What is off-setting and when will it be in place?
The fundamental principle of off-setting relies on financial management best practice where a disbursement is not issued to a recipient who has outstanding debt. All credit amounts owing to an importer will automatically be applied to the account to reduce their balance owing. On August 2, 2016, account off-setting will begin.
Benefits of Account Off-setting
Off-setting will automatically apply a credit to a client’s account, reducing its balance. There is no longer a requirement for a client to wait to receive a disbursement cheque in order to benefit from their entitled credit.
The use of off-setting significantly reduces the number of disbursements issued to importers, resulting in a more expedited credit issuance process, which significantly reduces the cost to the Government of Canada.
How does off-setting work?
The off-setting process respects the importer/agent relationship. An importer credit that is associated with a specific broker will be used to off-set importer debt (amounts owing) that is associated to that same broker. An importer credit that is associated with a specific consultant will be used to off-set unassociated importer debt (importer debt that is not associated with any agent).
If, after off-setting has occurred, an importer’s account shows a credit balance, and there is no outstanding debt associated to the account, a disbursement will be issued directly to the importer if:
- The credit balance is greater than or equal to $1000.00; or,
- There has been a credit balance of less than $1000.00 for two consecutive months.
If the importer’s account has a credit balance less than $1000.00, it will remain on the account for the following month, at which time off-setting will occur.
Additional information is available at the following link.