Issue notes: Standing Committee on Public Safety and National Security—Supplementary Estimates (B), 2024 to 2025 (December 3, 2024)

Funding modernizing Canada's border infrastructure: the Land Border Crossing Project

Proposed response

As part of its commitment to border modernization, in June 2021, the CBSA received approval to rebuild up to 24 land border ports of entry. This was supported with a $481 million investment (including $41 million remaining from Budget 2012).

These investments will improve the border crossing experience for travellers, provide border services officers with upgraded infrastructure and technology, and support safety and security.

In July 2024, the Agency received revised project approval from the Treasury Board based on updated estimates and plans for infrastructure upgrades and replacements under the Land Border Crossing Project.

The amendments to these authorities were required as a result of significant cost increases to the projects, driven primarily by inflation affecting the Canadian construction sector at large.

Financial implications

The CBSA is receiving $23.1 million in the 2024 to 2025 Supplementary Estimates B in order to finish planning and start the construction program at the St-Bernard-de-Lacolle port of entry.

The funding is broken down as follows:

• $0.1 million under Vote 1 – Salary
• $0.2 million under Vote 1 – Operating
• $0.9 million under Vote 5 – Capital Salary
• $21.9 million under Vote 5 – Capital

Background

In June 2021, the CBSA received project approval to rebuild up to 24 land border ports of entry (three full service ports and 21 smaller ports). As part of its commitment to border modernization, CBSA is upgrading and replacing ports of entry to improve the border crossing experience for travellers and provide border services officers with better infrastructure and technology.

With an investment of $481 million (including $41 million remaining from Budget 2012) the CBSA committed to rebuilding the St-Bernard-de-Lacolle POE over seven years, completing construction in fiscal year 2028 to 2029.

In July 2024, the Agency received revised project approval based on updated estimates and plans for infrastructure upgrades and replacements under the Land Border Crossing Project. In summary, of the original 24 ports identified in 2021, one of the three full-service ports (St-Bernard-de-Lacolle) and nine of the 21 smaller ports can proceed to implementation under the current budget. The Agency can also proceed with definition activities of the two full service ports under the revised project approval, namely Pacific Highway in British Columbia and St-Armand in Quebec.

The amendments to these authorities were required as a result of significant cost increases to the projects, driven primarily by inflation affecting the Canadian construction sector at large.

The CBSA is partnering with Public Services and Procurement Canada (PSPC) Real Property Services as the main procurement authority and delivery agent on this project.

Financial implications

The below table represents the 2024 to 2025 funding profile (in millions $):

The following full-time employees are associated with this funding:

Breakdown of funding for 2024 to 2025 (in millions $):

Funding to combat vehicle theft

Key message

The government's National Action Plan to Combat Auto Theft (the Action Plan) outlines steps we are taking to disrupt, dismantle and prosecute organized crime.

It builds upon the successes and collaborative efforts with our provincial, territorial, municipal and industry partners following the National Summit on Combatting Auto Theft held in February 2024.

The first quarterly update of the Action Plan was released on October 16, 2024. Thanks to the sustained efforts of many federal departments and agencies, as well as external partners, Canadians are able to see the tangible progress made in recent months to combat vehicle theft.

From the swift statutory updates implemented in the past few months to the cross-jurisdictional law enforcement actions undertaken by the RCMP, the CBSA and their partners, it can be said that the implementation of the Action Plan initiatives is progressing well and already having a positive impact on the ground.

Early national auto theft trends for 2024 show a 17 per cent decline in auto theft in the first half of the year compared to the same period last year. The Insurance Bureau of Canada also reported a decrease of 19 percent in auto theft related claims during the first six months of the current calendar year.

We are aware that criminal networks are quick to adapt, and that is why the Government of Canada will continue to work actively with all our partners to ensure a comprehensive and agile response to this evolving criminal trend.

As you know, earlier this year, I had the pleasure of announcing federal investments of $45.8 million over three years on a cash basis ($30.8 million for CBSA and $15.0 million for PS), starting in 2024 to 2025, to support key initiatives that are currently being advanced by both PS and CBSA.

