Overview: Standing Committee on International Trade (CIIT)—Study on the CBSA's Assessment and Revenue Management Project (CARM) (September 25, 2024)

Has the Government agreed to all of the Standing Committee on International Trade's recommendations regarding CARM?
The Government has agreed to recommendations two, four, and five, and has partially agreed to recommendations one and three as detailed in the Government Response.

Has the Government responded to all of the Standing Committee on International Trade's requests for documentation?
The Government continues to work on providing documentation in response to the Committee's production orders. The total page count of all documents collected to respond to production orders from the Standing Committee on International Trade and the Standing Committee on Government Operations and Estimates is approximately 37,000.

To date, three disclosure packages have been provided to the Standing Committee on International Trade. These packages were provided on April 11, 2024, April 16, 2024 and April 18, 2024. Further materials are in translation and will be provided to the Committee as they become available. Many of these materials are technical in nature and include screenshots and complex diagrams that are particularly time-intensive to translate.

What is CARM?
CARM is a multi-year project to replace the CBSA's over 35-year old legacy system used for the assessment or levying of duties and taxes on importations to Canada. Nine additional legacy systems currently in use by the Agency will be sunsetted when the October 21, 2024, release is implemented. CARM will be used to assess $40 billion per year in duties and taxes.

Why is CARM necessary?
These changes are being introduced to help improve compliance with trade rules, reduce lost revenue, and simplify the import process.

The necessity of CARM has been underscored by successive audits undertaken by the Office of the Auditor General which found deficiencies in the CBSA's ability to accurately assess all customs duties, major inefficiencies in Agency revenue systems, and highlighted the numerous disadvantages of maintaining aging systems on old and outdated infrastructure.

Who is the CBSA working with to develop and implement CARM?
Deloitte has been contracted to design, develop, implement, and provide ongoing infrastructure and application management services for CARM.

Key federal partners include the Canada Revenue Agency (CRA), Public Services and Procurement Canada (PSPC) – which has provided procurement support for CARM and serves as the contracting authority – and the Treasury Board of Canada Secretariat, which has facilitated oversight of the project.

What benefits will CARM provide?
CARM will provide a number of immediate and ongoing benefits for the Government of Canada and Canadian businesses:

• Increased efficiency through the elimination of paper-based and manual processes – specifically with respect to billing, registration, enrollment, and re-assessment
• Increased Government of Canada revenues through the facilitation of importer compliance with better and more accessible tools that will assist importers to submit declarations that are true, accurate, and complete
• Increased transparency through a modern system that will provide a more comprehensive view of importer activities and history
• Increased functionality for importers through the ability to enroll in commercial programs, submit accounting documents and upload supporting documents, and receive notifications through their CARM Client Portal account
• Increased reporting functionality through a centralized data reporting system and real-time monitoring capabilities, allowing for recognition of patterns and trends

Will the implementation of CARM for trade chain partners in October 2024 have an effect on border wait times?
The system used in the release of goods – ACROSS – will not be changing with the implementation of CARM and will continue to operate. The October 21, 2024, release of CARM, which is an accounting system, has been rigorously tested with over 7,900 test cases being executed over the course of multiple testing cycles. This has included testing for integration with other systems, penetration testing (simulating a cyberattack), and simulated user loads.

Moreover, the CBSA has implemented, and continues to implement a range of measures to ensure that the implementation of CARM for trade chain partners does not impact border processing. These include the launch of the CARM Experience Simulation, system outage contingency planning, increased staffing and resource availability, and the introduction of transitional measures to support the continued movement of legitimate goods across the border as trade chain partners adjust to CARM. Additionally, CARM was launched for internal use in May 2024. Through this launch, the CBSA has been able to validate that the system is working as intended.

As of September 2024, how many importers have registered in the CARM Client Portal?
As of September 23, 2024, over 93,000 importers have registered to CARM through the creation of a CARM Client Portal account. This includes approximately 95% of the top 3,000 importers by both volume and value, 97% of brokers, and 60% of the top small and micro importers.

The CBSA has launched a number of initiatives aimed at supporting the registration of trade chain partners in the CARM Client Portal. These have included CARM in person registration days, targeted webinars, and mail-outs from both the CBSA and partner intermediaries such as the CRA and Innovation, Science and Economic Development Canada. Since December 2023, over forty webinars focused on guiding small and medium sized importers through the registration process have been delivered, attracting over 10,000 participants. This is in addition to the over twenty-five in-person registration days that the CBSA has held across the country during which over 360 smaller and less frequent importers have been engaged. Public facing terminals with access to the CARM Client Portal have also been set up to provide an opportunity for small businesses that transact directly with the CBSA to register in-person in the portal at select CBSA commercial offices across the country. Following October 2024, increased resourcing and service levels will be available, including at ports of entry, to help facilitate trade chain partner onboarding to the CARM Client Portal.

How many small importers have a CARM Client Portal account?
Of the over 93,000 importers with a CARM Client Portal account as of September 23, 2024, about 97% are small or medium sized importers. The CBSA has undertaken a number of initiatives designed to support importers, but in particular smaller and less frequent importers, as they transition to the CARM system. These include:

• Hosting over twenty-five in-person registration days across Canada where importers could receive hands-on support as they registered in the CARM Client Portal. Over 360 smaller and less frequent importers have been engaged through this in-person outreach and additional sessions have been scheduled
• Delivering over forty webinars since December 2023 focused on guiding small and medium sized importers through the registration process, attracting over 10,000 participants. Two of these webinars were delivered in partnership with the Canadian Federation of Independent Business
• The installation of terminals with access to the CARM Client Portal at select commercial sites across Canada where importers are able to register in-person and receive assistance from CBSA officials
• Direct mail-outs to the CBSA's top "C" type importers (these are importers present in person to obtain release and account for goods), the majority of which are small or medium sized businesses

Will all importers of commercial goods require a CARM Client Portal account?
Yes, following the launch of CARM for trade chain partners in October 2024, all importers, even those who use a customs broker or other third party service provider, will be required to register in the CARM Client Portal. During the broker business number transition period, brokers may use their own business number under certain scenarios to submit accounting for goods released should a client not yet have registered in the CARM Client Portal. Further guidance on the broker business number transition period has been published via Customs Notice on the CBSA's website.

