Owner/Ops: Are you entitled to share of $15M settlement?
January 24, 2011
January 24, 2011
If you were a Canadian owner/operator hauling into the US between 1991 and 2002, the carrier you worked for at that time may have a cheque for you. As I first reported last week, a group of about 35 carriers has won a landmark settlement against Canada Revenue Agency that will see up to $15 million returned to their owner/operators.
The issue involves the federal excise tax paid on diesel that was consumed outside Canada. The carriers, represented by Manitoba-based lawyer Israel Ludwig, managed to convince CRA that the diesel they brought into the US qualified as an ‘export,’ making it eligible for an excise tax rebate. Carriers received rebates for company-owned trucks in 2003, however, the battle continued on behalf of owner/operators for several years.
CRA’s position was that, as independent businesspeople, the owner/operators should have filed on their own. Ludwig, on the other hand, argued that’s not how the industry works. Often, the carrier orchestrates fuel purchasing using company cards and then deducts it from their owner/operators’ pay. In November, CRA agreed to reimburse the carriers for the excise tax paid by their owner/operators. The first cheques have gone out to three fleets that served as test cases: Nolan Transport, Bison Transport and Penner International.
Nolan has already made payments to the owner/operators that qualified for the rebate with some of them receiving up to $16,000. Owner/ops who bought fuel in Canada and did most of their driving in the US stand to gain the most. While Israel told me it would be illegal for carriers to pocket the rebate rather than pass it on to the owner/operators who earned it, there are some concerns about just how hard some of the carriers will work to track down owner/ops who may not have worked for them for more than a decade. I visited Nolan Transport the other day, and co-owner Kelly Nolan admitted it’s a lot of work. Yet, she has enjoyed calling past owner/ops, catching up and, oh yeah, telling them she’s got a cheque for them.
Kelly comments on the experience in this video.
The other 30-plus carriers involved in the settlement will be receiving cheques in the next 60-90 days, Israel told me. Carriers that weren’t audited back in 03 or 04 will have to wait till their audits are complete, to determine just how much they’ll receive. While I suspect most, if not all, carriers will do the right thing and pass the funds onto their owner/operators, I’ve filed an Access to Information request with CRA to see who was involved in the settlement and how much each carrier received. (Israel wouldn’t provide me with the list due to client confidentiality obligations). I’m hoping we can play a role in connecting these companies with owner/operators who may be in line for a payment.
It’s a great story, as it’s not every day owner/operators get an unexpected cheque from Revenue Canada. Unfortunately, if you weren’t working at the time for a carrier that was among the few dozen who brought this case to court, you won’t be able to make a claim. The feds passed legislation in 2003 that closed this loophole and prevents any further claims on fuel purchased in Canada and consumed elsewhere.
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at firstname.lastname@example.org or follow him on Twitter at @JamesMenzies. All posts by James Menzies