Evidence of meeting #97 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was deloitte.
A recording is available from Parliament.
4:45 p.m.
Executive Vice-President, Canada Border Services Agency
The amount that is currently paid is $39.7 billion. That's for the last fiscal year. Again, the OAG estimated not the dollar value, but that there was an error rate there of 20%.
4:45 p.m.
Liberal
Wilson Miao Liberal Richmond Centre, BC
Since the funding was allocated 14 years ago, I understand that there have been different phases of the product released over the years. Do you have a timeline of these major events with the funding and procurement process that happened through these 14 years? Can that be shared with the committee?
4:45 p.m.
Executive Vice-President, Canada Border Services Agency
Yes. As you pointed out, CARM 2 is the sixth release of CARM.
4:45 p.m.
Liberal
Wilson Miao Liberal Richmond Centre, BC
I understand that right now, transition measures are being provided to help businesses be ready for the CARM release on May 13, and you mentioned the extended timeline to alleviate some of the concerns we've been hearing.
What would you feel is most important for ensuring that the goods are released in a timely manner once the new CARM system is used?
4:45 p.m.
Executive Vice-President, Canada Border Services Agency
Again, the release of goods isn't managed by CARM. It's ACROSS that allows us to release the goods, so that's covered and that is not at risk.
I think delaying payment is more significant than delaying the submission of the accounting documents. After listening to representation from industry and from our internal discussion, we're feeling a bit more hawkish on a payment extension. It's nearly a billion dollars a week, and there's a time value for money there, and it's taxpayers' money. We want to provide flexibility around payment, but we're also very mindful of the time value of money and that it's taxpayers' money.
On the accounting information, again I'll use the word “weeks”. It's that additional extension of weeks to allow people to adapt their systems. That doesn't have the same consequence on taxpayers.
4:45 p.m.
Liberal
Wilson Miao Liberal Richmond Centre, BC
I understand that CBSA is also engaging a lot with industry to provide this enrolment. What are the biggest challenges you've been hearing from the business community, customs or importers regarding the implementation of CARM?
4:45 p.m.
Executive Vice-President, Canada Border Services Agency
I think we're talking about two different things. In some cases, we're going to businesses that don't have customs brokers, and we're very mindful of not interfering with the competitive landscape. However, to some extent, CARM would allow businesses to do without a customs broker. We are trying to make it user friendly.
Some of our outreach is directly to businesses that might be able to manage their own affairs once they know about and have CARM or wouldn't need to go to a broker. Our focus really has been on businesses that would benefit from the CARM system and direct outreach to them.
4:45 p.m.
Liberal
Wilson Miao Liberal Richmond Centre, BC
To add to the timeline, can you also provide how many there are in the enrolment process throughout the dates? You talk about 80% now, but how is that—
4:45 p.m.
Executive Vice-President, Canada Border Services Agency
Absolutely. Just for flavour, though, every time we go, we sign up roughly 100 small businesses with kid-glove service and we show them how to use the system. Again, the deadline to having all those businesses registered is not May 13.
4:45 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
Monsieur Savard-Tremblay, you have two and half minutes, please.
4:45 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Madam Chair.
Mr. Gallivan, thank you for agreeing to submit the documents.
As to the agency's comments and the programs in question, can you tell us roughly how many specifications there were?
4:50 p.m.
Executive Vice-President, Canada Border Services Agency
There were probably hundreds, if not thousands.
4:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Are you referring to your comments after the initial proposal?
4:50 p.m.
Executive Vice-President, Canada Border Services Agency
The contract I am referring to, which is from 2018, is 1,000 pages long.
4:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
What fun.
Earlier you said there were flaws, problems with certain modules and that you might be short of time since the middle of May is not far off.
What problems have you noted thus far?
4:50 p.m.
Executive Vice-President, Canada Border Services Agency
During the 12 weeks of trials with stakeholders, we identified five critical situations and 16 others that were less critical.
Let me give you an example of a critical situation. One day, we did not produce the table for converting U.S. dollars into Canadian dollars.
We messed up the interest calculation for that day, the official interest rate or the currency conversion rate. I forget which.
During the day, we realized that the exchange rate was off, that the table had not been properly updated. Within 24 hours, we had detected the problem and corrected it.
That kind of thing can happen with any large, complex system. I am not saying we do not have any concerns about the launch of CARM. What I am saying is that we have tested our ability to identify problems and to correct them.
4:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
How much time do I have left, Madam Chair?
4:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you.
Mr. Gallivan, have you anticipated the potential repercussions of what is not working in those modules?
4:50 p.m.
Executive Vice-President, Canada Border Services Agency
Yes, that is part of the process. When we anticipate potential repercussions, that guides our approach, which is to correct the problems first.
4:50 p.m.
Liberal
4:50 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I just want to dive a bit deeper into the numbers.
You mentioned there will be a significant lift in duties that come to the government and that this would pay the cost of developing the program over a couple of years. Then you mentioned $39.7 billion paid in duties last year with a 20% error rate.
I assume the lift comes from that error rate. Is that what you're suggesting?
4:50 p.m.
Executive Vice-President, Canada Border Services Agency
That's correct. We also see the amount of tax paid over the last three years growing from $32 billion to $39.7 billion. Some of that is inflation, some of that could just be economic growth and some of that could be pre-CARM self-correction of the amount of tax that needs to be paid. It's a significant growth in a three-year period.