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Income tax

CBSA's $526-Million CARM System Faces Scrutiny from Auditor-General

Strategic Insights

— 1 min read

Auditor-General Karen Hogan is planning to launch an audit of the Canada Border Services Agency's (CBSA) new system for collecting duties and taxes from commercial importers, known as the Assessment and Revenue Management (CARM) system. The system, which has been in development for over a decade, aims to modernize the out-of-date software used to collect duties and taxes, but industry stakeholders have raised concerns about technical issues, delays, and frustrations for importers. The audit will review the project, which has been implemented in phases, and examine the decision-making behind the large-scale project.

Key Takeaways:

  • The CBSA's CARM system, developed by Deloitte, has cost over $402.4 million, with $398.8 million paid to the company as of June 25.
  • The original cost estimate for the system in 2010 was $370 million, with the total approved budget increasing to $526 million.
  • Industry stakeholders have raised concerns about technical issues with the new system, including delays, frustrations, and overwhelming processes for small importers.
  • Business groups, including the Canadian Society of Customs Brokers and the Canadian Chamber of Commerce, continue to face challenges working with the CARM system.
  • The border agency is facing scrutiny over its use of private IT contractors, including Deloitte, on the ArriveCan app project, with a former CBSA official stating that Deloitte was "in a timeout penalty box" due to performance issues on the CARM project.
  • The Audit-General's office has confirmed that an audit will be launched, but has not yet publicly announced the timing or details.

Statistics:

  • The CBSA collects billions of dollars each year in import duties, representing the federal government's second-largest source of revenue after income taxes.
  • The CARM system aims to eliminate cumbersome and time-consuming paper-based processes and will help the CBSA target compliance and enforcement efforts.
  • Industry stakeholders have reported dozens of calls per week to the Canadian Federation of Independent Business (CFIB) about issues with the CARM system.

Sources:

  • "Audit confirms $59.5-million cost to develop ArriveCan app", The Globe and Mail
  • "CBSA's $59.5-million ArriveCan app was initially budgeted for $80,000", The Globe and Mail
  • "Canadian Association of Importers and Exporters", The Globe and Mail

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