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ARTICLE · 29 JULY 2026

Surety Bonds Caught In Insurance Tax Net

Millar Kreklewetz
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A recent Ontario Superior Court decision has determined that commercial surety bonds—essential tools for importers and customs brokers securing obligations with the Canada Border Services Agency...

CanadaTax
Robert Kreklewetz
Robert Kreklewetz
Isaac Thompson
Isaac Thompson

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Commercial surety bonds ("Surety Bonds") are a vital but frequently misunderstood staple of international trade. Importers and customs brokers rely on Surety Bonds to secure various financial obligations with the Canada Border Services Agency ("CBSA"), including Release Prior to Payment ("RPP") bonds under CARM, bonded warehouses, carrier agreements, and customs appeal bonds.

A recent Ontario Superior Court of Justice ("ONSC") decision has introduced significant tax implications for the financial institutions issuing these vital trade tools. In Aviva Insurance Company of Canada v. Minister of Finance, 2026 ONSC 2374 ("Aviva"), the Court determined that surety bonds fall within the definition of a "contract of insurance" for provincial insurance premium tax purposes.

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