To date in 2024, the CBSA has intercepted more than 2,100 stolen vehicles, which already surpasses last year's number of 1,806.

Financial implications

Specifically, the $15.0 million allocated to PS will allow the Department to further a series of measures along the following streams:

• First, $9.1 million will permit the establishment of contribution agreements to support police of local jurisdiction in Ontario and Quebec to improve their capacity to provide timely referrals, information and actionable intelligence to the CBSA, as well as take custody of stolen vehicles intercepted by the CBSA
• Second, $3.5 million to support INTERPOL in combatting transnational organized vehicle crime by strengthening member states law enforcement agencies capacity to identify and recover stolen vehicles abroad
• Finally, $2.4 million will allow PS officials to pursue engagements with domestic and international partners. This includes actions such as the standing up of the National Intergovernmental Working Group on Auto Theft with federal, provincial and territorial (FPT) partners, which met earlier this fall to ensure a coordinated response to auto theft

The CBSA will receive $30.8 million on a cash basis broken down as follows:

• $5.8 million over three years to enhance the capacity of the CBSA's intelligence programs to share information with partners and combat stolen vehicle export
• $3.2 million over three years to enhance the CBSA's capacity in the Greater Toronto Area Region by adding front-line border services officers to examine rail shipments containing suspected stolen vehicles prior to their movement to a port of export such as Montreal
• $5.4 million over three years to enhance the CBSA's examination capacity by adding front-line border services officers to increase the CBSA's export examination capacity in the Quebec, Atlantic, and Pacific Regions
• $6.7 million over three years to explore the use of and acquire detection technology in disrupting the stolen vehicle continuum
• $7 million over three years to conduct foundational work to develop data science solutions and visualizations, as well as to explore a data-driven intelligence response to support information sharing across the Public Safety portfolio and enhance the existing export compliance dashboard with intelligence-specific capabilities
• $2.1 million over three years to review existing legislation and regulations to identify gaps in export reporting requirements and information sharing with partner agencies
• $600,000 over three years for CBSA force generation costs

Background

An estimated 90,000 cars annually (or one car every six minutes) are stolen in Canada. This results in approximately $1.2 billion in annual costs to Canadian insurance policy-holders and tax payers.

Auto theft is viewed as low risk with high profit, and thieves often coordinate a multi-step process to track desirable, newer models of SUVs or trucks from public spaces to owners' homes where they use sophisticated electronic devices to gain access to the vehicle. The theft typically happens at night and can take only a few seconds. Stolen vehicles are then either exported or dismantled for their parts, like catalytic converters that can be worth $800 to $1,200 alone.

According to Équité Association, a national not-for-profit organization that supports Canadian insurers to fight fraud, Quebec and Ontario had the highest number of vehicle thefts in 2023 with more than 7,800 and 15,000 vehicles, respectively, stolen during the first six months. In 2022, rates of vehicle theft rose by around 50% in Quebec and 48.3% in Ontario compared to the previous year.

Auto theft is not always just about stealing a vehicle from someone's driveway. Organized crime groups are increasingly using the export of stolen vehicles as a means of transnational money laundering, as compensation for other illicit commodities such as drugs and as part of insurance fraud.

While a downward trend has been observed in the first half of the year, rates of vehicle theft are expected to increase as organized crime groups become more skilled in sustaining their revenue flow from stolen vehicles.

Public Safety Canada

The Government of Canada is investing $15 million over three years to support law enforcement agencies' work to combat auto theft through Public Safety Canada's (PS) Contribution Program to Combat Serious and Organized Crime (CPCSOC). PS is actively engaging with police of jurisdiction where auto theft is prevalent to establish contribution agreements that will allow for improved capacity to provide timely referrals, information and actionable intelligence to the Canada Border Services Agency (CBSA) and to contract additional capacity to take custody of detained stolen vehicles from the Agency. Efforts are being made to complete contribution agreements by mid-to-late fall 2024.

Of that investment, $9.1 million will be shared between the Provinces of Ontario and Quebec to enter into multi-year, bilateral contribution agreements to improve their capacity to provide timely referrals, information and actionable intelligence to the CBSA, as well as take custody of stolen vehicles intercepted by CBSA.

