International Trade Committee on Oct. 2nd, 2024

[Kim Campbell]

I want to add some more information, because our members are certainly not reporting that turnaround time.

Barb is 100% right. There's the ticketing system around systems issues, but there's also the help desk.

Maybe, Barb, there's a different number.

This is part of our challenge. We are still looking for processes on what to do. The rigour is that, right now, you can call the help desk and wait quite a long time for somebody to answer. Then you're given a ticket, and they tell you they will get back to you in a few days, or a day. Then you get another response saying, “This is the day we're going to talk to you about this issue at the help desk.”

The other way is filling out a form. You're going to get the same behaviour. You'll get an acknowledgement, and then it will be days before you actually get a response, followed up by a set time appointment.

Our members are not reporting that same turnaround time.

[Maninder Sidhu, Liberal, Brampton East, ON]

It's my understanding that the resources have already been put behind this help desk. As you know, when any new system launches, there are always kinks to be worked out. We heard that 99% of the time it's fine. The 1% is the focus, and CBSA is putting resources behind that to help resolve it. It's good to hear about the help desk and how we can further streamline some of the issues you might foresee. That's not to say they won't be there.

I was also talking to some stakeholders in regard to registration for importers during the blackout period. For those watching at home, the blackout period starts this Friday and goes until October 21.

I was told that during the blackout period, you cannot register an import number. If you're a new business and want to import into Canada, you cannot register an import number during that period of time. However, there is customs notice 24-29.

It says:

New commercial importers, including non-resident importers, requiring a business number (BN) and importer program account (RM) in order to obtain release for their importation of commercial goods can continue to work with the CRA to obtain a BN, and the CBSA to obtain the RM account [number] for their importing activities via the interim process established in May 2024.

Can you tell me about this interim process that was established in May?

Maybe that's for Ms. Miller.

[Barb Miller]

The key thing to recognize is that there was a significant change to the import process when customs notice 24-18 came out. They eliminated the broker support line that helped us register people.

However, the registration process is not a CBSA issue. It's a CRA issue. If you have a new importer or company, there's still a process whereby they have to register with CRA. If they are trying to get an import number or get an import business number turned on.... That process was rectified and communicated. It's possibly not the greatest, but when that customs notice came out in May.... There are services where we can actually report in and get that set up.

It is delaying—

[Maninder Sidhu, Liberal, Brampton East, ON]

What does that process look like, very quickly?

[Barb Miller]

The process means we take that same documentation and send it in to the help desk. That is currently where we send in our broker tickets for registration. We send it in and wait for a response. Typically, they'll tell you—if it's a Canadian company—that we will get a response that turns on a business number that is already registered. As a company in Canada, we have a response time of typically a day, to date. If it's a non-resident who is not registered in Canada, the wait time for that business number is already anywhere from four to six weeks. That was pre-CARM.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, go ahead for six minutes, please.

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

Thank you, Madam Chair.

I thank all the witnesses for being here.

As my colleague said earlier, we received a letter from the Canada Border Services Agency. This letter refutes the testimony from several witnesses the committee heard last week.

This is what is written in the letter:

… The Committee heard testimony that the CBSA’s commitment to respond to urgent program account requests within four hours 80% of the time was not being fulfilled—several cases were cited by Ms. Bilodeau from UPS Canada in which calls had gone several days without response. The CBSA’s reporting on the processing of urgent requests indicate that 85% of all urgent requests received have been actioned in less than four hours—this following a period of time in which over 35,000 requests for program accounts were received and during which the CBSA experienced a 500% increase in call volumes. Ms. Bilodeau also testified that only 20% of her customers had registered in the CARM Client Portal. This testimony does not take into account that some of her clients may have gone out of business, may have only imported into Canada one time, or may in fact be registered but as a client of another company.

Ms. Campbell, you have the opportunity to respond to some of the statements contained in this letter.

Ms. Bilodeau, would you like to comment on this refutation of your testimony?

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

Absolutely. I can't speak to the number of calls the government is receiving. I certainly can't attest to or deny what it's reporting. I can only report on our experience as an organization. As I indicated in my last testimony, it's not been our experience that we've received a response back within 24 hours on tickets that have been opened by our organization as we were going through the registration and the testing process.

That being said, I also testified to the fact that at UPS we have diligently worked with our customers. We've done considerable outreach to our customers to try to get them onboarded. We are obviously invested in this process being successful as well. The unfortunate thing is that the success of CARM implementation is predicated on adoption by all commercial importers, as we know. The fact of the matter, in the case of UPS and some of our counterparts, is that we have far less than 50% of our customers who have registered on the CARM client portal. As I testified, for UPS specifically, that's 20%. These are typically small importers. They import infrequently, but they are active importers that have imported with UPS over the last 12 months.

I stand by the fact that my concern is predicated on the fact that we have a low adoption rate by our customer base, and obviously I'm invested in ensuring that our customers aren't negatively impacted, not only upon implementation, but also after the transitionary measures have elapsed. We do appreciate the transitionary measures, but those will be in effect for only 180 days and 12 months, respectively. That's my concern.

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

Thank you, Ms. Bilodeau.

Ms. Campbell, you sent us a letter in which you requested, on behalf of your association, that a third party oversee things going forward. Could you elaborate on that idea?

