As trucking companies continue to grapple with thin margins and ever-escalating operating costs, it’s imperative governments do what they can to ensure the competitive playing field remains levelled across the industry, says the Canadian Trucking Alliance.
Asked by the Treasury Board to identify areas where government practices, regulations or lack of involvement could impede industry growth, progress and introduction of new technology, CTA submitted a document that explains the impacts on trucking and highlights options for Ottawa to remove some of these barriers, including regulatory investigation.
The central theme of CTA’s report focused on competitive issues, namely how conscientious, law-abiding trucking companies are finding it increasingly difficult to compete with non-compliant domestic carriers that take advantage of the lack of national oversight in Canada as well as U.S. fleets, which already enjoy healthy cost/tax benefits over their Canadian counterparts.
“To maintain the integrity of a strong and progressively viable trucking industry, the government needs to ensure that any company or driver operating in Canada is compliant with all of the proper safety, environmental, labour and tax laws,” said CTA president Stephen Laskowski. “We need to make sure compliance is rewarded, not the other way around. We look forward to working with the federal government about finding new solutions and removing some of the barriers that hamper competitiveness and growth.”
Here are some brief highlights of a few issues, impacts and potential solutions raised by CTA. The full report submitted to the Treasury Board can be found here: Treasury Board Report_public
US Carriers
More flexible tax rules in the US, coupled with double-digit corporate tax reductions under President Trump and the natural advantages of economies of scale, are severely hurting Canadian carriers’ ability to compete, even on our own turf. The Capital Cost Allowance (CCA), for example, is accelerated in the US, allowing US carriers to free up capital to invest back into the company. CTA recommends the government provide an accelerated CCA rate, at least for carbon reducing trucking equipment. Relatedly, the federal government should also outline how it plans to register and monitor U.S. carriers regarding carbon pricing in Canada, which Canadian carriers will be obliged to pay, as well as ensuring each Canadian jurisdiction will follow Ontario’s lead in including U.S. carriers in their respective safety rating monitoring systems.
Truck Safety
Enforcement of most federal mandates is deferred from Ottawa to the provinces, which is the root source of the industry’s frustrations with the lack of uniformity and inconsistent regulatory developments among all jurisdictions, including hours of service, roadside enforcement and mandatory entry level training, among other issues. CTA would welcome a conversation with Ottawa on how the National safety Code could be developed on a national basis and eventually deployed consistently.
Labour
The current immigration system is impeding the trucking industry’s ability to service the Canadian economy by not allowing companies to recruit professional truck drivers from around the world, specifically by making changing to the temporary foreign worker program. Additionally, the industry would welcome the federal training/apprenticeship opportunities afforded other sectors under the program.
Taxation/Classification
More trucking companies are incorporating truck drivers and employing them to drive company vehicles with no financial obligation to operate or maintain the equipment. This practice of failing to properly file taxes, if not properly identified and enforced, will hamper the competitiveness, labour, and recruitment practices in trucking. Failure to modernize policy and enforcement will leave our sector in a difficult position of not having proper guidance on tax compliance while leaving open the opportunity for some companies and drivers to avoid paying their fair share of taxes, says CTA.
Environment
The trucking industry is proud of its environmental achievements to eliminate pollutants and reduce carbon emissions from diesel engine, but as CTA points out, this progress has come with significant increases in the purchase price of vehicles and associated operating and maintenance costs. Consequently, some fleets are removing emission control equipment from trucks to increase reliability and reduce operating expenses. CTA would like to see the federal government adopt increased powers to tackle tampering.
See the full report to the Treasury Board here. Treasury Board Report_public