, then the finished HS 8708.30 brake goes to Ontario, you need documentation showing the shift occurred in the U.S. and that the U.S. processing was substantial enough to confer origin.
NRI origin responsibility. If you're filing CADs as a Non-Resident Importer, remember that origin responsibility sits with the NRI, not the Canadian consignee. CBSA will send the verification letter to the NRI's Canadian agent of record. If your NRI clients don't have origin documentation in hand, start collecting it now, before the review tightens enforcement.
Cross-border supply chains and regional content traps
The most common CUSMA origin failure we see: goods that ping-pong across the border accumulate non-originating inputs at every stop, and nobody tracks the cumulative RVC erosion. A Michigan stamping plant sources Chinese steel, stamps it into a HS 8708.29 body part, ships it to a Nuevo León assembly line that adds more non-CUSMA components, then the finished HS 8703.23 vehicle crosses into Ontario.
Every non-originating input eats into the RVC numerator. If the final RVC falls below 75 percent net cost, the vehicle doesn't qualify, and the importer pays the MFN duty rate of 6.1 percent on the full customs value. On a CAD 50,000 vehicle, that's CAD 3,050 you didn't budget.
If your supply chain looks like that, the CUSMA review is your cue to audit the RVC math and either re-source or accept that some SKUs will never qualify. Trying to stretch a 72 percent RVC into a 75 percent claim is the fastest way to trigger an AMPS penalty during a CBSA verification.
Where physical ops and origin compliance overlap
Origin verification doesn't stop at the CAD. If CBSA flags a shipment for exam, the physical inspection happens at a sufferance warehouse or a CBSA exam facility. The examiner will look for country-of-origin markings, compare the HS classification on the packing list to the CAD, and in some cases pull samples for lab testing.
If the goods are marked "Made in China" but your CAD claims CUSMA preference, the examiner will escalate to the origin verification unit. At that point, you're explaining the supply chain to CBSA, and if the explanation doesn't match the certificate of origin, you're paying MFN duty plus interest retroactive to the release date.
Most of our clients store exam-flagged containers at FENGYE's Montreal facility while CBSA works through the backlog. Dwell times on origin exams are unpredictable, typically two to five business days if documentation is clean, longer if CBSA requests additional proof. If the goods are time-sensitive and you can't afford the hold, the only defense is airtight origin documentation filed with the CAD.
Why this matters in 2025, not 2026
The formal CUSMA review window opens mid-2026, but the consultation process is already moving. The Ontario Chamber's council will publish position papers this year, and Global Affairs Canada typically circulates draft proposals six months ahead of formal talks. If you wait until the review closes to audit your origin claims, you'll be fixing compliance gaps under the new rules, not the current ones.
We file hundreds of CADs weekly, and the clients who come through CBSA verifications cleanest are the ones who treat every CUSMA preference claim like it will be audited. That means valid certificates of origin on file before the shipment moves, RVC calculations documented in the supplier's records, and a clear audit trail from the CAD back to the production records.
If your current process is "claim preference and hope CBSA doesn't ask," the next 18 months are your window to fix it. Once the review closes and the amended agreement takes effect, CBSA enforcement will tighten, and the cost of getting origin wrong will climb.
We run origin audits and CUSMA compliance reviews as part of our trade compliance service. If your CADs are claiming preference on more than a few tariff lines, and you're not certain the documentation would survive a CBSA verification, that's the kind of file review we do every week. Get in touch.
Frequently Asked Questions
What is the CUSMA review and when does it happen?
CUSMA Article 34.7 requires the three parties to review the agreement six years after entry into force. The agreement took effect July 1, 2020, so the mandatory review window opens in 2026. The Ontario Chamber's council launched now because consultation and position papers typically run 12 to 18 months ahead of formal negotiations.
Will the CUSMA review change tariff classifications or HS codes?
Unlikely. HS 6-digit nomenclature is set by the World Customs Organization, not CUSMA. What can change are Rules of Origin thresholds, Regional Value Content formulas, and de minimis exemptions. Those changes touch your CAD origin claims, not your tariff line.
How does a CUSMA origin claim work on a Commercial Accounting Declaration?
When you file a CAD via the CARM Client Portal and claim CUSMA preference, you assert that the goods meet the applicable Rule of Origin in CUSMA Annex 4-B. CBSA can request proof within four years under Customs Act section 42.01, and you must provide a valid certificate of origin or supplier's declaration within 30 days of the verification letter.
What happens if CBSA disallows my CUSMA origin claim during verification?
CBSA will re-assess the entry at MFN rates, issue a K84 demand for the duty differential plus interest, and in some cases levy an AMPS penalty if the claim was negligent or fraudulent. The importer or NRI on the CAD is jointly liable for the amounts owing.
Does the CUSMA review affect CETA or CPTPP origin claims?
No. CETA and CPTPP are separate agreements with separate ROO annexes. If your shipment qualifies under CETA, you claim that preference on the CAD regardless of what happens in the CUSMA review. The only overlap is administrative: CBSA uses the same verification workflow for all FTA claims.
Should I expect more origin audits between now and 2026?
Yes. We've seen CBSA verification letter volume climb since CARM Phase 2 went live in October 2024, especially on automotive, steel, and apparel. Enforcement tends to tick up during FTA review cycles as trade negotiators look for data on compliance rates and revenue leakage.
Can I correct a CUSMA origin claim after I file the CAD?
Yes, but only within the correction window. CBSA permits voluntary corrections within 90 days of release via the CARM Client Portal. After that, you need to request a formal adjustment under section 32.2 of the Customs Act, and CBSA may deny it if the origin claim was made in bad faith.
Originally published at https://www.canflow-global.com/en/insights/what-the-cusma-review-means-for-canadian-importers-filing-cads-in-2025/.
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