International Trade Committee on March 21st, 2024

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling the meeting to order.

This is meeting number 98 of the Standing Committee on International Trade. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders, and therefore members are attending in person and remotely using the Zoom application.

I have a few comments. Those online please mute yourself when you are not speaking. I ask all participants to be careful when handling the earpieces in order to prevent feedback, which can be very harmful to our interpreters.

This is a reminder that all comments are to go through the chair. For members in the room, if you wish to speak, please raise your hand. For those on Zoom, please use the “raise hand” function. We have one member online and one presenter today.

Pursuant to Standing Order 108(2), and a motion adopted by the committee on Tuesday, February 6, the committee is resuming its study of the CBSA assessment and revenue management system, CARM.

We have with us today from the Canadian Association of Importers and Exporters, Kim Campbell, past chair. From the Canadian Federation of Independent Business, we have Corinne Pohlmann, executive vice-president, advocacy, by video conference. From the Canadian Society of Customs Brokers, we have Candace Sider, vice-chair, board of directors. From Deloitte, we have Louise Upton, partner. From Federal Express Canada, we have Renate Jalbert, managing director, regulatory affairs. From UPS Canada, we have Tammy Bilodeau, vice-president, customs brokerage and compliance; and Anna Barrera Brason, director, public affairs.

It is wonderful to see a table full of very high-flying executive women.

[Some hon. members]

Hear, hear!

[The Chair, Liberal, Judy Sgro]

It's great to see that things are moving forward in this world of ours.

Welcome to you all.

We will start with opening remarks and then proceed with questions from our members.

Ms. Campbell, you may make an opening statement of up to five minutes.

[Kim Campbell, Past Chair, Canadian Association of Importers and Exporters]

Thank you, Madam Chair and members of the committee, for including the Canadian Association of Importers and Exporters on your agenda to allow for input on this important study.

My name is Kim Campbell. I'm the past chair of our association. We are national trade organization that has been speaking on behalf of the Canadian trade community for almost 90 years.

Since we last met, the CBSA has revised policies that will ensure our border is not completely disrupted on May 13, the current proposed implementation date. We are grateful to the committee for taking on this study and providing industry a forum to discuss remaining large-scale issues.

It was disappointing to hear the CBSA on Tuesday mis-characterize business by making multiple statements that we are not ready, that we are resistant to change and that we just want to maintain the status quo. Four of the witnesses before you today have implemented multiple CBSA IT initiatives over many decades. One of us implemented the current release system you heard about on Tuesday, called ACROSS, while at the CBSA.

Our experience with CARM is not like that of any other project we have undertaken before. The state of this project, with all its delays, lies squarely on the shoulders of the CBSA. The inconvenient truth is that they did not follow a known IT project methodology and, as such, have left us all in a state of not being ready to implement on May 13, because the CBSA has not created an environment for success.

We have submitted comments and would like to highlight a few key areas and recommendations.

We believe the system is not ready. There have been three rounds of controlled testing. Each round has been extremely frustrating, as the process and test scripts have been filled with errors and confusion. This behaviour was experienced at each testing phase to include items that were to be corrected but were not corrected.

The limited number of testers controlled by the CBSA are reporting that a basic accounting filing seems to be stable, but all other items are still an issue. We are still seeing many instances of the system not calculating the duties and taxes correctly.

Fewer than 100 companies have access to the CARM R2 system via testing. This means that the remaining just under 200,000 importers and their service providers will be seeing CARM R2 for the first time when it goes live. This will mean that the amount of support required and system tickets that will be submitted will be more than the CBSA can manage. They have not demonstrated that they have the capacity to manage the fewer than 100 companies testing to date, let alone the massive influx that will occur when it goes live.

They are still changing requirements and providing guidance on core functionality as we speak. They released a revised technical specification document on February 5, which required system changes.

There is an insufficient scale of importers and software companies registered and certified for CARM. The last number of certified software companies was three. There are 11 software companies that the CBSA has stated they still have no communication with.

We did receive the regulatory package on March 13 and have received 22 policy documents over the last few weeks: so much to understand and digest while trying to figure out CARM to include the transition strategy that we are all still waiting for. We know there will still be many more things to come.

I would like to conclude with our recommendations.

We believe the time has come to appoint an independent third party to oversee the project. Too much time and money have been spent on both sides of the fence. We have no confidence in where we are now, and if the CBSA still insists on implementing on May 13, there will be extreme stress imposed on industry in trying to figure it all out.

