I don't understand how international bags can be transferred to a domestic flight without opportunity for customs inspection? Maybe if there is a concern the bags are somehow intercepted.

Can anyone explain?

Also, I flew FRA-YYC-YVR after March 30 and still had to pick up and transfer my bags in YYC. So was the new system not operational yet? The lounge agent in FRA was talking about the new process, but that shed no light on this either.