Has the CBSA consulted with industry on the design and implementation of CARM?
The CBSA has maintained a valued and productive relationship with trade chain partners for decades and has consulted broadly with trade chain partners on CARM including: commercial importers; customs brokers; exporters; carriers; couriers; freight forwarders; duty free shop operators; customs bonded warehouse operators; sufferance warehouse operators; surety companies; and, financial institutions. Engagement has also taken place with representatives from a variety of associations, including: the Canadian Federation of Independent Business; Importer and Exporter Canada; the Canadian Vehicle Manufacturers' Association; and, the Canadian Society of Customs Brokers. Between 2018 and 2022, the CBSA conducted 35 consultation sessions, 63 technical working group sessions and 169 engagement events with trade chain partners.

Trade chain partners have been kept up to date on key features of CARM through frequent webinars, regular updates to the CBSA website, direct outreach, and participation in the CBSA's Trade Chain Partner Working Group. The CBSA also launched the CARM Experience Simulation, allowing selected partners to gain experience within the CARM environment. Feedback has been used to improve CARM functionalities, shape project planning and implementation date decision making, and inform the picture for future CARM releases and functionalities.

Consultations and information sessions with trade chain partners on future CARM enhancements will continue once CARM Release 3 has been implemented and adopted. How the CBSA and trade chain partners work together matters and the CBSA is committed to a forum that allows for collaboration, honesty, and mutual respect and that has no tolerance for bullying. All voices are equally as important.

How has the internal launch of CARM gone?
CARM was successfully launched internally at the CBSA as a compliance risking and verification tool on May 13, 2024. The new data analytics and risking functions available in CARM have allowed the CBSA to more precisely and efficiently identify companies that may not be accurately declaring their goods for accounting, impacting the amount of the taxes and duties they owe, as well as isolate trends and issues that are not readily apparent from a manual review of data.

Consistent with the CBSA culpability framework's focus on assuring voluntary compliance, the launch of CARM is enabling the Agency to communicate suspected compliance errors to the importing community so that corrective actions can be taken and revenue owing paid. This feedback from the regulator can, over time, help importers and brokers to strengthen their up front controls and thus avoid downstream costs of non-compliance in the future. Examples of potential non-compliance identified to-date include:

• Importers appear to be using GST exemption codes incorrectly, which for some importers results in overpayment and for others, underpayment. For example, GST exemption codes are being incorrectly applied to ineligible goods such as motor vehicles; clothing; paint; and trees
• Shipments are being declared as being shipped from countries qualifying for the least developed country tariff treatment when they are not
• Goods such as jewelry appear to be undervalued

While the value of many of individual errors identified to-date is often low, because of the volume of errors, the total potential revenue impact may be quite high. After examining 31 months of transactions between 2022 to 2024, the CBSA estimates CARM could prevent importers from incorrectly claiming as much as $216 million annually in GST exemptions. Within three years, CARM is also expected to help the CBSA improve its return on investment on trade compliance activities by 25%, rising from 15:1 to 19:1.

What has the CBSA done since the internal launch of CARM in May 2024?
Since the successful internal launch of CARM, the CBSA has been leveraging CARM as a compliance risking and verification tool. This has allowed the Agency to more precisely and efficiently identify companies that may not be accurately declaring their goods for accounting, impacting the amount of the taxes and duties they owe, as well as isolating trends and issues that are not readily apparent from a manual review of data.

Consistent with what was observed during the CARM Experience Simulation, CARM supports the identification and correction of errors that previously would not have been flagged under legacy systems and processes. Since the internal launch, additional enhancements to the system have also been introduced and the soundness of the system has been further validated via additional rounds of performance and regression testing during which over 300 additional test cases were run.

In addition to confirming the performance of CARM and enhancing its functioning, the CBSA has worked to strengthen its guidance materials for trade chain partners. A number of Customs Notices and policy documents outlining CARM related processes have been published since May 2024 and additional materials will continue to be published in the time leading up to October 21, 2024. During this time, the CBSA has also adjusted its engagement strategy to focus on working directly with specific stakeholders in need of its help such as smaller and less frequent importers, and those working on software certification. Increases in registration and certification numbers since May 2024 show that this approach is working.

Is CARM being released in a "big bang" approach on October 21, 2024?
CARM is not being released in a "big bang" approach. CARM is a multi-phased project which is being completed over two phases and multiple releases. The first phase, which consisted of the development and release of the Accounts Receivable Ledger, was implemented in 2016. The Accounts Receivable Ledger enabled the CBSA's transition away from multiple non-integrated accounting systems that were heavily reliant upon manual data manipulation. The second phase consists of four principle releases: Release 0, Release 1, Release 2, and Release 3:

• Release 0 was launched in January 2021, setting the foundation for future releases by migrating the Accounts Receivable Ledger to the cloud
• Release 1 was launched in May 2021, introducing the CARM Client Portal and enabling self service account access for importers, brokers, and trade consultants
• Release 2 was successfully launched internally in May 2024, allowing the CBSA to begin leveraging CARM as a compliance risking and verification tool

In April 2024, the CBSA announced that while Release 2 would launch as planned internally on May 13, 2024, the implementation of CARM as a system of record for trade chain partners would be deferred to October 2024. The decision to delay the launch of CARM for trade chain partners to October 2024, now known as Release 3, was made knowing the impact that a possible labour disruption would have on the capacity of CBSA teams to support trade chain partners during the transition to CARM as a system of record.

It is important to note that CARM will not be finished with Release 3. Rather, the CBSA's expectation is that CARM will continue to evolve and be enhanced over time. As business and strategic priorities changes, so will CARM. Unlike under "one and done" delivery models, new capabilities will continue to be rolled out. Through the CARM Steady State team, the CBSA will work to continue investing in improvements to CARM so that it remains evergreen and in alignment with the CBSA and Government of Canada's strategic needs going forward.

What is cutover?
Cutover is the period of time during which the CBSA will migrate existing legacy systems and functionalities to the CARM system and functionalities. This is scheduled to take place between October 4, 2024 and October 21, 2024. During this time, the CARM Client Portal and some legacy systems will be unavailable.

Guidance advising trade chain partners on processes to be followed during the cutover period was made available in August 2024. Cutover measures will increase the available time for trade chain partners to account, but will not represent a significant change to existing accounting processes. Mitigating measures specific to the cutover period have been designed to reduce impacts on industry in terms of accounting timeframes, payments, penalties and interests.

