Canada Border Services Agency | More than half a billion for a portal “riddled with errors”

Planned cost overruns of 300 million, calculation errors, frequent postponements: the new collection system of the Canada Border Services Agency (CBSA) accumulates significant failures, show numerous documents produced in recent months and consulted by The Press.

The digital tool has already cost taxpayers more than half a billion, while authorized expenditure reaches 706.5 million, compared to an announced budget of 408 million – including maintenance – in 2019. The implementation of the phase The final phase of the project has been postponed for the umpteenth time from last May 13 to next October.

The initiative, in the works since 2010, aims to modernize the collection of duties and taxes on commercial goods. All importers and their trading partners will need to be registered in a customer portal to submit their declarations and payments directly online to the CBSA. It is now she who will be responsible for the calculations rather than the importers.

One of the hoped-for benefits is to increase revenue for the Canadian state by reducing “missed opportunities to apply taxes and duties” on nearly 800 billion goods imported each year, according to the CBSA. Annual gains currently estimated at some 40 billion.

On April 19, the CBSA explained that the full launch of the Assessment and Revenue Management System (ARMS) would not take place on May 13, as announced, due to the risk of a strike at the Public Service Alliance of Canada.

“The GCRA is ready for deployment,” the agency wrote in an April 19 statement. However, the day before, the Permanent Committee on International Trade (CPCI) had requested the “suspension of the entry into force of the GCRA system” for a completely different reason: it had just heard damning testimony from numerous trading partners on the system performance.

As of December 31, 2023, the digital project had already generated expenses of more than 560 million – 440 million in development and 120 million in maintenance –, according to a “proactive disclosure” document produced by the CBSA. Authorized spending reaches more than 700 million, a cost overrun of some 300 million compared to 2019 forecasts.

In a damning memorandum submitted to parliamentarians on April 8 and which went unnoticed, 22 organizations underline in particular that “the calculations of duties and taxes continue to be erroneous”. Among the signatories: the Canadian Association of Importers and Exporters (IE Canada), the Canadian Society of Customs Brokers, the Canadian Federation of Independent Business and the United States Chamber of Commerce.

“The state of the project and its numerous delays come entirely from the CBSA,” indicated Kim Campbell, former president of IE Canada, during a parliamentary committee held last March. “The inconvenient truth,” she added, “is that the CBSA did not follow a known IT [information technology] project methodology. The agency thus left us in a state of unpreparedness for the implementation of May 13, because it did not create a favorable environment. »

IE Canada represents more than 200 businesses “that rely on the movement of goods across Canada’s borders.”

The CBSA has conducted three rounds of controlled testing of the GCRA system, Campbell said.

Members of the Canadian Society of Customs Brokers (CSCB) raised “concerns about insufficient testing and unresolved flaws before the GCRA was in service” in a submission filed at the end of March. Brokers handle more than 90% of import transactions for nearly 230,000 Canadian importers.

On May 14, in a letter sent to the management of the CBSA and which La Presse obtained, the SCCD went further by naming seven “key problems” related to registration in the new portal.

It is “unthinkable” that a system of the scope of the GCRA would be devoid of “oversights” or “breakages,” responded Ted Gallivan, first vice-president of the CBSA, during an interview with La Presse by videoconferencing.

Mr. Gallivan, in office since September 2021, persists and signs: “I think it was ready.” He cites as proof the launch of the internal system, which has already made it possible to identify numerous errors in past declarations. In a 2017 report, the Office of the Auditor General estimated that “importers misclassified goods in more than 20% of cases.”

The GCRA, “it’s a bit of a mix between ArriveCAN and Phénix,” laments Simon-Pierre Savard-Tremblay, Bloc Québécois MP and vice-president of the Standing Committee on International Trade, referring to the two flawed federal digital projects. by scandals.

On March 21, the CPCI requested that the CBSA “produce crucial documents” – including incident contingency plans for the new GCRA system – within 15 to 20 days. “We have still not received the requested documents” to complete our study, deplores Mr. Savard-Tremblay.

The multinational Deloitte obtained by call for tenders most of the contracts awarded by the CBSA for the GCRA, in 2013, 2015, 2016 and 2018. The most recent contract alone, which runs until 2026 , has a value of 322 million, according to documents requested under parliamentary privilege and obtained by La Presse. Only two of the four suppliers who wanted to bid qualified for bid review, shows a CBSA presentation we viewed. In 2015, at the very beginning of the tender process, the launch of the portal was planned for 2020.

According to a “Senior Vice President’s Transition Notebook” published in 2019, the entire initial GCRA project was to cost $371.5 million – plus $36.5 million for maintenance – and be launched no later than July 31, 2021. A new iteration was scheduled for May 2022, then October 2023, and finally May 2024. Implementation of the final phase was again pushed back to October.

Already in 2021, an internal audit pointed out “significant delays in the design of the solution” which “impacted essential integration activities that need to be carried out, including resolving interface issues and conducting user acceptance testing”.

It is also the “poor performance” of Deloitte in the development of the GCRA system which would have served as an argument for ASFC senior management to use the services of GC Strategies – at the heart of the fiasco – to develop the application ArriveCAN. At least that’s what Cameron MacDonald, former CBSA employee and assistant deputy minister at Health Canada, told a parliamentary committee in November 2023.

Former CBSA President John Ossowski later denied the allegations.

“I am very vigilant to ensure value for taxpayers. I would say that every week there are in-depth discussions. So my role is to challenge, to never be satisfied and to always demand more. So that’s why I have difficulty answering the question. Deloitte follows suit and responds perfectly to the written needs of the Agency, but we push…”

Deloitte Canada declined our interview request. In an email sent to La Presse, she said she was “proud” of her “past and current projects for the Government of Canada.”

The firm McKinsey 

McKinsey was the only service provider to submit a bid, an OAG spokesperson confirmed to us. Other potential bidders had indicated that the criteria seemed “too restrictive” to them. “We found no evidence in the records maintained by the Canada Border Services Agency that justifies the decision not to address the bidders’ concerns,” writes the Auditor General (AG) in her report.

One of the suppliers suspended for its participation in the ArriveCAN scandal, Coradix Technology, also received a contract for approximately $400,000 at the beginning of the development of the GCRA system, around 2013, Ted Gallivan confirmed to us. , first vice-president of the CBSA.

“At the moment, the Agency ensures that a management committee scrutinizes any contract before it is launched,” he says. We want to ensure that, from now on, there are no questions about this type of shortcoming. »

In another audit published in February on the development of the ArriveCAN application, the AG deplored management flaws within the CBSA. “This is probably some of the worst financial record keeping I have ever seen,” she wrote.

In its March submission, the Canadian Association of Importers and Exporters (IE Canada) asks the Standing Committee on International Trade to mandate the AG to produce a review report on the “management and execution of the project, cost overruns and supplier management” by October 1, 2024.