[Kim Campbell]

We really feel that this is imperative as we move forward. We have learned that even when we got a delay, nothing changed. We also can see, from just hearing a little of what was sent to the committee through a letter from Mr. Gallivan, that it's still become a he-said-she-said scenario. We really need somebody who can come to the table and, like we discussed, provide a framework for successful implementation. For us, even if we got the delay that we obviously have been talking about, we still need this entity or person to get us together at the table and agree on a framework so that we can all move forward into a successful implementation.

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

We talked about it last time. I believe you said—unless it was another colleague with concerns similar to yours—that having a specific date for the system’s launch would be somewhat difficult. It could be purposeless, as we saw in April, when the postponement was announced. Indeed, the extension was not used well and the project stayed at square one. Giving a few more months is all well and good, but if we know there is a wall, it’s necessary to avoid hitting it. That is why, in your opinion, the decision regarding the system’s launch should be handed over to a third party.

[Kim Campbell]

Yes. I would say that we're maybe a little past step one, because we've talked a little about having moved further ahead on the certification pieces, which is great. The challenge, still, is that a lot of those software guys have just gotten their products developed. There are quite a few people who can testify that they have an integrated solution. In other words, they're creating their own solution. Again, all the testing, the interfacing and the importing of clients are behind the eight ball, because they can't get things implemented. It's all those other reasons. I would say we're further along, but still, we're not where we would like to be, by far.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry. There are two seconds remaining.

Mr. Cannings, go ahead, please.

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

Thank you for coming back before us today.

There's a lot to try to unpack here.

I'd like to start with Ms. Bilodeau. You were talking about the infrequent clients, the smaller clients that are regularly importing material but are not doing it very often. Maybe they're not as invested in getting the training, or they're not just getting the training but also actually getting registered. Can you talk about how they would be negatively impacted? If in a couple of months from now they want to import something, and if they still haven't done that piece, what's the process like for them? I understand this is a back-end thing. They can get their product into Canada. I assume it's the calculation of the tariffs and the fees after that. Can you just describe what the process would be for them if they're trying to do everything at once?

[Tammy Bilodeau]

I'll start by recapping the transitionary measures that have been put in place, which, as we've said, we're certainly appreciative of.

CARM requires all commercial importers to register in the CARM client portal. They have to have their own business number in order to do so; they need to post a security bond or a cash deposit in order to import goods and have them released without paying at the border, and they have to delegate authority to their customs broker.

During the transitionary period of 180 days, the CBSA has waived the requirement for them to have the bond or the cash deposit, but after 180 days, without that cash deposit or security bond on file with the CBSA, they would have to pay at the time of importation. That's the time the shipment reaches the border. They'll no longer be able to obtain the release of their goods otherwise.

With respect to the business number, it's similar, but that transition period is for one year. It allows the customs broker to use our business number in order to facilitate the release and the accounting of goods, so that we can ensure there aren't any customs penalties as a result of late filing.

Those requirements will become problematic, in my opinion, for those small businesses that don't want to tie up cash in posting the bond and can no longer use their broker's bond.

We see several hundreds of customers, maybe thousands, across the industry—and Ms. Jalbert can probably attest to this from an express carrier perspective—that arrive at the border without a customs broker at the time of import. Currently, we facilitate that clearance process for them, either on their business number or our business number, and definitely on our bond, and we ensure that the duties and taxes are paid to the CBSA. We take the financial risk on ourselves to bill them after the fact.

Those are all of the things that will change after the transitionary measures, which we've raised concerns about. It's not about the implementation of CARM as an accounting portal per se, but as a requirement to register. The express carriers feel that if we could decouple the requirement for businesses to register and make it an opt-in program, we could comply with the accounting requirements—the back-end duty and tax facilitation—as an industry, which would make for a much more simplified process.

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

To be clear, your main concern is more about decoupling. It's not so much about training or things like that, but how the new system will work.

[Tammy Bilodeau]

Yes. It's about the additional complications for those small businesses that are not experts in trade compliance and the complexity that's going to add to their business, which I think is going to impede trade. They're not going to be interested in importing to Canada if it becomes too complex.

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

Quickly, if we delayed the whole thing for another six months, that wouldn't necessarily address those concerns. We have a six-month transition period anyway for—

[Tammy Bilodeau]

A delay in and of itself will not change those facts.

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

I have 44 seconds.

Is there anybody here who would like to comment on that?

[Barb Miller]

I think the important thing to establish here is there's a significant difference between having you delegate it on the portal and having an importer registered.

As has been mentioned, an importer can be registered and not delegate a service provider, which means that service provider would not know whether they were registered or not. To presume that every person who has had one clearance with a courier is a small business is not realistic. There are many importers out there that utilize a courier only for small shipments, but not the others.

Personally, I have set up most likely close to 300 importers, and every single one of them will ask for delegation from the couriers. If they don't use them, we decline that registration.

It's not realistic to believe that if they aren't on the portal, they were delegated. They have that option. The portal belongs to an importer, and they have that right. It's not realistic.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Martel, go ahead, please.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Madam Chair.

Ms. Campbell, how did the Canada Border Services Agency take into account your concerns and suggestions about launching its assessment and revenue management system, CARM?

[Kim Campbell]

I'm assuming you're referring to the last launch, because we've been attempting to launch since 2021.

Although we're talking about recent delays, we've actually had delays since 2021. Typically, the response is not, “Let's roll up our sleeves and figure it out.” It's very prescriptive, and we don't get to collaborate in a meaningful way to move us all forward.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

What is your assessment of the risks associated with launching CARM?