What measures will be in place to support trade chain partners in the transition to CARM as a system of record?
The CBSA will be implementing a range of measures to support the trade chain community in the transition to CARM as the system used for the assessment or levying of duties and taxes at the border. Updated guidance advising trade chain partners on these transition measures was made available in August 2024. Transition measures include:

• Importers with a CARM Client Portal account or a history of importing commercial goods into Canada within the past four years will be granted a 180 day period within which goods may still be released prior to payment of duties and taxes without requiring the importer to give a security; new importers can also benefit from the remainder of the 180 day transition period, upon enrollment in the CARM Client Portal following go-live
• A twelve-month broker business number transition period that will support the use of broker business numbers, in certain scenarios, to submit accounting on behalf of their importer clients who have not yet registered in the CARM Client Portal
• The installation of terminals with access to the CARM Client Portal at CBSA Commercial sites across the country
• Increased support from the service provider in anticipation of higher than normal service request volumes
• Reallocating existing staff, as needed, to support the implementation of CARM, for example, to assist the CARM Client Support Helpdesk

In addition, trade chain partners will play a significant role in helping to bring about a smooth transition to Release. Through a variety of forums including the CBSA's website, direct outreach, and regular webinars, the CBSA has been regularly engaging trade chain partners with the aim of raising their awareness of, and preparedness for, October 2024.

What is the business continuity plan if CARM suffers a delay at launch?
CARM successfully launched internally in May 2024 and has been through numerous rounds of exercises in preparation of the cutover from legacy systems to CARM. In the unlikely event that CARM is unable to launch for trade chain partners on October 21, 2024, the cutover period and the operational procedures that accompany it would be extended. Further guidance on these cutover procedures has been published via Customs Notice on the CBSA's website.

Any issues that may arise upon the launch of CARM in October will be addressed expeditiously, with resources available 24/7 to support cutover and launch activities. More specifically, the CBSA's contract with Deloitte includes technical support with established prescribed response and resolution times, with the most critical issues being addressed the most quickly. Under the contract that the Government negotiated, fixing defects will be at no additional cost to taxpayers.

Will there be a transition period from the legacy systems to CARM?
The CBSA has introduced several measures to facilitate a seamless transition from existing business processes to CARM. CARM will become the system for the assessment or levying of duties and taxes on October 21, 2024.

What is the process to create a CARM Client Portal account and how long does it take?
Onboarding can be completed in as little as ten minutes and can be done online, or in person at a terminal with access to the CARM Client Portal. In order to register in the CARM Client Portal, trade chain partners will require a previous B3 – Customs Coding Form, a Statement of Account, past payment information, and information about the legal entity (registered name and address). Once the required information has been provided, the portal will prompt users with a series of questions aimed at ensuring that they are authorized to create a business account within the portal. Trade chain partners seeking support in creating a CARM Client Portal account can consult guidance documents available on the CBSA's website, or contact the CARM Client Support Helpdesk via an online contact form or toll-free phone number.

How will late accounting penalties be assessed during the transition from the legacy system to CARM?
As part of the cutover from the existing legacy systems to CARM, legacy systems will be unavailable over the course of several days in October 2024. Discretion will be used to ensure that no late accounting penalties are issued respecting transactions negatively affected by the unavailability of legacy systems.

Is CARM being delivered on schedule?
Release 2 was successfully launched internally in May 2024 and CARM remains on track to be delivered to trade chain partners on its scheduled launch date on October 21, 2024. The CARM schedule has changed in response to the need to address the complexity and magnitude of the changes being implemented across CARM's multiple releases, the anticipated impacts of a possible labour disruption, as well as the CBSA's desire to make sure that it gets CARM right and remains responsive to the concerns of partners and stakeholders, including those within the trade chain community.

Going forward, the CBSA is planning on two CARM releases each year, one in the spring (May timeframe) and the other in the fall (October timeframe). This will allow the CBSA to continually enhance and improve CARM functionality for all users.

Why did the implementation date for trade chain partners change from May 13, 2024 to October 21, 2024?
The CBSA made the decision to move the implementation date for trade chain partners to October 21, 2024 in view of the impact that a potential labour disruption would have had on the CBSA's ability to support trade chain partners through the transition to CARM. The participation of CBSA employees is critical to a successful implementation of CARM; by rescheduling its launch, the CBSA has set industry partners up for success.

How does the CARM project compare to similar projects internationally?
While exact comparisons are difficult to make, a sampling of similar projects suggests that budgets and timeframes for comparable projects internationally are on a similar scale.

Country/Jurisdiction	Cost	Development time
Canada	$438.4 million spent on development as of December 31, 2023	14 years
United States	USD $4.8 billion (estimated) (around CAD $6.4 billion)	17 years to full deployment (2001 to 2018)
Mexico	Approximately CAD $140 million (VUCEM 1 and 2)	2012 to 2018 (VUCEM 1 and 2). Ongoing improvements and new functionalities
European Union	2014 to 2020: €522.9 million (around CAD $804 million) 2021 to 2027: €950 million (around CAD $1.4 billion)	2003 to 2025 (estimated)
United Kingdom	£180 million to build a UK Single Trade Window (around CAD $304 million) £838 million to build the Customs Declaration Service (around CAD $1.4 billion)	Since 2018
Australia	AUD $879 million (estimated) (around CAD $794 million)	2001 to 2015 (continuing improvements)

How was Deloitte selected to work on CARM?
In partnership with PSPC, the CBSA ran an open procurement process to identify a business transformation and technology firm for this project. As per Government of Canada procurement best practices, the CBSA and PSPC consulted extensively with companies interested in the CARM Phase 2 contract. A letter of interest was posted to initiate engagement to which 13 suppliers responded, 11 of which went on to participate in one-on-one meetings with the CBSA to learn more about the planned requirements for the system. Four firms proceeded to submit responses at the conclusion of the Invitation to Qualify phase.

Following these engagements, a competitive Request for Proposal process was initiated. At the conclusion of the Request for Proposal process, two bidders submitted bids. On February 7, 2018, the CBSA entered into a contractual arrangement with Deloitte to design, develop, implement, and provide ongoing infrastructure and application management support services for the CARM Phase 2 solution.

What systems are currently in place to support the assessment of duties and taxes at the border?
CARM will be replacing a number of systems currently in place to support the assessment of duties and taxes at the border. The principal system that CARM will be replacing, the Customs Commercial System, is over 35 years old, difficult to modify, expensive to maintain, and at significant risk of failure. Other systems that will be decommissioned and retired following the October launch include the Tariff Publishing and History System and the Administrative Monetary Penalty System.

