Ontario brokers still required to post funds in trust

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TORONTO, Ont. — Ontario’s Truck Transportation Act (TTA) will be history as of Jan. 1, 2006 but some rules within the old Act – such as a broker’s trust account requirement – will remain.

Critical parts of the TTA are being shifted to the Highway Traffic Act. These include a broker’s requirement to retain carrier funds received from the consignor or consignee in a trust account.

“It is the strongly-held view of OTA that this provision is and remains necessary,” said OTA president, David Bradley. “In a recent decision, the Ontario Court of Appeal, in the GMAC Commercial Credit Canada v. TCT Logistics Inc. case, which dealt with the issue of priorities under the Bankruptcy and Insolvency Act, demonstrated that the existence of such a trust account provision remains a crucial element in protecting the ability of carriers to ensure that they are paid for their services in the event of bankruptcy by the broker. Without the trust account provisions, carriers would have a much harder time being paid for work that had been done.”

The OTA says it is largely responsible for the province retaining the trust account provisions of the TTA.

“We fought hard to ensure that this provision was retained in order to protect the rights of carriers, and I’m extremely pleased that at the end of the day we were successful in having this section transferred to the HTA,” Bradley added.

The OTA is also warning carriers that broker freight that the trust account provisions will now apply to everyone who brokers freight, including carriers that broker loads to other carriers. As of Jan. 1, these carriers will need to ensure that funds received for work that is brokered out are placed in a trust account.

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