We will need a third party that can be the oversight and lead us all out of what we inherit. Our preferred hope would be for this party to evaluate where we are and craft a mutually agreed-upon road map to implement responsibly, and that may include a solely Government-of-Canada solution. We have seen a similar pattern of behaviour as was recently reported by the Auditor General on ArriveCAN and believe that we need to have this project also reviewed.

We ask for your support in recommending that the Government of Canada and the CBSA implement CARM responsibly by providing a parallel system allowing importers and service providers that are ready to proceed on May 13. By moving away from the big-bang approach, we will significantly decrease the risk of a flawed implementation.

We look for your support to recommend that the Government of Canada eliminate the GST for resident Canadian importers on the cost of acquiring a customs bond.

We would recommend a review of the CBSA's decision to have Canada's most sensitive protected B trade data on a system outside of the Government of Canada and managed by third party non-government vendors, including the decision to outsource and pay for the use of the software.

We are committed to modernization and a best-in-class border but need the support of the committee and the Government of Canada to ensure we can achieve the best outcome for all Canadians, and without your assistance we do not believe that will happen.

I look forward to answering any questions you may have.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Campbell.

Ms. Pohlmann, you have up to five minutes, please.

[Corinne Pohlmann, Executive Vice-President, Advocacy, Canadian Federation of Independent Business]

Thank you.

Good afternoon.

My name is Corinne Pohlmann. I'm the executive vice-president with the Canadian Federation of Independent Business, which is a non-partisan, not-for-profit organization representing 97,000 small and medium-sized companies across every industry and region in Canada.

I want to share some insights from small businesses engaged in international trade on the challenges they are facing with CARM. My remarks are based on some new data we've just collected from more than 2,000 small business owners, as well as anecdotal feedback we've been getting through our phone lines.

Many small businesses rely on importing goods to meet customer demand, access specialized materials or expand their product offerings. However, with the implementation of CARM, small businesses are starting to encounter a number of new challenges.

First of all, it is important to note that about 65% of small and medium-sized companies actually import goods and/or services. Wholesale, manufacturing, retail and agribusinesses are most likely to be importing goods, and the bigger the business, the more likely they're going to be importing.

Having said that, even among micro-sized businesses, those with four employees or fewer, about one in two are actually involved in importing goods, so the CBSA needs to make sure that CARM is accessible to them and to consider offering alternatives, such as using a broker that allows them to import goods should CARM become too complicated.

When it comes to CARM itself, only 25% of small and medium-sized businesses involved in trade are telling us that they're currently registered with CARM. The smaller the business, the less likely it is that they are registered. For those not registered with CARM, about half are just not aware of it, 22% are not sure whether CARM applies to their business, 16% are relying on their brokers and 11% are confused by the registration process.

Despite the CARM system's aim to streamline and to digitize customs processes, including the assessment and collection of duties and taxes, it has posed many challenges for businesses of all sizes, including micro and small businesses. One of the primary concerns for small businesses is the complexity of the CARM system. About half the small businesses are not importing that often—maybe once or twice a year. As such, navigating the new platform and understanding its intricacies can be daunting.

Many of these businesses have limited resources and expertise in customs procedures, putting them at a competitive disadvantage and a higher risk of making mistakes. Some have even said that the complexities in and challenges of dealing with CARM have actually caused them to reconsider whether it was worth getting involved in international trade at all.

Even though 80% of small and medium-sized businesses actually rely on a customs broker intermediary to assist them with importing, CARM has placed greater administrative responsibilities on small businesses. This added complexity not only consumes valuable time and resources, but also increases the risk of non-compliance and penalties for small businesses unaware of or unable to meet those new obligations.

For example, many have expressed concern with the added cost and complexity associated with the new “release prior to payment” requirements to secure a surety or bond, which have previously been managed by brokers.

Small businesses are also dealing with uncertainty surrounding the accuracy and consistency of CARM assessments. Errors in duty and tax calculations can have serious financial implications for small businesses, potentially impacting their profitability and cash flow.

Most recently, a member contacted us to say that the duty as well as HST on their statements had been charged twice: once through CARM and a second time through their customs broker. We've also had many comments about the fact that when there are these types of discrepancies, it can be a very big challenge to find someone at the CBSA to help them fix it.

While the CARM project aims to modernize customs processes and improve efficiency, its implementation has presented some challenges for small businesses involved in importing. When we asked small business owners whether they felt CARM would make international trade easier, 60% were unsure and more than half felt like they didn't know if CARM had considered the realities of small businesses, simply because they were unaware of what it is and how it works.