To enhance information sharing and investigative tactics to identify and retrieve stolen vehicles and parts around the world, INTERPOL's joint transnational vehicle crime project will receive $3.5 million over three years. PS is actively engaging with INTERPOL to establish a contribution agreement in the mid to late fall 2024.

In addition, the Government of Canada will continue to engage its domestic and international partners to ensure a coordinated response to this issue, supported through an investment of $2.4 million. Within Canada, federal, provincial and territorial officials have been identified as members of the National Intergovernmental Working Group on Auto Theft. The first meeting of the Working Group will occur in the late summer/early fall timeframe.

Canada Border Services Agency

The CBSA provides critical support to law enforcement partners to disrupt, investigate and ultimately prosecute these crimes. Upfront, preventative and investigative work—within Canada, ahead of reaching the border—is imperative to reduce auto theft overall. The CBSA counts on police to provide timely referrals and intelligence, to take swift possession of stolen vehicles, and to successfully prosecute cases to stem vehicle theft at the source. In addition, the CBSA also performs searches based on its own intelligence.

The Government of Canada is increasing the capacity of the CBSA by investing $30.8 million on a cash basis to detect and search shipping containers for stolen vehicles, as well as enhance collaboration on investigations and intelligence sharing with partners across Canada and internationally. This includes exploring detection technology solutions and the use of advanced analytical tools. The CBSA has established a 24/7 central point of contact for police of jurisdiction (POJ) to coordinate requests to locate vehicles that may be tracked to a marine port or intermodal facility. The "GPS tracking protocol" for auto theft victims has been developed and was widely distributed to law enforcement agencies in Canada in June 2024.

Funding for the Market Watch Unit for trade remedy measures

Key message

This funding is intended to create a dedicated Market Watch Unit to monitor and update trade remedy measures annually, protect Canadian workers and business from unfair trade practices, and ensure greater transparency and market predictability.

It will respond to the need for more frequent updates of normal values to ensure anti-dumping duties accurately reflect the current level of dumping.

[Redacted]

Financial implications

The CBSA is receiving $2.1 million in the 2024 to 2025 Supplementary Estimates (B) for Market Watch Unit for Trade Remedy Measures.

The funding is broken down as follow:

• $1.3 million under Vote 1 – Salary
• $0.8 million under Vote 1 – Operating

Background

The CBSA currently enforces over 150 measures on products from 43 countries, covering a wide variety of industrial and consumer products, from steel products to refined sugar. These measures directly help protect approximately 31,000 Canadian jobs and $11.6 billion in Canadian production.

Dumping is identified when goods are sold to Canada at prices lower than in the exporter's domestic market (normal value), and if the Canadian International Trade Tribunal (CITT) finds that these goods harm Canadian industries, the CBSA imposes anti-dumping duties.

Budget 2024 allocated $10.5 million (including Employee Benefit Plan (EBP), Public Services and Procurement Canada (PSPC), and Shared Services Canada (SSC) costs) over one year for the CBSA to establish a Market Watch Unit, which will monitor and update trade remedy measures annually. The funding will allow the CBSA to create a framework for automatic annual reviews of normal values. A tiered approach will streamline updates, with simpler cases being processed more quickly, while more complex ones will receive additional resources.

[Redacted]

Financial implications

In 2024 to 2025 the CBSA requested $2.1 million of funding through the Supplementary Estimates (B) broken down as follows.

• $1.3 million under Vote 1 – Salary
• $0.8 million under Vote 1 – Operating

The following FTEs are associated with this funding:

Breakdown of Funding for 2024 to 2025 (in millions $)

Funding for the administration of the Vaping Excise Duty Framework

Proposed response

The Canada Revenue Agency (CRA) has authority to collect excise duties on vaping products manufactured or stamped in Canada.

The Canada Border Services Agency (CBSA) supports compliance and enforcement activities of the CRA, as well as other government departments.

