Dumped regulation

by Carroll McCormick

MONTREAL, Que. – Canada’s last bastions of regulated trucking may have fallen Jan. 1, with the deregulation of bulk haulers in Quebec and B.C., but experiences in the two provinces are a world apart.

Quebec created new barriers to entry that still give preferential treatment to the province’s truckers who held contracts in a regulated world. In B.C., log haulers face their new market reality in an era of cut-throat competition.

The provinces had been the nation’s last holdouts against deregulation, but after a two-year reprieve from the repeal of Part 3 of the Motor Vehicle Transport Act, the official barriers finally dropped.

Under Quebec’s Bill 89, adopted in December, the VR plate needed to operate in the bulk sector in the province’s 10 districts has been abolished. But replacing it are two new agreements. For log haulers, hiring is now based on seniority. A base contract, which is simply a guide to the items that must be negotiated between haulers and mills, must be followed. (This arrangement will be in force until 2005.) Otherwise, this sector is now completely open to haulers from other provinces.

The private sector of the aggregate industry is completely deregulated for residents and non-residents. But the deregulation for its public sector has been written to limit who can play, and where.

“You tell me there’s no roadblocks in my way,” fumes Dwayne Mosley, a liason and negotiator for the Greater Ottawa Truckers Association. He says it is too expensive for his members to qualify for Quebec work, their truck configurations put them at a disadvantage, and Quebec aggregate haulers shut out of the deregulation deal will pour into Ontario looking for work under its come-one, come-all terms.

First, all holders of the coveted VR plates for aggregate hauling – 7,500 of them – were automatically registered with the Commission des Transports’ new bulk hauling registry. Next, these registrants must, by March 31, sign a contract with a Quebec brokerage service for the region in which they were previously allowed to operate. This entitles them to preferential treatment in the awarding of provincial or municipal contracts.

Quebec truckers without VR plates were not entered in the CTQ bulk-hauling registry, and they will not be allowed to haul aggregate under public contracts. Aggregate haulers outside of Quebec, however, can register with the CTQ, sign with a brokerage service and work for public contracts – but only within a single Quebec region.

Eligible aggregate haulers who do not sign with a brokerage service by the end of March will lose preferential hiring privileges for the life of the approach, which lasts until 2007.

Mosley says the brokerage agencies are also too expensive. He cites a $600 initiation fee, then another $1,380 yearly fee, with two years due up front. And Quebec municipalities can charge fees for permits to haul under their contracts: $300 for Hull and $275 for Aylmer, for example. Mosley says he has also been told that preference will be given to city residents. “I might not get an ounce of work,” says Mosley. “The government is encouraging the municipalities (to impose fees). You know why? Because they know truckers are not stupid enough to pay.”

Add to that the disadvantage experienced by Ontario tri-axle haulers, who have to lift an axle when crossing into Quebec. They’re limited to less weight than true Quebec tandems.

“If you send me a tri-axle from Ontario to drive asphalt, and you can only carry 14 tonnes, but the Quebec tandem can draw 19, I won’t want you,” says Mosley.

If an Ontario road-building company wins a contract in Quebec, it will only be allowed to supply 25 per cent of the required number of dump trucks with its own vehicles. The other 75 per cent will have to come from a brokerage service.

Bert Hendrix, the general manager of Beaver Road Builders Ltd. in Gloucester, explains the implications: The company’s first truck on a job requiring four trucks will be allowed to work, but the next three will have to come from a brokerage service. If an Ontario company has five trucks registered to work in Quebec, and gets a contract requiring 12 trucks, he might never be eligible to use the fifth under the 75/25 rule.

How many trucks should a company register? “I wouldn’t put a second truck on. I’d put one truck on, but not more,” Hendrix says.

Beaver does not own dump trucks; it hires independents. Any of his independents registered to work in Quebec could haul. Otherwise, Beaver would have to hire Quebec trucks. For a short job, say a half-day, Hendrix wonders what would happen. “What trucker in Quebec would sit home for half a day so he can work for me for half a day?”

Mosley thinks that deregulation in Quebec and Ontario is out of whack – heading east to work costs a bundle, going west into Ontario is a breeze. “Ontario gets absolutely zilch out of the Quebec truck. But if I want to go to Quebec, it costs me $4,000 a truck. Where’s the fairness in that?”

He takes a more militant stance when describing the trouble that could be on the horizon.

“We will do anything we have to to protect our livelihoods,” Mosley warns. “We will shut down any work that is awarded to Quebec aggregate haulers. We might shut the bridge (linking Ottawa and Hull, Que.).

As for those Quebec haulers who never had VR plates and can’t haul public aggregate until 2007, Mosley says they still have opportunities in Ontario. “He buys tri-axles and comes to Ontario and competes the shit out of us.”

In B.C., deregulation is complete. The province had still been divided up into 22 licensed districts for log and dump operations. But now the lines on the map and their permits have been erased.

The final push to deregulate the bulk sector actually took several steps, says the B.C. Trucking Association’s Paul Landry. After intensive lobbying, the provincial government dropped the requirement for truck plates, operating authorities, Motor Carrier certificates and the associated fees as early as January 1999.

Said Jack Davidson, the president of the B.C. Road Builders and Heavy Construction Association, “You know, we went through deregulation without noticing it. It didn’t affect us.”

In Alberta, says Al Smyth, the director of rules and regulations for the Alberta Trucking Association, “It is not an issue because there is not a lot of activity between the two provinces in these sectors.”

The outlook for B.C.’s truck logging industry, however, is for cutthroat competition and a bone-rattling shakedown, according to Roy Nagel, the general manager of the Central Interior Logging Association. “Now a truck company can move unfettered from one region to another. On the plus side, if you are an aggressive trucking contractor, you can bid in another area. If there is a crush on, there may be plenty of work.

“The down side of it is that truckers in the former districts can face competition from other regions and get into bidding wars.”

Deregulation came at a bad time for log haulers. When stumpage rates for the last quarter of 1999 went up by $5 a cubic metre, there was little logging. The hope was that stumpage rates would fall in the following quarter. But there was almost no hauling.

“A lot of truckers packed it in,” says Nagel, “… a lot of owner/operators have faded from the scene in the last six months.

“For the larger contractor getting rid of the charges for extra permits, his costs may have decreased. For the smaller contractor, deregulation is more a threat than an opportunity. It is a way of life that is going to fade.

“A lot of owner/operators will have real difficulties over the next two to three years.” n

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