Where is CARM data stored and is it managed in a secure way?
Consistent with Treasury Board of Canada policies, CARM data is stored in a secure cloud environment hosted by a Shared Services Canada approved cloud services provider. Measures are in place to ensure the protection of CARM data include the use of encryption on all CARM data stored in the cloud, access controls within the solution, the use of multi-factor authentication when logging in to the CARM Client Portal, the deactivation of accounts that have been inactive for over 180 days, and the requirement for importers to delegate authority to their brokers or other third party service providers. Moreover, each CARM release is required to complete a rigorous, three part security assessment process prior to receiving its Authority to Operate.

Privacy Impact Assessments ensure that all privacy issues have been resolved or mitigated. Summaries of the Privacy Impact Assessments completed for CARM are publicly available on the CBSA's website.

How has CARM been tested?
All CARM releases have been thoroughly tested. The release scheduled to be launched in October 2024, has successfully completed multiple testing cycles, including:

• Systems integration testing, during which over 850 test cases were executed
• Deep cycle testing, which tested the integrations between CARM, existing CBSA systems, and trade chain partner systems
• User acceptance testing, where business users validated that the solution was fit for purpose and during which over 3,400 test cases were executed
• Two cycles of the CARM Experience Simulation

Testers for CARM have been pulled from across the CBSA, Government of Canada, and industry, and included the CRA, Descartes, Livingston, United Parcel Service, and General Motors. Furthermore, in addition to having been through multiple rounds of testing, CARM successfully launched internally at the CBSA as a compliance and validation tool in May 2024.

What is the CARM Experience Simulation?
Initiated by the CBSA and launched in early 2023, the CARM Experience Simulation is designed to provide end users with hands-on experience with the CARM solution. Within the CARM Experience Simulation, users have been able to run business scenarios, trial training materials and standard operating procedures, and improve their readiness for CARM. Feedback gathered from participants has proven valuable in informing the CBSA's understanding of readiness for CARM, as well as in identifying potential future functionalities for the CARM solution. Notably, during the second round of the CARM Experience Simulation, less than 3% of recorded incidents were classified as critical or high priority.

Will the implementation of Release 3 have an effect on the use of Commercial Cash Entry Processing System terminals?
The Agency's Commercial Cash Entry Processing System terminals are being replaced with CARM Client Portal Terminals. These terminals have access to the CARM Client Portal and will provide trade chain partners with a means to register onsite in the CARM Client Portal in the event that they have not done so prior to arriving at the border, as well as prepare their electronic commercial accounting declarations.

If there is a network or service outage that results in the temporary unavailability of CARM, how will this affect commercial importers and border wait times?
The CBSA's System Outage Contingency Plan is a publicly available document that sets out the procedures for the release of goods during a CBSA system outage including:

• When and how trade chain partners are notified of an outage
• The circumstances under which accounting time limits will be extended
• Requirements for paper contingency forms
• The establishment of buffer times following system outages to facilitate a smooth return to regular operations

Processes and procedures established under the System Outage Contingency Plan are designed to minimize the impact of system outages on the flow of legitimate goods across the border. An updated version of the System Outage Contingency Plan which includes information on border processes in the event of a CARM outage is available on the CBSA's website.

What happens if duties and taxes imposed on imported goods are calculated incorrectly by CARM? What appeal or recourse options are available?
Trade chain partners who believe that duties and taxes have been incorrectly calculated by CARM will be able to submit a ticket via the CARM Client Support Helpdesk. Each ticket will be reviewed and should there be an error with the calculation, a system correction will be issued to correct the error. In some instances, a trade chain partner may disagree with the CBSA's determination that no calculation error has been made. In those instances, the applicable recourse available to the trade chain partner will be dependant on the facts.

What is "Importer of Record" and why has the CBSA chosen to implement this change?
In 2020, the Canadian International Trade Tribunal released a decision that affected the CBSA's ability to assess revenue on e-commerce in situations where an intermediary such as a customs broker had used their business number to account for the goods. This decision created uncertainty and ambiguity as to who holds liability for duties and taxes owing.

Accordingly, in June 2022, amendments to section 17 of the Customs Act received Royal Assent. These amendments helped to clarify who is liable for the payment of duties and taxes. Once the amendments come into force, the person identified as the importer on accounting documents (in other words, the "importer of record") will be liable for any owing duties and taxes. These changes are entirely separate from legislative and regulatory changes related to CARM.

Why do all commercial importers require a business number?
The requirement for Canadian businesses to obtain a Business Number is a requirement of the Government of Canada Business Number Adoption Strategy.

The requirement for importers to have an importer business number is not new. This requirement originates early in the commercial continuum with the release of commercial goods (commercial stream). This currently is, and will continue to be, prescribed information necessary for the release of goods. The CBSA has historically provided certain exceptions to this requirement and will continue to carry forward certain exceptions following October 2024.

Why are commercial importers no longer allowed to use the financial surety of their customs broker to obtain the release of goods they import prior to the payment of duties and taxes?
The practice of using broker bonds for importer security undermines the ability to appropriately mitigate risks to Crown revenue. Under the current approach, if the CBSA called on a broker's bond, each importer using that broker's bond – even those importers without an amount owing or a debt due – would lose that bond and not be able to obtain the release of goods prior to payment until a new bond is posted. This would adversely affect the flow of goods crossing the border. Under the importer liability model which is being introduced in October 2024, the CBSA will be able to call on an importer's security without preventing other importers from obtaining release prior to payment for goods they import.

If an importer has a CARM Client Portal account do they need a customs broker?
Customs brokers provide a wide range of professional services and expertise to their clients. The decision as whether or not to engage the services of a customs broker or other third party service provider rests with each importer. When an importer has chosen to work with a customs broker or other third party service provider, the CARM Client Portal allows importers to delegate authority for their customs broker or third party service provider to transact on their behalf to the extent permitted by law. The introduction of CARM will not prevent importers from continuing to work with a customs broker to provide information to the CBSA via Electronic Data Interchange and benefit from Release on Minimum Documentation.

If Canadian importers receives an input tax credit, why is GST included in the calculation of the amount of security?
While the input tax credit may be available to some businesses in Canada, the credit is not granted automatically. Importers wishing to benefit from the input tax credit are still responsible for payment of GST at the time of import. Should an importer meet the requirements for the input tax credit, a claim may be made at time of tax filing with the CRA.

