Question Period Note: The CBSA Assessment and Revenue Management (CARM)

The cost of the CBSA Assessment and Revenue Management (CARM) as well as it’s delayed rollout has been mentioned in the news and the House of Commons.

• The CBSA Assessment and Revenue Management (CARM) will replace a 36-year old system used for assessing $40 billion in duties and taxes annually with one that is digital, modern and more accurate.

• The CBSA will use CARM to identify errors and discrepancies in duties and tax submissions. This will respond directly to concerns raised by the Auditor General of Canada, who had estimated that as many as 20% of goods coming into Canada were misclassified, and may have resulted in a lesser amount of duty paid.

If pressed:

• The media has reported that issues were discovered with CARM during testing. As a new IT system that will process over a million requests a year, we are going to test it and there are no doubt going to be some issues. That is the point of testing. All critical issues identified during testing have been resolved.

The CARM project is a multi-year initiative to modernize the imposition and levying of duties and taxes on goods imported into Canada. CARM is expected to result in improved compliance with trade rules, reduce lost Government of Canada revenue, and simplify the import process for trade chain partners.

On May 13, 2024, the sixth major release of CARM was implemented for internal use at the CBSA. This release has been through extensive testing, including over 7,200 test scripts and two rounds of the CARM Experience Simulation. In October 2024 this release will be made available externally at which point CARM will become the system of record for the imposition and levying of duties and taxes on goods imported into Canada. At this time, the CBSA will also be introducing:
• Changes to the Release Prior to Payment Program;
• Electronic commercial accounting declarations that will automatically calculate the duties and taxes owed;
• Harmonized billing cycles; and,
• The ability to enroll in the CBSA’s various commercial programs via the CARM Client Portal.

Legislative and regulatory amendments necessary to support the May CARM release have already been published. Transitional measures are in place to support trade chain partners as they adjust to CARM and, specifically, changes to the Release Prior to Payment Program and the usage by importers of their broker’s business number. These measures respond to concerns raised by trade chain partners regarding their preparedness and the potential impacts of the release on the flow of goods across the border.

Development funding for the project was first established in 2010-2011. As of December 31, 2023, $438.4 million has been spent to develop CARM and $118.4 million (inclusive of HST) has been spent to maintain the first five major releases of the solution. Since February 2018, Deloitte has been engaged to design, develop, implement, and provide ongoing infrastructure and application management support services for the CARM solution. As of December 31, 2023, Deloitte has received $182.2 to develop CARM and $44.2 million for maintenance work on the solution (excluding HST).

Both the Standing Committee on International Trade (CIIT), and the Standing Committee on Government Operations and Estimates (OGGO) have adopted motions for the production of approximately 30,000 pages of CARM material from the CBSA. Initial packages of material were submitted to OGGO on April 5, 2024 and to CIIT on April 4 and 10, 2024. All outstanding material has been collected and is in the process of being translated.

On April 9, 2024, the CIIT unanimously passed a motion (one member abstained) recommending that the House of Commons ask the government to suspend the May 13, 2024 CARM release until the Committee has tabled its final report. The interim report on CARM from the CIIT was tabled in the House of Commons on April 29, 2024. A Government Response to the interim report is currently underway.

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