International Trade Committee on Oct. 2nd, 2024

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

Welcome to meeting number 118 of the Standing Committee on International Trade.

We will spend the first hour and a half with witnesses and the last half hour considering a motion placed last week.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, February 6, 2024, the committee is resuming a study of the CBSA assessment and revenue management system, referred to as CARM.

We have with us today, for the Canadian Association of Importers and Exporters, Kim Campbell, and from the Canadian Society of Customs Brokers, Candace Sider, vice-chair, board of directors.

From Deloitte, we have Louise Upton, partner, by video conference. The other partner, Matthew Day, is unable to attend today because his headset did not arrive in time, so we just have Louise with us today.

From Federal Express Canada we have Renate Jalbert, managing director, regulatory affairs, by video conference. We also have, from Otimo Customs, Barb Miller, president. Finally, from UPS Canada, we have Tammy Bilodeau, vice-president, customs brokerage and compliance.

Welcome, all.

We will, as agreed previously, forgo opening remarks and immediately go into rounds of questions.

We'll start with Mr. Baldinelli, please, for six minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I'd like to take this opportunity to thank the witnesses for being with us this afternoon to answer our questions.

I have some concerns. We're getting close to the blackout period, which is October 4. Once we're there, this notion called the “big bang” is in effect.

I want to go to Ms. Upton, if I could, right away.

Ms. Upton, in our previous hearing, we had Mr. Gallivan from the CBSA. I mean, he wouldn't come right out and describe—I'd call it verbal gymnastics—the whole question of the ownership of the CARM, so does Deloitte own CARM, the portal, yes or no?

[Louise Upton, Partner, Deloitte]

What I can tell you is that the CARM is a solution developed on a platform by Deloitte. The CBSA has exclusive licensing rights to the platform and owns the IP rights to any CARM-specific elements.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you.

Now, in terms of going into the blackout period, are Deloitte staff assisting the CBSA? If so, can you indicate to us how many staff are being allocated to assist with this?

[Louise Upton]

Deloitte staff are there as the technical support, so they're supporting the solution from a technical perspective. There are approximately 150 to 170 people who are available to provide that support during the cutover and go-live periods.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That would be after the blackout period. Then, once you go live, there are up to 100...? Could you repeat that number again, the number of Deloitte staff who could be allocated to work on this?

[Louise Upton]

During the cutover period and after the go-live period, there are between 150 to 170 staff who could be allocated for support, depending on volume and issues that could arise.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Now, would the cost that would be incurred be in addition to the, I believe, up to $123 million that's been allocated so far to Deloitte for this project?

[Louise Upton]

That cost is included in the overall contract as it was defined at the beginning of the project, so the support and the cutover are part of the original contracting.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you.

I'm going to go over to Ms. Campbell now. I just want to get her comments on a letter that we received on October 1 from Mr. Gallivan. It's almost the same example as with Mr. Weber when he was here the other day, indicating just before his appearance that CBSA provided some additional information and additional clarification on aspects.

Ms. Campbell, on page 2 of the letter, Mr. Gallivan talks to the fact that you mentioned that 40 companies have been allowed to test CARM. In fact, he mentions that about “73 companies participated in the first exercise”. You were just off by four, because it's now currently 44 companies. Why was that number reduced?

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

First of all, I'm not familiar with that letter, so thank you for providing me that information.

I would say a couple of things. I'll just refer members back to the written statement that I provided, in which I did say about 100 companies. I think what we're getting tied up with here is who is allowed to test. In the first round, we actually had 75 entities, and then in the second round they moved it down to 40.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Now, they also talk about having a help desk with four-hour processing times. My understanding is that it's only for perishables and emergency situations.

From those 44 testers, I'm hearing that there are still unresolved tickets that the government can't resolve in a timely manner. If they can't resolve the tickets from 44 testers, how are they going to do it for the 90,000-plus people who are registered for the system?

[Kim Campbell]

We agree, and I think there are a couple of things to unbundle there.

