Canada's C$800 Million Customs System Still Relies on 38 Workarounds, Audit Finds

Canada's customs revenue system is calculating duties and taxes on commercial imports, but the federal agency operating it has not delivered the efficiency gains expected from more than C$800 million in development and maintenance spending, according to an Auditor General report tabled on 29 October 2026.

The Canada Border Services Agency Assessment and Revenue Management system, known as CARM, went live in October 2024 after a three-year delay. The audit says it accurately processed commercial import declarations. That distinction matters: the finding is not that the system failed to collect revenue, but that staff and businesses have been left navigating functions that do not work as originally envisaged.

**The cost of the workarounds.** At least 38 manual workarounds remained in place 20 months after launch, despite the agency's plan to eliminate them within one year. Auditors estimated that staff would spend at least 92,000 hours a year navigating these processes, time that could otherwise support closer examination of higher-risk customs declarations. The agency continued using parts of older systems alongside CARM.

The audit also identified an accumulated funding shortfall of about C$60 million by the end of fiscal 2025–26. It said deployment delays raised costs and that the agency diverted approximately C$88 million from other budget lines to maintain and upgrade CARM. These figures describe different accounting measures and should not be added together as though they were separate proven losses.

**Businesses are bearing delays too.** Importers contacted the agency for help an average of 19,000 times a month. As of June 2026, more than 4,000 assistance requests remained unresolved; cases took an average of 34 days to resolve, and some had been open more than 500 days. The Auditor General said the agency lacked a clear service standard telling businesses how long to expect to wait.

The stakes extend beyond a software project. The federal government collected about C$42 billion in customs duties and taxes on imported commercial goods in 2024–25. Because importers declare the information on which the system calculates payments, reliable support and staff capacity to review suspicious declarations are part of revenue protection. The audit did not establish a quantified loss of tax revenue from the workarounds.

The Auditor General recommended meaningful performance indicators to test value for money and published service standards for resolving requests and technical incidents. Those are measurable accountability tests: whether the agency reduces manual effort, clears its assistance backlog and can demonstrate that the investment is producing the promised benefits.

This report is based on the Auditor General's primary audit and independently originated Canadian Press coverage of the findings. It does not allege fraud or claim to have discovered the underlying audit findings before their public release.