CTA urges provinces to reduce trade barriers

OTTAWA — After agreeing to improve trade with each other nearly a year ago, Canada’s provinces are being urged to make good on the promise and provide some results by the Canadian Trucking Alliance.

Last August, Canada’s premiers decided they were moving forward with plans to strengthen domestic trade between provinces and territories by reducing barriers to trade flows. A key part of the announcement was an agreement to harmonize transportation regulatory codes and eliminate standards and regulations that are unjustifiable barriers to trade in the transportation sector. The premiers instructed ministers responsible to do this work by July 2008.

CTA has long argued that because trucking is primarily regulated by the provinces, the industry is subject to a patchwork quilt of provincial regulations and standards. And, with the July deadline fast approaching, CTA is keen to see some progress and has written to the Council of the Federation (whose membership is made up of the provincial premiers).

“We are under no illusions as to the difficulties associated with this task,” says David Bradley, CEO of the CTA. “But we must move forward to ensure that Canada has the efficient, productive, reliable and predictable supply chain it needs to compete and win now and in the future.”

For starters, the alliance is not sure whether the hodge-podge of trucking regulations meets governments’ definition of a “trade barrier.” The directive given by the premiers to the ministers responsible for transportation regulation adds the proviso: action only be taken on those regulations and standards that are “unjustifiable” barriers to trade. Regardless, CTA says the differences in regulations that truckers must contend with as they travel across the country can create artificial competitive imbalances.

CTA says the lack of harmonization in trucking regulations is most harmful in three key areas: the National Safety Code, truck weights and dimensions, and taxes.

The National Safety Code (NSC) for Trucks, which was introduced 20 years ago, contains 16 national standards – everything from truck driver hours of service, to carrier safety ratings, to driver medicals, to trip inspections. However, after two decades, not one of the NSC standards has been uniformly adopted and/or enforced by the provincial governments, notes the CTA. The alliance believes it’s time for a new system in developing national standards and ensuring provinces adhere to the developed national standards.

Current heavy truck standards are based out of a set of minimum standards developed in the mid-1980s and contained in a national MOU in February 1988. At the very least, a vehicle that meets the minimum MOU requirements can operate from coast-to-coast, while provinces retain the authority to allow other truck configurations in their jurisdictions if they wish. CTA says that on balance this has been positive for industry productivity, but it has also created differences between jurisdictions and at times carriers may view these differences as barriers to trade or at the very least add to the complexity of spec’ing a fleet.

Finally, CTA argues that interprovincial carriers face a plethora of provincial regimes for taxing business inputs when they invest in new tractors and trailers. Depending on where a trucking company is located and where its trucks go, their equipment can be slapped with an array of provincial levies – provincial retail sales taxes, harmonized sales taxes and Multi-Jurisdictional Vehicle Taxes (MJVT). The CTA says, the regressive nature of business input taxation and the costs of administering all the separate systems, impact directly on a Canadian carriers’ ability to compete and act as disincentives to investment in new equipment.

Bradley says he hopes there will be progress on modernizing some of the rules that govern the industry, but he says, “it will take the political commitment of the premiers, the development of new models for consensus building and decision-making, and a re-energizing of existing ones.”

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