Another Possible CARM Delay with Concerns Raised Over CBSA Readiness

This comes only days before the planned Release 3 transition and cutoff period, where the CARM portal will be unavailable for trade chain partners.

Another CARM delay is anticipated due to concerns over the readiness of the Canada Border Services Agency (CBSA) for the third CBSA Assessment and Revenue Management (CARM) release on October 21, 2024. These CARM concerns were discussed in a meeting held on September 25, 2024. 

During the meeting, the Parliamentary Standing Committee on International Trade (CIIT) assessed how ready the CBSA is for the upcoming implementation of CARM release 3 (R3). The discussion included statements from government and industry stakeholders who questioned CBSA about unresolved issues such as training, system readiness, and contingency planning.

Moreover, the meeting involved testimonies from key trade stakeholders, including the Customs and Immigration Union (CIU), importer associations, and express carrier representatives.

A Parliamentary debate over the proposed CARM delay, scheduled for October 2, 2024, will shape the next steps in the rollout of CARM.

Insufficient training and consultation with CBSA frontline staff

The issues raised during the meeting included the inadequate training provided to CBSA officers and the fact that frontline officers were not consulted before a decision was made—similar to what happened with ArriveCAN and Phoenix.

Mark Weber, national president of the Customs and Immigration Union (CIU), which represents CBSA employees, said that the state of its members can best be described as “confused” and “worried.”

Weber confirmed that staff training consisted primarily of PowerPoint presentations and that CBSA officers need more hands-on experience with the portal and the ability to test or use the system.

Moreover, Weber stated that CBSA employees’ interface differs from the importers’ interface, which leaves them ill-equipped and unable to do what they’re supposed to do.

The CIU expressed concerns that the CBSA staff's current level of preparedness could hold back the R3 rollout. It also suggested a CARM delay until training gaps and industry concerns are fully addressed.

Members of Parliament question the readiness of CBSA

MP Tony Baldinelli raised a few other concerns, saying, “On April 8, 2024, a written brief signed by 22 trade chain partners was submitted to the committee. It highlighted concerns about inadequate certification, accuracy, single source of truth, no transition plan, no final policy, or regulatory detail in customs self-assessment.”

He then questioned whether CBSA had addressed these concerns.

In response, Kim Campbell, a CBSA Revenue Management Advisory Board (ARMAB) member, stated that all of these concerns remain, as CBSA has “not consulted with trade chain partners since March 27, 2024.” 

Baldinelli also mentioned concerns from CBSA frontline officers that include “lack of consultation, lack of training, health and safety, and design flaws.” He added that there were apprehensions about CARM not being designed with CBSA in mind.  

MPs Richard Martel, Wilson Miao, and Simon-Pierre Savard-Tremblay also questioned CBSA's confidence in implementing CARM as scheduled.

Industry concerns over consultation and contingency planning

Other industry stakeholders, including IECanada, UPS, and FedEx, communicated their frustrations about the lack of progress since May 2024. They reiterated that little consultation has been conducted, and contingency planning remains unclear.

These concerns were amplified by the lack of visibility on how various issues would be addressed as the implementation date approached.

IECanada suggested that the project be paused and an independent third party be brought in to audit the situation and assess the progress made.

On a separate note, express carrier representatives voiced their concern about the readiness of Canadian importers. Only 20% of UPS customers are currently registered on the CARM Client Portal (CCP), while 55% of FedEx’s Canadian importers have registered their businesses. 

FedEx also expressed that its customers were finding it challenging to use the portal.

CBSA’s response to the raised concerns

CBSA provided updates on their progress during the meeting, including the certification of software service providers and the ongoing internal use of the CARM portal by CBSA employees.

However, they sidestepped questions about external stakeholder feedback since May. Instead, they attributed calculation errors to the misapplication of trade agreement tariff treatments and GST rules by importers and customs brokers.

Ted Gallivan, Executive Vice President of the CBSA, revealed that they had identified $200 million in GST owed due to incorrect application of GST regulations.

Gallivan also claimed that its employees were ready for CARM. “8,000 of our own employees are now equipped with access to CARM, and so I think we’ve largely derisked it as much as we can ahead of the October 21^st launch,” he said.

Regarding service standards, the CBSA confirmed that it could meet a 4-hour response time for help desk inquiries 80% of the time. 

However, UPS countered this claim, noting that its experience was not aligned with CBSA’s statement and that it had experienced several concerns that went on for days without a response.

According to UPS, this results in additional costs for the industry, businesses, and importers who invest more time getting onboarded and resolving discrepancies.

Motion to delay CARM implementation

At the end of the meeting, Baldinelli introduced a motion for a CARM delay until April 2025 or until specific conditions related to CBSA training and industry readiness are met.

The Bloc MP proposed some amendments, but the precise language of the motion will be debated on October 2, 2024.

As part of this process, members of the CIIT have requested that the Canadian Society of Customs Brokers (CSCB) and other industry representatives appear as witnesses to provide additional insights.

Please contact one of our trade professionals for further updates on the CIIT meeting and the potential implications for your business should a CARM delay occur.