The primary purpose of the collective Thomson scattering (CTS) diagnostic at ITER is to measure the properties of fast-ion populations, in particular those of fusion-born $alpha$-particles. Based on the present design of the diagnostic, we compute and fit synthetic CTS spectra for the ITER baseline plasma scenario, including the effects of noise, refraction, multiple fast-ion populations, and uncertainties on nuisance parameters. As part of this, we developed a model for CTS that incorporates spatial effects of frequency-dependent refraction. While such effects will distort the measured ITER CTS spectra, we demonstrate that the true $alpha$-particle densities can nevertheless be recovered to within ~10% from noisy synthetic spectra, using existing fitting methods that do not take these spatial effects into account. Under realistic operating conditions, we thus find the predicted performance of the ITER CTS system to be consistent with the ITER measurement requirements of a 20% accuracy on inferred $alpha$-particle density profiles at 100 ms time resolution.