First of all, again, I'll just restate. We think there are 200,000 people. Again, let's just say it's 100,000. We'll give Mr. Gallivan the benefit of the doubt on that number. That's still just under 200,000 people who will be seeing it for the first time.

There are going to be a lot of questions just about how to get in and use it. Then, there's the piece that you're referring to, the ticketing. That's around the systems issues. Then, there's the third part, which is the help desk. The help desk is really where a lot of that stuff is facilitated in terms of business number.

There are various aspects that you would have to figure out, one, how to negotiate, and two, who to go to, and they all have various levels of responses.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That doesn't even talk about the reconciliation, if that's requested as part of a ticket. That could take months, and it's a simple cut-and-paste. We spent $500 million on creating a system, yet a CBSA officer would simply have to go in there and cut and paste. I find that kind of ludicrous. It's a kind of IT 101 for dummies. I might as well just say, “Turn it off and reboot.” It's crazy.

You have raised a concern—and this is important too—about data security for CARM. You have indicated that CARM data resides on third party servers. Can you go further on that and explain some of your concerns?

[Kim Campbell]

We do believe that it is sitting in an unprotected cloud server environment. We don't dispute that cloud is a good way to go, but on where it is, in our protected B status, in conjunction with the fact that we do have an agreement with the U.S. on sharing export data, we're extremely concerned that this data is not being properly protected and managed by the government.

[The Chair, Liberal, Judy Sgro]

Thank you.

We'll go to Mr. Sidhu, please, for six minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Madam Chair.

Thanks to our witnesses for being here today.

The CARM project, as many of you are aware, has been in the works for probably over a decade now, through different governments. It's an important program that will help to increase government revenues and transparency, modernize the system and, of course, add some functionalities.

Today, I think it's important to say why we're bringing CARM forward. It's important for those who are watching at home, but it's also important for us to understand what are some of the procedures that are in place to help importers and trade facilitators ensure that trade goes without any issues come the blackout date.

I had a question in regard to the ticketing system. From some examples from you guys when you filed tickets, is it a complex situation? Is it a simple fix? How long does that traditionally take? Could I get some feedback from you?

I can start with Ms. Sider.

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

Thank you for that question.

They could be complex, or they could be very simple. They're all managed in the same ticketing system.

A ticket is submitted to CBSA, and the response that comes back is that they will respond within two to 10 business days, depending on the severity of the financial issue. If it's an issue that's related to the back-end accounts receivable ledger, it could conceivably take up to 10 days to resolve.

What we've seen historically is that it's a number of days to resolve the tickets, and in some cases it has been weeks. They could be subjects in terms of orders in council that are not calculating properly or excise tax that is not calculating properly. There are a number of different issues that could present themselves in terms of how we manage those tickets.

[Maninder Sidhu, Liberal, Brampton East, ON]

Ms. Sider, I know you're here for the Canadian Society of Customs Brokers, but you also work for probably one of the largest customs brokers in North America. I guess, based on volume, that you speak with that experience.

Ms. Miller, can you add some context to this?

[Barb Miller, President, Otimo Customs Inc.]

I think the key thing to establish is that there are two support desks that would come into rise if there are issues with the system. With the CARM system, it is a back-end system. If there's an issue with release, if there's an issue with something that you can't finalize and it could be system-related, you would actually call a different number on that aspect and probably get a quicker resolve.

Putting them into the same bucket is not realistic, understanding that there is a significant difference between the front end and the back end, and CARM is a 100% back-end system.

[Maninder Sidhu, Liberal, Brampton East, ON]

Therefore, for an OIC, as we heard from Ms. Sider, would you call CBSA instead of filing a ticket?

[Barb Miller]

Yes, 100%. I would not log a CARM ticket for that.

[Maninder Sidhu, Liberal, Brampton East, ON]

How quick is the response time that you're getting?

[Barb Miller]

Depending on what time of day you're calling, it's typically approximately a two-hour response time.

[Maninder Sidhu, Liberal, Brampton East, ON]

Okay.