Historically, the CBSA has relied on penalties and fines to enforce compliance, which can disproportionately impact small businesses. These fines not only impose financial burdens, but also discourage small businesses from engaging in international trade due to fear of non-compliance. However, we would like to see the CBSA prioritize education and support during the first few years of CARM's full implementation, not just during the first 180 days.

We also would recommend enhancing CARM communications and information by creating tools like detailed guides, FAQs and step-by-step instructions tailored to small businesses and ensuring that the CBSA website content is in plain language. Small businesses should be able to find all these resources very quickly and easily.

Also, we recommend ensuring that all regulatory and policy changes include a comprehensive communication plan aimed at small businesses.

As well, consider providing alternative options to CARM, such as using a broker for all the small firms' importing needs, especially for those small businesses that do not engage in trade on a regular basis.

In conclusion, we would like to see a lengthier transition period that focuses on providing comprehensive training, guidance and support for small businesses, as well as some alternative options to import goods, all of which we believe will help ensure greater small business compliance and acceptance of CARM.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Sider, go ahead, please, for five minutes.

[Candace Sider, Vice-Chair, Board of Directors, Canadian Society of Customs Brokers]

Thank you, Madam Chair, and honourable members of the committee.

My name is Candace Sider, and I am the vice-chair of the board of directors for the Canadian Society of Customs Brokers, CSCB. I am honoured to share the views of Canada's customs brokers concerning the implementation of CARM.

Customs brokers are licensed by the CBSA and act with legal authority on behalf of importers and exporters. Every year, customs brokers handle more than 90% of import transactions for Canada's 227,000 importers. We ensure that accurate duties and taxes are submitted for billions of dollars' worth of goods each year.

Our success in facilitating trade depends on access to technology and processes that keep goods moving.

The CSCB and other trade chain partners have been providing input for more than a decade to ensure that CARM functions to keep goods flowing while not unduly burdening traders. It was meant to be a technological solution that would modernize the border and revenue collection by making it easier for traders to interact with the government.

Unfortunately, the CBSA's approach to CARM implementation does not reflect or address the concerns that we and others have been raising. Furthermore, on Tuesday we heard several statements by CBSA executive vice-president Ted Gallivan that we feel require clarification.

During his testimony, Mr. Gallivan stated that CARM implementation would be delayed from October 2023 until May 2024 because the trade community was not ready. It is true that customs brokers and importers are not aligned with the CBSA's view that CARM will be ready to go live in May 2024 in its current state, which, to be frank, has a myriad of deficiencies that need to be addressed prior to its going live.

Our members are concerned about the impacts on small or infrequent importers, especially due to the onerous registration process. They are also frustrated by the lack of support from the CBSA and the long response times for help desk issues and dispute resolution.

We experienced new issues daily during the system testing. The CBSA has advised that some of the key issues and defects will not be resolved before CARM goes live in May.

For example, system testing revealed defects in essential processes like the calculation of duties and taxes. Automated calculations appear to be based on a fundamental misunderstanding of how processes like duty remission work. It is not acceptable for Mr. Gallivan to state that the errors result from trade simply calculating duties and taxes differently than the CBSA does.

In the test environment, our members purposely entered incorrect duty rates to see if CARM would detect the errors. CARM did not detect the errors and accepted the inaccurate calculations. If these defects are not addressed, the result will be inaccurate revenue assessment and collection by the government and amplification of the revenue leakage problem that CARM was supposed to address.

Mr. Gallivan's testimony on Tuesday also demonstrated contradictory messaging from the CBSA, which contributes to uncertainty for importers. On the issue of financial security, Mr. Gallivan advised the committee that importers would require only $5,000 in security to have goods released without payment of duties and taxes. However, what he didn't tell you is that the CBSA has been advising the trade community for at least five years that the minimum security amount would be $25,000. He also didn't tell you that draft policy guidance shared with the trade community in the past two weeks stated that the minimum bond amount would be $5,000 but that the policy guidance was later adjusted to read $25,000. The lack of clarity by the CBSA on important issues is creating confusion and uncertainty for customs brokers and their clients.

Similarly, Mr. Gallivan also advised the committee that the CBSA had several layers of contingency planning if the May 13 go live does not go as planned. He referred to one contingency plan as a “rollback”, which would mean a return to existing systems.

