TORONTO, Ont. – Canada’s trailer manufactures are facing increasing competitive pressure from suppliers in the U.S., Mexico and China – but it’s still unknown whether they’ll face unique emissions rules as well.

Ongoing federal research into the use of fuel-saving devices is also focusing specifically on California, known for some of the toughest emissions standards in North America.

Trailer-related greenhouse gas (GHG) requirements have twice been delayed over concerns it would create a double standard for U.S. and Canadian markets.

“There’s a competitive issue if the United States is not introducing trailer standards and we are,” Environment and Climate Change Canada economist Jennifer Johnston said Wednesday, during a presentation for the Canadian Transportation Equipment Association (CTEA).

The latest pause in Canadian limits is in place until May 18, 2021, but if enacted they would see broad requirements for changes including aerodynamic enhancements, lighter components, low rolling resistance tires, automatic tire inflation systems, and tire pressure monitoring systems.

This would be the first time trailers were included in emissions standards.

Canada accounted for 7.7 million trailers in 2018, although just 7% of those would be subject to the regulations, said Rime Hammoud, a project manager with Environment and Climate Change Canada.

The rules themselves were originally developed in the U.S., but put on hold in the face of a court challenge by the Truck Trailer Manufacturers Association (TTMA), which has argued that the U.S. Environmental protection Agency doesn’t have the authority to regulate trailers. The court heard oral arguments as recently as September.

Looking to California

Federal officials on the video call would not say whether Canada would move ahead with the trailer-related GHG rules without a similar move by the U.S.

In the meantime, an ongoing federal review of the trailer market will also include Pembina Institute research into the uptake of fuel-efficient trailer equipment, with a particular focus on Canada and California – the latter of which represents some of the toughest emissions-related standards in North America. That research will be commissioned in coming months.

Heavy-duty vehicles account for 31% of Canada’s transportation-related GHG emissions, with levels that have tripled since the 1990s. By 2030, the heavy-duty emissions are also projected to surpass light-duty vehicles, according to findings from the National Inventory Report. Transportation accounts for 29% of the nation’s GHG emissions as a whole.

“The trailer standards cover most trailers designed to carry cargo and be pulled by a tractor when coupled to a tractor’s fifth wheel,” Hammoud said.

Canada’s trailer market

The nation’s 28 trailer manufacturers also face a changing competitive landscape for the business.

“There’s been increasing competition with the U.S. and Mexico and China for the market share in trailers,” Johnston said.

The Canadian market is importing more box van trailers from China, while the U.S. is importing more trailers from Mexico.

The vast majority (92%) of trailers imported into Canada come from the U.S., with 4% from China and 4% from other jurisdictions. That’s not unlike the export market for Canadian manufacturers, with 90% going to the U.S., 1% to the U.K., and 9% to other markets, according to Statistics Canada data.

Canada accounts for 13% of the trailers imported into the U.S. market, but 40% of the southern market’s trailers come from China and 38% come from Mexico. Other jurisdictions account for the rest. Of the trailers exported from the U.S., 66% come to Canada, while 16% go to Mexico, 1% to China, and 17% to other jurisdictions.

Canada’s trailer manufacturers tend to be more customized relative to the U.S. and China, focusing on specialized markets like forestry, oil and gas.

The fuel-efficient devices needed to meet tougher GHG standards are largely sourced from the U.S. and on the market today.

“The supply is steady,” Johnston said. Much of the technology has also been available for a decade or so.

While trailer demand peaked last year, when compared to the previous five years, sales have been declining this year due to factors such as the economic downturn associated with Covid-19.

“We’re still going to look at it more deeply in the coming year,” Johnston said.