International Trade Committee on Oct. 2nd, 2024

[Maninder Sidhu, Liberal, Brampton East, ON]

Maybe I can come back to this, but Ms. Bilodeau, what would be helpful in terms of onboarding more clients? Some stakeholders are saying they're ready to go. We're hearing from you that a lot of your import clients may not be ready to go. What's the difference there, and how can CBSA help onboard new clients? I'll probably come back to that in my next round.

[Tammy Bilodeau]

I'm sorry, but do you want me to answer now, or are we coming back...?

[The Chair, Liberal, Judy Sgro]

Yes, please go ahead. We need the answer.

[Tammy Bilodeau]

What would help onboarding is increased outreach. I know that we've talked about not only small importers but non-resident importers as being areas of concern. There's been a recent webinar with CBSA for non-resident importers, but that was only within, I think, the last two weeks. One webinar with an outreach to such a broad base of customers that are global is very problematic, and that's definitely an area where we would appreciate more support, onboarding that particular area of customers.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, go ahead for two and a half minutes, please.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

I think it is necessary to restate that even those who are the most skeptical are still in favour of modernizing the system. There is no opposition to its modernization.

I am thinking of you here, Ms. Sider and Ms. Campbell. Could you very quickly tell us more about it?

[Kim Campbell]

Of course, we've been at the table since 2010 working on this. I think it's really important to also consider, as you're trying to make an informed decision here....

I reflected upon what happened over the last 10 years, and in this period of time we actually implemented single window, which was managed by Canada customs—an amazing team. We put it in without fanfare, quietly. It cost us $30 million, all contained within CBSA, within this period of time. We also put in an export system—again an amazing team at CBSA within the IT group—for less than $8 million. We work together. Is it perfect? No. We'd like some changes. We can't get any yet, because we're all working on CARM, but it's proof that industry wants to modernize and will work with CBSA to move us all forward. Hopefully, that will help.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Yes, I think it is important to specify once more that there is no objection in principle to the idea of modernization; everybody agrees on that.

Ms. Sider, in your brief, you said you were skeptical about the Canada Border Services Agency’s statement claiming that the calculation errors were corrected. Could you explain why?

[Candace Sider]

Yes. We're still seeing some calculation errors, even as of last week, on some of the duty deferrals, the excise tax tables, such that, after we transmitted down the customs accounting declaration, what we received back had absolutely no calculation on excise tax. For a system that is supposed to ensure the proper allocation of duties and taxes, we have some concerns. Obviously, it's not working as intended.

I think that goes back to what Mr. Gallivan said in his testimony, that out of 2,000 transactions they did.... Again, for 2,000 transactions out of thousands of transactions that are actually transmitted on a daily basis to CBSA and processed, what's that algorithm? The math is correct, but the interpretation of the legislation and the regulation raises a lot of red flags and concerns, and I think that's what we saw historically. When a question is raised, it goes back to CBSA and to “team CARM”, and oftentimes it has to go back to the program area. In the program area, that's where we find that there's a disconnect between the policy and the program and operational support.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings, go ahead for two and a half minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thanks.

I'm going to turn to Ms. Campbell.

We've had a six-month delay on this already. We've heard some testimony here that some people don't like the rigidness of all this, the “big bang” part of how people don't have the option of maybe waiting a little longer to join in. I guess I'm really struggling here to figure out what we are going to gain by waiting another six months, when it seems that there are some structural disagreements. We hear that CBSA hasn't had good communications. Personally, I'm kind of doubtful that's going to change in six months, if it's a problem now. We've heard that this is going to cost Canada and a lot of companies money if we delay. I'm just trying to figure out the real benefit of another six-month delay.

[Kim Campbell]

It's a very difficult position we're all in, actually, not only we as industry, but also you as people, trying to figure out the right thing to do. I totally appreciate that.

You're right. It might not make a difference if we don't do anything different. That's why, again, we continue to advocate for the third party. We just really need somebody in there who can look objectively at everything and create the framework for it. For us, I agree that if we just do six months and think something is going to be different, I don't think it will, unless we do something different. That's one of the things we recommend.

The other thing is, too, though, even if we do go, we're very worried about what happens if we're right. Now what do we do? Now we're going to be struggling around, trying to figure it all out. I totally understand the perspective that “we don't want to spend”. There's obviously a money implication here. The things we just talked about with Candace.... The ironic part of it is that industry is actually fighting more to say, “You're not collecting the money right when we go live”. We know there are issues around what Candace just said about excise tax, surtax and all of these additional things that we don't think it's calculating, and we don't even know what to do.

We also haven't even talked about the provincial sales tax, and I know my colleague on the phone from FedEx is a passionate person on this topic. Today we remit and collect the duties, and we remit on behalf of our clients. CBSA came up to us two weeks ago and said, “No, no. All these importers are going to have to self-remit,” which is an impossible situation, and they don't even know. Ms. Jalbert, I'm sure you can give the number. I think we're looking at $250 million, potentially, off the table in terms of money not collected, just on that issue alone.

No. On most of the topics we're talking about, we're fighting to say that we're worried you're going to lose revenue. This is why we're still continuing to caution and to raise the red flag; we're worried about what's going to be left on the table because of all the things we're still seeing that aren't being corrected.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry, Mr. Cannings.

We will now go to Mr. Baldinelli or Mr. Williams.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you.

This is for Ms. Campbell or Ms. Sider.