The first time traders heard of this possibility was during Mr. Gallivan's testimony. We have been told for close to a decade that the CBSA must turn off existing systems to allow the new CARM functionality to work and that a big-bang approach to implementation was the only option for CARM. Therefore, customs brokers and importers have invested millions of dollars in reprogramming their own systems. Once trade begins the cutover to CARM, a rollback to older systems will not be an option.

Canada cannot afford to implement an IT system with key deficiencies that will impact cross-border flows and force manual processing and workarounds to keep trade flowing.

Traders need a functional system where the CBSA has addressed all design flaws to ensure that trade continues to flow and revenue is collected. With our lack of confidence in the current solution, we recommend a full postponement of the go live until, at the earliest, October 2024.

We welcome the opportunity to support this committee in its study of CARM. I would be pleased to answer any questions.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Upton, you have up to five minutes, please.

[Louise Upton, Partner, Deloitte]

Madam Chair and honourable members of the committee, thank you for the opportunity to appear today.

Before we begin, I would like to acknowledge that we are here today on the traditional unceded territory of the Anishinabe Algonquin people.

On behalf of the team at Deloitte Canada, we are proud to discuss the project and work with members of Canada's public service. I will provide an overview of Deloitte's involvement in the CBSA revenue management project, also known as CARM, and its path to implementation, and an overview of the benefits CARM will bring to the people of Canada.

As the leading professional services firm in the country, fully owned by Canadians, we are proud of our past and ongoing projects with the Government of Canada, including our work with the CBSA, which have resulted from Canada’s open, transparent and competitive procurement processes. We are committed to the Government of Canada’s procurement and security policies. We perform our work in strict accordance with the highest professional standards. Our reputation is built on our credibility. With more than 167 years of experience as a Canadian firm, we have grown into the organization we are today because of the trust our clients have in our people and our values.

For my part, I have spent much of my career, more than 27 years, working with public sector clients on large digital transformation initiatives. My experience lies in leading large teams on highly complex projects.

CARM is designed to facilitate legitimate trade, improve compliance and revenue collection, and help secure Canada's borders.

On the strength of our specialized experience, Deloitte was retained through a competitive procurement process to act as systems integrator for the CARM project, implementing the policies and programs developed and decided upon by the Government of Canada. We are working closely with the CBSA to build this multi-year digital initiative to modernize and streamline the process of importing commercial goods, eliminate redundancies and streamline solutions.

CARM will be the first Government of Canada enterprise resource planning, or ERP, solution based on the SAP platform of scale hosted in a cloud environment. This represents a critical step in ensuring that the Government of Canada is prepared for the service delivery standards of tomorrow to serve Canadians.

We are taking a thoughtful and measured approach to implementation. CARM’s rollout has been structured as a series of go lives to help mitigate risk, working with stakeholders along the way at each step. The CARM client portal, for example, was launched in 2021 with publicly accessible onboarding documentation. We have gone through multiple rounds of testing of the system, executing more than 7,000 test case scenarios.

We have been working tirelessly to ensure a smooth transition through ongoing project management support, change enablement activities and ongoing environment management. This approach seeks to minimize the disruption to stakeholders within the Government of Canada and to businesses and importers.

This is a material change, and requires careful planning to help minimize impacts. I feel confident, based on my 30 years of experience and the work put into this program by all parties, that the solution is prepared to go live and to handle issues as they arise. The CARM project has been a journey of advancements. Release two is not the end of these advancements. This is not a “one and done” solution. Using the cloud, the CBSA will be able to continue to enhance and evolve CARM, allowing for a much more agile solution in a dynamic environment.

Once fully implemented, CARM will automate and simplify key business processes and offer online self-service tools to help the trade community do business in Canada better and faster.

The purpose of CARM is to eliminate duplicative data processing and promote greater transparency. It will provide better information so that CBSA can more accurately check commercial compliance.

At this point, I'd like to acknowledge the other panellists here today.

Your industry insights have been valuable, and they continue to be as we work through the various stages of CARM's rollout under the direction of the CBSA. CARM is the culmination of our collective efforts, and is a testament to the power of public and private collaboration in an era of rapid technology advancement.

Thank you again, Madam Chair. Deloitte is proud to be part of this work, and we look forward to continuing to work on behalf of Canadians.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Jalbert, go ahead for up to five minutes, please.

[Renate Jalbert, Managing Director, Regulatory Affairs, Federal Express Canada Ltd.]

Thank you.

Good afternoon, Chair and members of the committee. Thank you for the invitation to be with you here today as you continue your important study on the CARM initiative.