Including GST in the amount of security required to obtain the release prior to payment of duties for imported goods helps to protect Crown revenue. Duties and taxes imposed on imported goods are payable at the border when such amounts are owed. When goods are released prior to the payment of duties and taxes, the duty and tax amounts payable must be secured by way of a financial security. This is particularly important for the protection of Crown revenue in scenarios when an importer defaults at a later time on payments of duties or taxes that were not paid at the time of import.

What are the minimum and maximum amounts for security for importers participating in the Release Prior to Payment Program?
The minimum amount for security under the Release Prior to Payment Program in October 2024 has been set at $5,000 while the maximum has been set at $10 million. The decision to set the minimum and maximum amounts at these levels follows the CBSA's consideration of a number of different amounts.

Alternatively, security deposits will also be accepted for importers participating in the Release Prior to Payment Program. This option is designed to support small and infrequent importer participation in the program.

Will CARM treat resident and non-resident importers in the same way?
Resident and non-resident importers are treated the same under the changes being introduced in October 2024. The CBSA recognizes that some non-resident importers may experience difficulties in both registering for an account in the CARM Client Portal, as well as making payments. Accordingly, the CBSA has provided clarity around transitionary measures that will be in place to allow non-resident importers to account under a customs broker's business number until the non-resident importer has completed their registration in the CARM Client Portal. Furthermore, the CBSA has worked collaboratively with financial institutions to offer additional payment options; several alternative payment methods have been identified, including the continued usage of brokers to remit payments.

How will CARM affect the Courier Low Value Shipment Program?
The CBSA is aware of the concerns of the express carrier community that Release could present challenges to their business model and the unimpeded flow of legitimate goods across the border. Release transition planning allows for the use of a broker's business number to submit accounting documents when the importer has not yet registered on the CARM Client Portal. This, coupled with the Release Prior to Payment Transition Plan, which will allow Release Prior to Payment access for up to 180 days, will serve to mitigate any possible disturbances to the continued immediate release of goods.

What impact will CARM have on importers that benefit from the Customs Self Assessment program?
The CBSA recognizes the impacts that CARM will have on some of our largest importers, many of whom are members of our Customs Self Assessment program and who today use their own systems to account for their shipments and determine duties and taxes owing to the Crown. The CBSA has taken a number of measures to maintain many of the benefits Customs Self Assessment importers currently experience and have incorporated them, when possible within the CARM system. Within CARM, Customs Self Assessment importers will experience:

• A new Trusted Trader Commercial Accounting Declaration to account for goods that will replace the B3 form
• A new CARM Statement of Account populated by the CBSA to replace the Revenue Summary Form; providing better clarity on account information
• Online access to their accounts, transactional details (accounting, corrections, adjustments) and the Statement of Account
• Expanded accounting and payment timelines and the ability to make corrections to accounting declarations (a new benefit)
• Expedited adjustments with automated processing for most credits
• Customs Self Assessment pre-CARM adjustment procedure

Additionally, Customs Self Assessment importers will continue to benefit from:

• Expedited clearance processes at the border, supporting just-in-time delivery
• Dedicated Free and Secure Lanes at designated ports of entry
• Reduced examinations at the border
• Customs Self Assessment-only late accounting penalty application
• Dedicated Customs Self Assessment account representatives

What regulatory changes has CARM required?
As per the Canada Gazette, Part II, the Government of Canada has published amendments to nine existing regulations under the Customs Act, three existing regulations under the Customs Tariff, and introduced one new regulation to enable CARM:

• The new Financial Security (Electronic Means) Regulations is intended to facilitate a financial security regime that moves away from dependence on paper bonds and allows for security deposits and security arrangements between trade chain partners and surety providers to be confirmed and communicated to the CBSA by electronic means
• Regulatory amendments to enable electronic communication and payment are intended to allow trade chain partners to communicate with the CBSA, and make payments, by electronic means; removing the requirement to engage with a specific CBSA representative at a specific physical location
• Regulatory amendments to harmonize billing cycles are intended to provide more consistency between billing, accounting, and payment due dates for imported goods

How were the CARM regulatory changes developed and who was consulted?
On November 26, 2022, the CARM regulatory package was pre-published in the Canada Gazette, Part I for a 45 day consultation period. During the consultation period, the public had the opportunity to view and submit comments on the proposed regulations. No substantive changes were made to the pre-published regulations as a result of the comments received.

On March 13, 2024, the CARM regulatory package was published in the Canada Gazette, Part II. On May 22, 2024 the Government published an Order amending the coming into force date for CARM regulatory changes from May 13, 2024 to October 21, 2024s.

When will CARM regulations come into force?
Both the changes to existing regulations and the new financial security regulations will come into force at 3:00 am ET on October 21, 2024.

Will there be more releases of CARM?
Funds have been set aside for the maintenance and enhancement of CARM. Additional CARM releases and improvements will be implemented on an ongoing basis beyond October 2024. These releases will be aimed at improving CARM functionalities and processes for the benefit of the CBSA, Other Government Departments, and industry. This will allow CARM and the CBSA to continue adapting to emerging developments and demands within both the IT and customs environments.

The process being put in place to support the continuous improvement of CARM will support the rigorous identification, testing, and implementation of new features in accordance with best practices. So as to strike a balance between being responsive to an ever evolving environment, while also respecting the impacts that changes can have on trade chain partners, the CBSA does not plan on implementing major production releases more frequently than twice per year.

What new functionalities will new CARM releases bring?
Through comprehensive engagement with trade chain partners, feedback received from the CARM Experience Simulation, and input provided by CBSA subject matter experts, a number of future CARM functionalities have been identified. These include enhancements to improve ease of use of the CARM Client Portal, the introduction of additional features for the delegation of authority, augmented automation and data integration, and expanded reporting capabilities.

The CBSA remains committed to engaging with trade chain partners on future releases in a way that allows for collaboration, honesty, and mutual respect and that has no tolerance for bullying. Prior to any major release, the CBSA will engage with trade chain partners on potential code changes or system integration changes which will result in updates to the Electronic Commerce Client Requirements Document. Releases will be required to pass through multiple testing cycles. Where applicable, some of the testing plans – which establish the testing approach and acceptance criteria for each release – will be developed in consultations with trade chain partners.

