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.