My name is Renate Jalbert. I'm the managing director of regulatory affairs at FedEx Express Canada. I'm here to share our perspective on how we can work towards the successful implementation of CARM while avoiding potential delays at the border and increased burdens on Canadian businesses. Our recommendations include making registration on the CARM portal optional, as well as continuing the use of the express carrier or broker security to facilitate the release of goods at customs.

With our fleet of aircraft and vehicles, and an unmatched logistics network, we ensure the timely delivery of over 14 million shipments on average each business day. Our operations support thousands of Canadian jobs, link businesses big and small across our vast country to global markets, and facilitate smooth and efficient trade. Personally, I bring to the table many years of experience in logistics and international trade. I have a good understanding of the complexities and challenges of the supply chain.

Our collaboration with the CBSA has been long-standing and invaluable. FedEx has a history of investing millions of dollars in communities across Canada through our people, facilities and infrastructure, as well as participating in CBSA projects, pilots and programs. As a result of our decades-long collaboration, FedEx has an appreciation for the CBSA's vision in developing CARM. CARM, while aimed at modernizing duty and tax collection on goods imported into Canada, presents significant challenges and concerns, particularly as we approach the implementation of its second phase.

Over the past few years, members of the Express Carrier Coalition, including FedEx, have engaged in discussions with the CBSA to highlight the pressing issues and complexities surrounding the upcoming CARM release two. Our concerns are primarily centred on the readiness of the system, the adequacy of policy guidelines and the unprecedented burdens it places on importers, especially small and medium-sized enterprises. The current framework creates new barriers for commercial importers, which could impact Canada's reputation as a reliable trading partner.

To address these challenges, FedEx has aligned with the recommendations put forward by the Express Carrier Coalition to improve the CARM framework.

Firstly, we advocate for limiting the scope of release two to the transition from the B3 accounting document to the commercial customs accounting declaration, known as CAD.

Further, we recommend making registration on the CARM client portal optional rather than mandatory. This approach would mitigate the risk of disruptions and support continued smooth trade flows.

Furthermore, we suggest permanently maintaining the use of express carrier and broker business numbers and bonds as an option for shipment release, alleviating the burden on importers to meet these significant, complex new requirements.

Additionally, removing barriers for non-resident importers and finalizing policies, regulations and implementation guidelines are crucial steps towards ensuring a successful transition. Non-resident importers and the ever-growing e-commerce sector have not been adequately addressed in the CARM design or policies. With CARM, there is an expectation that non-resident importers register directly with provinces for the payment of PST and HST. This is a significant change to the current process, where the express industry and brokers assess the PST and HST and remit them directly to the government. The self-assessment of non-resident importers creates a potential gap in revenue collection of provincial taxes.

CARM must be implemented in a way that supports rather than complicates the activities of businesses engaged in imports and exports. Furthermore, the Express Carrier Coalition's shared concerns underscore the need for a collaborative approach in addressing the challenges posed by CARM. Our unified voice highlights the urgent need for adjustments in the project's implementation strategy to prevent potential negative impacts on Canada's economy and our standing as a trusted trading partner.

We propose aiming to refine the CARM system to be more aligned with the needs and capacities of all interest holders involved in trade. We believe the CBSA can achieve its objectives of modernizing the duty and tax collection process without hindering the flow of goods across borders.

Thank you again for the opportunity to share our perspective. We look forward to a continued dialogue and this committee's assistance in advancing these matters on behalf of the industry. I look forward to any questions you may have.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Bilodeau, go ahead, please.

[Tammy Bilodeau, Vice President, Customs Brokerage and Compliance, UPS Canada]

Good afternoon. Thank you so much for the invitation to speak in front of the standing committee on the CBSA's CARM project.

My name is Tammy Bilodeau, and I'm the vice-president of customs brokerage and compliance for UPS Canada. I'm here with my colleague, Anna Barrera.

UPS Canada is a part of the express carrier coalition, which also includes DHL International, FB Canada Express, Federal Express Canada, FedEx Logistics and Purolator. Collectively, we employ thousands of Canadian workers, and we import and export millions of commercial shipments each and every year.

To begin with, we certainly support the federal government's objectives to modernize its systems to collect dues and taxes. That is why, as you've heard many of my colleagues say, we've been engaged with the CBSA in the development of CARM over several years, investing time and resources to provide our input, to conduct systems testing and to spend our own capital to build new internal systems to synchronize with CARM. We value our partnerships and our working relationships with the CBSA, and we certainly appreciate and acknowledge the transition measures that it's recently announced: the extension of the release prior to payment for 180 days and the use of the broker BN for a one-year period.