What functions will Border Services Officers (BSOs) be performing in CARM?
In alignment with current BSO functions that are carried out using legacy system or manual process, BSOs will use CARM to:

• Create and issue Notice of Penalty Assessments /Administrative Monetary Penalties (AMPs)
• Process, monitor and close out Commercial Temporary Importation forms (formerly E29B)
• Administer bonded warehouse audits including accessing warehouse balance report
• Process payments or other cash desk functions (will vary from port to port depending on whether dedicated cashiers are assigned at the port level)

What functions will our clerical members be performing in CARM?
In alignment with current clerical functions, the following existing functions move from the legacy system or manual process into CARM.

HQ Clerical Ruling staff:

• Monitor the inbox for ruling cases referred to HQ by regional managers (functional guidance requests, high-risk decisions, and decisions to be published), triage these cases and assign to appropriate user
• May run reports as an Analysis for Office (CARM reporting feature) business user

Recourse Clerical Staff:

• Assign appeal cases to Appeals Officers for case execution similar to the current state approach executed by the Trade and Enforcement Triage Units
• Notify necessary parties on appeals
• Create the follow-up case to indicate that an Advanced Ruling is under appeal and to prevent it from being modified

Trade Regional Clerical Staff:

• Create cases, triage, data entry and uploading documents for decision or analysis requests received outside of the CARM Client Portal
• Review and render decisions on low risk Commercial Accounting Declaration (CAD) adjustment requests, which may include tasks such as requesting additional information or supporting documentation from trade chain partners (TCPs)
• Review and recommend CAD adjustment requests for higher level approval
• Perform rejects on specific requests when documentation is inadequate
• Carry out possible follow-ups on a variety of requests/CADs with TCPs
• Run reports in support of the financial oversight strategy
• Perform any other administrative duties

Commercial Regional POE Clerks:

• Payment processing and other cash desk functions (similar to current role since implementation of Accounts Receivable Ledger (ARL))
• Query/confirm submission of voluntary (V-type) entries or other CAD types as part of their existing duties related to processing overdue cargo and/or release transactions

What functions will Trade Compliance members be performing in CARM?
In alignment with current Trade Compliance member functions, the following existing functions move from legacy system or manual process into CARM.

Trade Compliance Officer:

• Review and render decisions on requests to adjust CADs that are selected for detailed review, which may include tasks such as requesting additional information or supporting documentation from TCPs
• Execute compliance intervention cases (includes Trade Advisory Notices, Directed Compliance Letters, Compliance Validation Letters, compliance verification cases), to promote and facilitate voluntary compliance with the CBSA's administered legislation and regulation, which may include tasks such as requesting additional information and conducting on-site verifications
• Perform analysis and render decisions for Advance Rulings and Voluntary Disclosure files
• Training and coaching for new employees

Senior Officer Trade Compliance with Risking Role:

• Obtain and review leads on potential non-compliance from a variety of sources
• Analyze and connect information to validate trade and revenue risks
• Create risk assessment cases to determine the validity and relative seriousness of risks and identify trends and other indicators of non-compliance
• Build more robust cases using the information and analysis gathered, and, if a referral is warranted, triage and refer leads to appropriate stakeholders for action

What are the functions to be turned on live for the October 21st for Trade Officers?
The functions described above were launched internally in May 2024, and will be available, with ability to interact with external stakeholders, when CARM goes live in October.

What functions will EOID members be performing in CARM?
EOID will leverage new electronic data collected in order to inform investigative and enforcement activities. They are not required to perform duties in CARM but will benefit from the greater level of data offered by CARM, which will assist in performing their investigative analysis. Similar to the existing process of leveraging FIRM reports and CCS, they will access CARM primarily to view information and leverage reports.

What FB or CR duties, currently being performed by CIU members, will be performed by CARM in all present and future states?
CARM does not replace the work of officers. The nature of shifting to an electronic system will mean some paper processes will now occur electronically.

For example, the B3s and B2s will no longer exist once CARM is deployed, but the function of processing refund requests will still exist.

Because of the CARM design, functions, such as processing a revenue neutral change to a customs declaration, will no longer be performed by CBSA, but they will be done by the client in a self-serve manner, using CARM.

Clerical staff will no longer need to manually data capture all C-type declarations on behalf of clients. Clients will be responsible for completing a C-type in the CARM Client Portal (CCP) themselves unless an exceptional scenario prevails. This has allowed the Agency to eliminate the hiring of external clerical staff through the Data Vendor Contract.

CARM removes the need for a port to manually track a commercial E29B. The responsibility to track and monitor will remain but this function will be more efficient through digitalization under CARM.

What functions will all CIU members FB, PA, etc. be performing in CARM?
The functions will reflect the individual's current position, but the main difference is that these functions will be performed in a digital platform.

What changes/additions/removals of job duties are forecasted with the implementation of CARM? (Please provide a detailed list).
For low risk, low value CADs, CAD Processing Agents may be delegated additional authorities for approval.

Overall, the core job functions will be similar to the current ones. The main difference moving forward is that the assessment and collection of duties will be carried out in a digital environment (in other words, CARM).

How much time will it take to perform each duty/function previously mentioned?
BSOs: BSOs performing the functions of releasing commercial goods will not change with CARM. Over 97% of commercial goods will be released in the same manner as is done today.

Initially, it is anticipated that it may take a bit longer to process C-type CADs (<than 1%) as both importers/brokers and commercial staff become more familiar with new process.

Once regional staff and commercial importers become more familiar with the process, the CARM design will reduce the amount of time needed by commercial staff to process C-types.

It is estimated that a C-type presented pre-CARM takes approximately 30 minutes to fully process whereas once clients become accustomed to the new process, this timeframe should reduce to half as the CBSA will no longer be required to manually data capture C-types in CCS.

Clerical: Same time as today for CAD reviews. CARM functionality will allow for some reports and data entry function but this is no different from to today. Some processes are being streamlined because of the consolidation of various reports into CARM and other Agency reporting tools (such as Microsoft Power BI).

What duties currently performed by a BSO will be given to a clerical member?
None.

What duties currently performed by a clerical member will be given to a BSO?
Depending on the available clerical staff at ports of entries (POEs), BSOs may, in exceptional circumstances, have to manually capture CAD C-type data on behalf of a client.

