Shipping containers are moved in the Port of Montreal, in Montreal, Monday, Sept. 30, 2024. THE CANADIAN PRESS/Christinne Muschi
A new online tax collection portal for goods entering Canada is set to launch this week, but importers are already voicing concerns about its potential impact, including disruptions that could affect consumers.
The Canada Border Services Agency (CBSA) is introducing this digital platform, known as the Assessment Revenue Management project (CARM), on Monday. The goal is to modernize the lengthy, paper-driven customs processes that have been in place for years. The portal aims to provide around 40,000 shippers direct access to their data, making it easier to submit necessary documents and strengthen enforcement. However, initial reports suggest the transition is proving challenging for many.
Many importers have raised issues regarding the registration process and navigating the new system. Lisa McEwan, co-owner of Hemisphere Freight, a customs brokerage firm, mentioned that she has had to hire extra staff just to manage onboarding and assist clients with understanding payment procedures. She highlighted that discrepancies in information—such as business numbers, customs bonds, and even minor address differences—can create obstacles in the registration process. If the information provided by users does not align perfectly with the Canada Revenue Agency (CRA) records, it can halt registration and shipment.
“Sometimes the CRA has an address listed as unit 68 when it should be unit 69, which prevents onboarding,” McEwan explained. This mismatch often requires users to contact the CARM hotline for help, leading to long wait times. “At one point, it took four weeks to get a response,” she noted, observing that federal employees seem overwhelmed by the influx of inquiries.
The CBSA, however, asserts that CARM aims to replace outdated systems, improve compliance with trade regulations, and reduce revenue losses. In a statement, Guillaume Bérubé, a representative of the agency, expressed confidence in the project, citing extensive consultations and testing to facilitate the transition.
Despite these assurances, the challenges posed by the new platform could result in delays and increased costs for businesses, which would likely be passed on to consumers. Dave Pentland, vice-president of Carson International, a customs brokerage firm in Vancouver, warned that any slowdown in trade would typically incur additional costs.
Some businesses are reconsidering their Canadian shipments altogether. McEwan noted that some of her U.S.-based clients are opting out, citing the hassle involved in navigating the new system. This could mean fewer available products in Canada.
As of mid-October, about 99,300 shippers had registered to use the portal. However, according to Statistics Canada, there were nearly 164,000 importers in Canada last year, indicating that a significant number of domestic importers still need to sign up.
The government initiated a soft launch a year ago to help some importers test the system, but the rollout has faced delays, having already been pushed back six months previously. The CBSA conducted numerous consultations and technical sessions over several years to prepare for this launch.
Despite the hurdles, many larger importers support the change due to its potential for increased efficiency. John Corey, president of the Freight Management Association of Canada, acknowledged the benefits of reducing paperwork, but noted that smaller importers may struggle more with the changes.
If successful, the new system could help catch misclassifications and improve tax collection. The CBSA estimates that it could prevent around $216 million in incorrect tax exemptions annually. While the government has invested approximately $182 million in the consulting firm Deloitte for this project, the potential benefits could outweigh the costs. McEwan recognizes the portal's potential but emphasizes that the path to realizing those benefits is fraught with challenges.