Although these short-term concessions will mitigate the immediate risk to border fluidity, they do not address the long-term implications that these requirements are going to have on Canada's trade regime. UPS and the express carrier coalition have raised three mission-critical issues that will adversely impact the fluidity of legitimate shipments at the border. Without resolution, we expect that CARM will deter cross-border activity and result in abandoned shipments, which will lead to warehouse capacity constraints. Over time, the complexity of CARM will add friction to the Canada-U.S. border that will put Canada's reputation as a viable global trading partner at risk. I think we heard testimony from Ms. Pohlmann regarding small businesses, and that's exactly what they're saying and experiencing.

First, as we've heard, CARM creates an unrealistic expectation for businesses to participate in requirements for importing into Canada that are unprecedented around the world, including the need to register on the CARM client portal and post financial security. This has affected and will continue to disproportionately affect small business, since the CARM registration, as you've heard many times, is difficult to navigate. In fact, even after two years of phase 1 implementation, less than 30% of all commercial importers, including low-value commercial importers, have registered on CARM, despite significant investment by industry to encourage customer registration.

Second, the CBSA has not provided clear or timely policy guidance or a transition plan to manage real-world risks to business and trade. With only 35 days before release 2, CARM has introduced an overwhelming amount of new information. For example, as you heard Ms. Campbell mention, with only a two-week consultation period, the CBSA is seeking feedback on 19 D-memoranda updates. It was only on February 28 that the CBSA communicated the CARM transition plan, which includes a surprising cutover period of 13 to 16 days, during which we as an industry cannot account for or remit duties and taxes. Hence, we cannot bill our customers. Overall, the volume and complexity of new information and an incomplete transition plan make it extremely difficult for industry partners to execute and manage this change.

Third, the CBSA has not demonstrated the readiness of the new CARM system. Many documented systems issues have been raised, with no known resolutions. A contingency plan has not yet been shared with industry.

In conclusion, we believe that these concerns will impact the government's ability to successfully complete a transition to CARM on May 13, and we recommend four practical actions for the CBSA's smooth implementation.

First, limit the scope of release 2 and shift to an opt-in importer registration system. Second, provide at least 30 days' notice for public consultation on the proposed policy changes related to CARM. Third, develop an adequate transition and contingency plan with industry before moving to release 2, and finally, demonstrate that the new CARM system meets a reasonable standard of performance before full implementation.

Thank you very much, and I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to our members.

Mr. Jeneroux, you have six minutes, please.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Madam Chair.

I appreciate everybody being here today and taking the time to join us on a Thursday.

I'm going to do a quick overview, I guess, of what we heard in the last committee from Mr. Gallivan and the CBSA.

They said that this started back in 2010, 14 years ago, and that the original scope of the contract was $370 million. It has now gone to $438 million, with a potential for $526 million. In the history, the total number of importers who have crossed the border in Canada is 200,000. He says that only 24,000 people are enrolled to date, with, I believe, as you said, Ms. Bilodeau, 35 days left.

My first question will be for Madam Upton.

How much is the CBSA contract with Deloitte for?

[Louise Upton]

As you would have heard and as I observed with the CBSA this past Tuesday, to date our payments are $182 million. I can confirm that's what it is.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

There are two contracts that we've been made aware of, contract 165038 and contract 47064, that indicate a value of $322 million and $32 million. Are those in conjunction with the CARM system?

[Louise Upton]

Unfortunately, I don't have the contract numbers right in front of me, but I assume that one might be in relation to CARM. The CARM contract actually contains two components. One is the building of the solution, and the other is the maintenance of the solution post build.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Then you would agree that $182 million is not an accurate number. I guess it's going to go up in terms of maintenance of the system. Is that what you'd testify?

[Louise Upton]

I believe that what they said on Tuesday was that we have been paid to date $182 million. I can confirm that we do have a contract to operate the solution post build life as well.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

What is the total amount that Deloitte has been paid or can go up to and bill the government for?

[Louise Upton]

The total amount would be $20 million a year for maintenance, which includes new functionality and new upgrades to the SAP solution and that sort of thing.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

That's $20 million each year until when?

[Louise Upton]

The way the contract is structured, the first six years are locked in, and then every year after that is an optional year that the government can then review and decide on, should they want to bring it in-house.