International Trade Committee on March 19th, 2024

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you.

I would hope you'd reach out directly to importers, because right now it seems like you're putting it on industry and stakeholders, saying to reach out to their clients. I think that's an unfair proposition to put on industry stakeholders.

I'd encourage you to do a bit more reaching out directly to the importer of record, because you have the systems and you know who's importing. I think that would be very beneficial to get more importers on board.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Baldinelli.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I want to build on what my colleague just talked about and some of the issues of the importers.

Mr. Gallivan, you talked about some of the changes that are required at CBSA, but we also have to look at what our stakeholders and importers are doing. Say, for example, the CARM portal will require many of Canada's top importers to perform internal IT modifications to support CARM. This will require stakeholders to allocate resources and a budget to schedule IT changes, test the changes and implement the changes. This takes longer than the 60 days the CBSA is providing before CARM goes live.

Are we providing enough time for the stakeholders to be ready?

[Ted Gallivan]

Most stakeholders, especially the large ones, have known about this for many years, so there has been abundant opportunity for that. In fact, they were parties to the design. Many businesses have known about these changes.

We had a firm implementation date in the fall of 2023. We changed that date very close to the deadline, so I believe that businesses have had extensive periods of time.

Going back to my earlier testimony, if an additional period of time is necessary, we're listening, and we're working on the parameter of additional time. However, in fairness to those who are ready—and this goes back to the competitive landscape—we're very mindful that some businesses and players in the market are ready for CARM, so we don't want to disadvantage their market share.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

We're talking $182 million to Deloitte since 2018. How many times since then, over the past six years, has the contract with CBSA...? Has re-profiling the funds or enlarging the cost of the project in the contract with Deloitte taken place? Have changes been made over those six years that have changed the scope and provided additional funding to Deloitte? If that is the case, would another procurement be needed?

[Ted Gallivan]

I think the most significant change was changing the date, the timeline. In part it was stakeholders seeking input around the design. At its earliest, this ought to have been implemented in the spring of 2021, so we're roughly three years behind schedule—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Yes.

[Ted Gallivan]

—based on that, but in part it was because of consultation and debate over the design.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Mr. Gallivan, I will follow up on that, because the Standing Committee on Government Operations and Estimates in November did some studies on ArriveCAN. They were looking at it, and there were comments with regard to CARM that Deloitte was being put in the “penalty box”. For example, Cameron MacDonald said, “I believe it was not on time and not on budget in terms of where the project milestones were supposed to be. The company had been put on time out.”

What does that mean? This was in the fall. Is Deloitte back on the job, or are they still in the penalty box? Was it a minor or a major penalty? What did they do?

[Ted Gallivan]

I share the same confusion over the term “penalty box”. In more than three decades in the public service, I've never heard of a penalty box. As a decision-maker, I wouldn't know what to do with that kind of comment. I have no idea where it came from.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Can you confirm that Deloitte has been continuously working on the CARM project since that time?

[Ted Gallivan]

Yes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Have there been delays because of it?

[Ted Gallivan]

There have been no delays.

There was a delay, at least a three-year delay, due to scheduling and scope issues, but Deloitte has continuously worked on the project since that time. It would be my testimony that I've never heard “penalty box”, nor would I know what to do with it if somebody told me that.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Finally, Mr. Gallivan, to be correct, is it 56,000 that have registered? Have they seen the functionality? Are they aware of what is coming on May 13 to a great degree?

From my understanding, you talked about talking to the industry weekly, yet the TCP working committee was created, the system was already developed and the industry was advised that there would be no further changes.

I worry that you have a number of people who aren't going to be ready. You may have registrations, but are they ready for the functionality of the system?

[Ted Gallivan]

It's our sixth release, so when people are registered in the CARM, they do have access to functionality. Because we are on our sixth release, many businesses have been using CARM for years.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Madam Chair, is that time?

[The Chair, Liberal, Judy Sgro]

You have 51 seconds.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That's fine.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Sidhu, you have five minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Madam Chair.

Can we get Mr. Gallivan to answer this on the record?

Are there going to be penalties for those that have not signed up by May 13? I know there are dates flying around of six months and one year. What is the grace period?

[Ted Gallivan]

Maybe I should turn to Ms. Lutfallah to make sure we're absolutely right, because I think it's an important issue for businesses.

Jennifer.

[Jennifer Lutfallah]

I'm going to go through some of the transition measures and give the applicable dates so that we're all on the same page.

When it comes to the usage of the broker BN, that has been signed off for one year. For one year, brokers can continue to use their business number as a means of accounting for their client importers.

When we're talking about the RPP—and forgive me for giving you an acronym—which is release prior to payment, that will be 180 days.

With respect to the registration in CARM, is there a drop-dead date of May 13? If you are going to be importing into Canada, yes, you have to be registered by May 13.

[Maninder Sidhu, Liberal, Brampton East, ON]

What happens if you don't register by May 13?

[Jennifer Lutfallah]

You can continue to use a broker as well. If you choose to import on June 17, you should be registered by June 17. On the day you're going to be importing, you should ensure that you are on the CARM system.