Who is inputting CCS and CADEX into CARM? (CR's, FB's?)
CARM will automatically receive the data through electronic data interchange (EDI), application program interface (API), or the web portal (CARM Client Portal). Generally speaking, there is no manual data input into CARM. Only exceptional circumstances, one of which is when a client refuses to use CCP for example, religious reasons or the importer has no access to internet, would a BSO or clerk capture a C-type on behalf of a client. Of note, C-types represent less than 1% of all releases annually.

CCS and CADEX will no longer be used by clients to submit data electronically to the CBSA.

Has CBSA considered the service standard impact of manually entering data into CARM or the impacts of any other proposed changes to job duties, redistribution or otherwise?
In the short term, trade clerical staff may be required to enter paper B2s into CARM as a CAD due to the transition to CARM from legacy processes . However, over time with the adoption of CARM, manual data entry will become minimal and applicable in exceptional cases only.

CBSA service standards have been considered and no significant impacts are anticipated.

Are there any planned workforce adjustments or impacts to current workforce related to CARM or any other technological changes CBSA is making? (CR's, FB's?)
From a CARM perspective, some regions have temporarily staffed (clerks and Senior Officers Trade Compliance) according to the anticipated needs of the transitional period of legacy to CARM, including the initial period post external CARM system launch to ensure adequate resourcing to deal with any unexpected issues that could arise, as well as providing additional external client support through the transition.

In addition, the regions have created FB-02 developmental opportunities in support of the Importer of Record Program.

There is currently no anticipated workforce adjustment. If there is a change in regarding this, the Union will be engaged.

Has the CBSA sat down with Regional Trade and Commercial employees (CR's and FB's) that will have their job duties altered or impacted by CARM? — a) If no, when is CBSA planning to have these conversations?
Yes, management (Director General, Trade and Anti-dumping Directorate) has visited every region in person to discuss CARM operational requirements the upcoming change and shared vision for the trade program.

Conversations about the change were had at these meetings and continue to be had at the local and national level.

The Regional Director Generals, Regional Directors and Managers in the regions have met with the employees through general assemblies (town halls) or smaller dedicated sessions with management and with clerks. Communications, such as messages in the Daily, intranet updates, emails, newsletters, and information sessions are leveraged to provide information as it becomes available. Many of the trade employees are collaborating in implementing CARM.

The regions have maintained an open door policy at the managers, Assistant Director or Director level to ensure preoccupations are being addressed.

As more information becomes available the trade management community is committed to sharing details.

HQ has been working closely with Regional Commercial Operations through a number of different forums for the last several years including weekly meetings with CARM Regional Leads Working Group. Other forums include meetings with Regional Executive Directors; bi-weekly meetings through the CARM Border Task Force; etc.

Additionally, 89 in-person and virtual CARM Awareness sessions to date were delivered in total to all regions and covering all programs (Trade, Commercial, Intelligence).

In-person CARM Commercial training was completed in March 2024 and presented to regionally identified CARM training facilitators across Canada. In all, over 180 regional training facilitators received this training. The CARM Border Management team and the CARM Border Task Force continue to work closely with Commercial Operations in order to support a high state of operational readiness.

What are the impacts to the BSO's access to the full array of ACROSS? (RCID and other specific screens being deleted).
BSOs' access to certain information in ACROSS will be marginally affected with the October launch of CARM. Specifically, the RCID and RCNAME functions (provides end user with client information such as address, BN15/Carrier Code, etc.) will no longer be updated. This information will continue to be available to BSOs in both the Commercial Passage and internal CARM system should there be a need to query this information.

Are businesses/importers now given 18 months timeframe right off the bat regarding E29B's? This is not currently the practice. Can you please let us know where this 18-month period is denoted?
Currently, per Memorandum D8-1-1, goods imported temporarily under tariff item No. 9993.00.00 may remain in Canada for up to 18 months. The 18 month period is denoted under the section on Time Periods/Extensions (109 – 113). CARM will not introduce legislative changes with respect to the Commercial Temporary Importation of goods into Canada.

Regarding reaching a Point of Finality, is it true that if a shipment is selected for a secondary exam, that the importer can change their declaration? (CARM will give importers a lot of leeway with very little oversight, if this is indeed true).
No. Changes cannot be made to an electronic release document (for example, RMD, PARS, IID) once goods have arrived in Canada or until such time as the BSO rejects the release requesting importer/broker correct their declaration (CARM does not introduce any changes to the release processing of goods on a PARS, RMD or IID).

For C-type CADs created in the CARM Client Portal, the hard copy presentation of their CAD C-type at time of release is considered to be their declaration for purposes of release and final assessment of duties and taxes. This is the version that would be used in order to obtain a point of finality. It remains a necessary step, regardless if the release is submitted via RMD, IID or PARs (which represents over 97% of releases) or prepared in the CCP (C-types), that any errors discovered be corrected by the client prior to confirm and allowing release of goods from customs control.

What changes to E29B's and AMP's penalties will CARM create?
AMPs will move from the ICS platform to the CARM Internal Portal. All officers will need to access the internal portal in order to create and issue a Notice of Penalty Assessment.

The current paper E29B form will no longer be used for commercial goods. It will continue to exist for non-commercial goods. Importers will be required to complete the new temporary importation form for commercial goods in the CCP. A hard copy of the form is still to be printed off and present to the port by the importer. The port will still conduct the same review as they do today. Once they are satisfied that all is in order they will access the CARM Internal Portal to show the form has been processed. Subsequent follow up on the status of an outstanding temporary importation including acquittal will be done by accessing the CARM Internal Portal. There will no longer be any need to mail hard copies of the form back to originating customs office. All information relating to the temporary importation will be accessible in the CARM Internal Portal to all BSOs.

Will CARM be mandatory for importers? — a) What is to stop everyone from doing Commercial B15's? — b) If CARM is not mandatory by law what are the implications to an employee for utilizing other processes for exceptions?
While we are not saying that it is mandatory (the Government of Canada must adhere to accessibility of all Canadians and must therefore offer alternative options), there are implications, if you don't create an account. As of release 3, if importers wish to obtain release prior to payment privileges (release of goods before payment of duties and taxes) they must be enrolled in the RPP program via the portal and provide their own financial security (a bond or cash deposit). Importers will no longer be permitted to use the security of their customs broker. Importers who use the services of a customs broker to account for goods, must delegate access to them in the portal, otherwise they will not be able to account for the importer's goods as of Release 3.