I know we talked earlier about a letter we received from Mr. Gallivan. We received a letter today from Mr. Mark Weber, who's the national president of the Customs and Immigration Union. He stated:

Based on...the feedback we received from our members regarding CARM, and despite Mr. Gallivan's claims, it is clear that CBSA personnel have not been provided with the level of training necessary to ensure a headache-free implementation of the platform. In fact, during the CIU National Board of Directors meeting that took place just last week, the overall sentiment towards CARM's launch continued to be one of apprehension, with a sense that commercial operations would be overwhelmed

Does that give just more indication that this is a system that's just not ready to go live?

[Kim Campbell]

In my opinion, yes. In the statement I submitted to the committee last week, I was very interested to hear Mr. Weber's perspective, because maybe we were missing some of the information. Obviously, we were very alarmed to hear what he had to say, because it certainly is what our members are hearing. As we talk to CBSA officers, they're reporting that. I put that in my statement, and to have him actually validate that was very alarming.

[Ryan Williams, Conservative, Bay of Quinte, ON]

You heard in my questioning with Ms. Upton, saying that Deloitte's not responsible for the training; it's with the CBSA. Now we're hearing that the CBSA officers haven't been trained.

What's happening with the training? Your members are the ones saying that they're not getting this; the training wasn't offered. Maybe just give us a little more insight into what's happened with the training aspect of this.

[Kim Campbell]

I can certainly, obviously, refer to my colleagues. I think what we're feeling is that there's 100% been training. They do webinars. They're online. You can take a look at them, but they're very fixated on getting people onto the portal. All of the pieces we're talking about are not in the training. These are the pieces that are still a big disconnect for us.

Again, we have a lot of questions in terms of policy interpretations, what Ms. Sider's talking about and things that are going to happen at the border, and we're still waiting to hear. I was very leaned in to listen and to hear what Ms. Upton said, because we're still waiting to hear what the transition plan is. We were called onto a meeting on Friday. We were given some information about the cutover period that's starting tomorrow, but we were also told they were not going to talk to us about the transition plan. They would have a subsequent meeting on that sometime in the week of October 14.

Having put in a system in the government myself, I'm shocked to hear that we're not talking about what happens if it doesn't work the way we want it to work. Typically, there's always, obviously, an issue around cutover. We would have worked with our importer community. To be in this position on this project.... I find it quite shocking that we don't have a transition plan.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Let's get that done, Ms. Upton. Publicly you hear the concerns here, so what is the answer for the transition plan, and what's going to happen?

[Louise Upton]

There has been a transition plan in place. It has, as I think I said earlier, 2,000-plus lines. I think the other important part to that plan is that we have rehearsed the cutover of this solution over seven times now successfully. We also successfully launched it internally in May of this year.

There's no reason to believe that we would not have a successful launch on October 21: seven times doing the cutover, seven times doing 6.7 billion records and data migration, bringing up the system and successfully launching it internally in May 2024.

[Ryan Williams, Conservative, Bay of Quinte, ON]

I know, Ms. Upton, that you're saying this to the committee and to Parliament, but it's the stakeholders we're hearing from who don't have that same satisfaction. They're not convinced that you've done that. I'll ask again, what can be done from Deloitte and from CBSA to further assure these members, so that they feel confident that this is going to go through, that it's not just you saying that it's going to happen?

[Louise Upton]

I think the important part here is the fact that this continues to be a conversation that CBSA is having with the trade chain partners. As you just heard Ms. Campbell say, there is another meeting scheduled to talk about the remainder of the transition plan.

On the CARM side, there is a detailed, line-by-line, minute-by-minute transition plan to get us to a successful cutover. Then there's a plan for support, once the system is up and live, of continuing to support the solution after October 21.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will have Ms. Fortier, please, for five minutes. Ms. Fortier is down as our last speaker and the end of round three.

Go ahead, please.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Madam Chair.

Again, thank you to all of you for being here today.

I think we all agree that modernization of the system is important. The delay is the problem: Do we delay or not? The impacts of delaying and the impacts of pursuing, I believe, are the questions that we're arguing today. I understand that we've heard from those that are not ready, but I really want to bring forward those that are ready.

Again, this is from the letter I was citing and quoting from the last time I spoke, sent to the chair from Magna on September 30. I'd like to share another important quote from a business that believes we should be going forward. It says:

Every additional delay risks eroding the progress, and the costs associated with maintaining readiness will continue to rise unnecessarily. We recognize that the transition will bring challenges, as all major changes do. However, these challenges can be addressed as they arise, rather than avoided through indefinite postponements. Importantly, CARM does not affect the release of goods at the border, meaning any postlaunch issues will primarily occur within the portal, which can be resolved without significant disruption to trade.

I found that important to share with members of the committee and also with Canadians who are listening.

For those businesses that are ready, that have invested small or large amounts to get to the fact that they're ready, can you, Madam Upton, continue and share what are the risks of delaying for those businesses that are ready, small or large?

[Louise Upton]

As I think I may have alluded to earlier, the risk is continuing with the uncertainty. They're never quite sure when they need to be ready. They've invested a lot in their technologies themselves and have said to us that they're ready to turn this on and want to use the benefits of CARM.

As you know, it's been mentioned several times that this is a modernization of the data and the ability for Canada to compete globally in having access to that data. Having that information, putting the portal in the hands of the trade chain partners, big and small, is very important. Continuing to not go forward when they are telling us that they're ready, that they need this and want this, continues to pose the challenge—

[The Chair, Liberal, Judy Sgro]

Excuse me, Ms. Upton. I'm sorry to interrupt.

Could you bring the mike down a bit further, please? Speak a little more loudly into it, please.