[Redacted]

Financial implications

[Redacted]

Background

[Redacted]

In 2023 to 2024, activities supporting the Vaping Excise Duty Framework were funded by a cost recovery mechanism from the CRA. The ongoing Budget 2024 funding will allow the CBSA to pay for these activities internally moving forward. The move from a cost-recovery model is necessary to ensure predictable funding for this program.

The activities provided by the CBSA related to the Vaping Excise Duty Framework include physical and scientific analysis and technical advice and guidance.

The CRA is in the second year of audits which, along with current legislative amendments, related to the Vaping Excise Duty Framework, will result in more samples (including physical and scientific analysis - verifying the application and legitimacy of Excise Stamps, determining the composition of products seized, producing forensic conclusions, etc.) from Vaping product licensees and vaping prescribed persons. There is an anticipated increase in demand for CBSA services because of this increase in CRA audits. The CBSA anticipates being able to meet this increased demand with this ongoing funding.

Financial implications

[Redacted]

Statutory appropriations: Employee Benefit Plan

Proposed response

For planning purposes, as of April 1, 2019 the Employee Benefit Plans (EBP) must be calculated at 27% of an employees' salary based on Treasury Board Secretariat (TBS) instructions for all new initiatives.

Financial implications

The Canada Border Services Agency (CBSA) will be receiving a total of $2.1 million in EBP for 4 new funding requests through the 2024 to 2025 Supplementary Estimates (B).

Background

The statutory item "Employee Benefit Plans" includes costs to the government for the employer's matching contributions and payments to the Public Service Superannuation Plan, the Canada and the Quebec Pension Plans, Death Benefits and the Employment Insurance accounts.

Vote Netted Revenue

Proposed response

Vote Netted Revenue (VNR) is the authority to apply revenues earned by an organization to cover the costs incurred for specific activities by that organization. This authority allows the Canada Border Services Agency (CBSA) to use revenue from the sale of products or services to finance directly related expenditures.

Types of VNR include services of a regulatory nature, such as NEXUS and food inspection fees, as well as non-regulatory services such, as the collection of taxes on behalf of the provinces.

Financial implications

The adjustment to VNR is due to an increase in volumes from existing user service fees from the NEXUS program.

The funding is broken down as follow:

• $5.3 million under Vote 1 – Salary
• $(5.3) million under Vote Netted Revenue

CBSA's VNR forecast trend line is expected to surpass CBSA's VNR maximum authority of 125% with the current NEXUS forecast.

Background

The Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) NEXUS program speeds up border crossings for frequent travellers from Canada and the United States. Since 2002, the bilateral trusted traveller program has supported communities and economic interests on both sides of the border by expediting the crossing of pre-screened travellers and allowing border officers to focus more attention on stopping illegal activities and criminals. The NEXUS program currently has over 1.9 million members, with the majority of members being Canadian.

The revenue from NEXUS fees collection increased by $2.3 million in the first quarter of 2024 to 2025 compared to the same period last fiscal year (2023 to 2024), and is expected to have an overall $5.3 million increase by year-end, which exceeds the benchmark limit.

CBSA's VNR forecast trend line is expected to surpass CBSA's VNR maximum authority of 125% with the current NEXUS forecast.

Financial implications

The table below represents the historical authorities and expenditures by fiscal year as well as the 2024 to 2025 funding profile (in millions of dollars):

Transfers (from/to other government departments)

Proposed response

The Canada Border Services Agency (CBSA) transfers funds to and from other organizations for the administration of joint responsibilities or initiatives and cost sharing agreements.

Financial implications

• The CBSA is receiving a net amount of $1.4 million in Vote 1 Operating from other organizations through the 2024 to 2025 Supplementary Estimates (B)
• The CBSA is receiving transfers from the following organization:
  • $1.7 million from the Royal Canadian Mounted Police to administer the import requirements of the Firearms Act
• The CBSA is transferring funds to the following organizations:
  • ($0.05 million) to the Department of Crown-Indigenous Relations and Northern Affairs to support the work of the Jay Treaty Border Alliance - Collaboration Initiative
  • ($0.2 million) to the Department of Foreign Affairs, Trade and Development to provide support for departmental staff located abroad