Additionally, CARM system becomes the centralized system for trade chain partners to enroll in the various CBSA programs (for example, Carriers, Freight Forwarders, Commercial Importers, etc.).

Commercial Importers are not permitted to obtain release and account for commercial goods on the B15 (now BSF715). Discretion afforded to BSOs today will continue for exceptional and unique circumstances.

How will CBSA deal with importers who cannot use a broker's financial security?
CARM introduces the Agency decision to move from a broker to an importer financial security model. Importers will be given up to 180 days to post financial security in order to continue to benefit from Release Prior to the Payment of duties and taxes. Importers choosing not to enroll/post financial security will continue to be able to obtain release of their goods on a CAD C-Type.

With CCEPS machines needing replacement, will new printers be required and when will they be arriving?
Yes, new printers are required. Procurement for the new printers is underway and will be deployed starting October 2024.

What are tiles? Does every user have access to tiles? Will an employee need to use all tiles in their profile?
Tiles are the names of the individual applications used to access the different modules in the CARM system (aka "CARM Internal Portal", "Fiori"). This comes from the visual layout (see below).

Tile access is linked to a role and employees will only be able to view the tiles that are linked to the role they perform.

AMPS: Why move AMPS to CARM when there are currently no issues with AMPS?
Since the issuance of an AMP results in the assessment of revenues owing, AMPs will be moved from the ICS platform into the CARM system. This permits the centralization for revenue generating interventions into one system, allowing for efficiencies.

AMPS: There is a health and safety concern with the Notice of Penalty Assessments now notating first and last names of employees. We are also aware of concern of employee's email addresses going to external stakeholders. Job Hazard Analysis re: First and Last Names on Notice of Penalty Assessments. — a) Is CBSA of the legal opinion that their employees names can be released, posted and utilized because of their interpretation of danger?
CARM system enhancement will now allow for greater flexibility to AMPs issuing officers. Once the CARM system is fully deployed in October, AMPs issuing officers will have the choice to only include their badge#, first and last name or any variation thereof.

Please describe the training for BSO's. (Note: training by BIT qualified trainers).
Commercial Training: Approximately 200 regional CARM Commercial Facilitators received in person delivering of commercial training modules specifically designed for BSOs and Superintendents.

The training modules covered changes to commercial processing impacted by CARM including:

• C-Type CADs - Creating and Processing CAD C-types
• AMPS – Creating, Issuing, Correcting, Approving and search capabilities
• Customs Bonded Warehouse – Processing Type 10 CADs; Balance Report Functionality
• Temporary Importations (Commercial) – Creating, Processing and Acquitting

Videos have also been created and disseminated to the regions for each of the training modules indicated above.

To date over 2378 regional commercial employees and 205 regional trainers have received the training. Regional-led training will resume following Summer Action Plan.

Additionally, a CARM Commercial Quick Reference Guide has been developed and will be available on Apollo in September to support Regional "refresher" training and commercial resources beyond go live. This will be an evergreen reference document that will be updated as CARM enhancements are implemented.

Training on cash desk for regional commercial staff was presented on Aug 28th, 29th and Sep 5th.

Please describe the training for clerical employees. (Note: training by BIT qualified trainers).
For trade and commercial clerical staff see above. Additionally, the following training has/will be made available

Access to updated user guides (vendor developed) for self-guided learning.

• General overview
• Module training
• Q&A Sessions

Practical application through the internal launch environment (August to September 2024), Regions have delivered training to over 90 % of employees in Trade to date based on the training calendar.

Clerks involved in cash payment processing at commercial office sites will receive training on new cash desk functionalities.

When will the training be augmented to include live CARM training vs a simulation?
Live training/practice did take place in the CARM Experience Simulation environment for a select number of employees as a part of CES 1 and 2. Various CBSA business areas provided TCP's written scenarios to be simulated.

Stakeholders collaborated and performed simulations to ensure the system was working as expected.

Themed sessions were then held to discuss concerns/impairments/processes and allow TCPs and subject matter experts to provide feedback as well as offer CBSA the opportunity to provide clarification and/or look into the matters further.

Additionally, 8,800 employees were granted access to the CARM Internal portal as a part of the May 2024 launch. This is the a "live" pre-production environment that will allow further training through practical application. This environment is an exact replica of the access users will have at go-live.

Please provide all training related material related to CARM.
All staff have access to training materials and other pertinent CARM information through various Wiki links, Apollo and Atlas. A CARM webpage is currently available on Atlas, which is maintained, as updates become available.

Why did CBSA wait until May 2 to have this conversation/briefing if training has been happening with our members since September?
Trade management in the regions have been engaging with employees and CIU on training status over the past few years.

Additionally, Regional Management has also met with local Union representatives periodically.

For specific meetings at which the National CIU was engaged regarding CARM, please see below:

• NLMCC: November 13, 2019 – CARM discussed
• NLMCC: July 21, 2020 – CARM discussed
• NLMCC: November 25, 2020 – CARM discussed
• NLMCC: May 12, 2021 – CARM discussed
• NLMCC: November 24, 2021 – CARM discussed
• NLMCC: July 22, 2022 – CARM discussed
• NLMCC: June 21, 2023 – CARM discussed
• NLMCC: November 22, 2023 – CARM discussed

Adhoc meetings:

• April 19, 2024 – Informed of internal launch
• May 2, 2024 – Update on CARM status
• July 19, 2024 – CARM system demo

IT Helpdesk 365/24/7: What is the Agency's support plans for front-line IT problems related to CARM from either internal users or external users in a 24/7 environment and what is the anticipated service standard of the help desk. Our members have expressed concerns regarding Simulation help delays, demos being pushed back etc.
24/7 line is being dedicated to front line officers for IT and other imminent issues. The Border Task Force (BTF) will also be activated to address major concerns and escalate for decision.

The CARM Client Support helpdesk, in operation since April 2021, also serves both internal and external users.

The simulations were not planned to be supported at production-support levels.

IT: How is CBSA planning to properly test CARM before final rollout as our members have expressed concerns about troubleshooting in test phases outside their job duties and authorities?
CBSA has continued testing with the vendor and external stakeholders to avoid any possible IT issues. Testing and certification is ongoing with more clients. Additionally, the Agency has updated the existing System Outage Contingency Plan to incorporate directions for both internal and external stakeholders on the steps to follow in case of a CARM outage.