OTTAWA — The Canadian Trucking Alliance welcoming an announcement from the Canada Border Services Agency (CBSA) that the federal government will seek legislation to amend a little known tariff provision (Tariff Item 9801.10) that places Canadian motor carriers at a competitive disadvantage compared to U.S. carriers.

In the meantime, the CBSA says that it will suspend enforcement of the provision so that in the words of the agency’s director general, “Canadian carriers will no longer be faced with these concerns.”

Under what the CTA calls “arcane provisions” of Tariff Item 9801.10, Canadian carriers were prevented from bringing U.S. trucks or trailers used strictly in cross-border operations into this country without attracting duty and taxes on that equipment — a common practice in the industry for decades.

CTA first became aware of the issue in 2004, but more recently was told that some Western Canadian carriers were being warned by CBSA inspectors to stop the practice or face huge costs.

“Widespread enforcement of the provision could have forced Canadian carriers to either turn over parts of their business to U.S. carriers, or put in place costly administrative processes to pay GST on that foreign equipment,” CTA notes in a press release. “U.S. carriers face no such restrictions on moves into Canada and in fact, the U.S. customs regulations allow transportation equipment engaged in international commerce to cross the border freely without regard to the country of domicile.”

CTA argued with success that the tariff regulations put in place to support NAFTA in the mid-1990’s were rushed and seriously flawed, and that this provision was one of the unfortunate consequences. According to CBSA, “it has recently been concluded that the domicile and control conditions, which appear in the current tariff item 9801.10.00 should not apply as they have made the tariff item more restrictive than was intended.”

“We have known about this problem for some time. But, its sporadic enforcement suggests most within CBSA probably didn’t even know it existed, which made it difficult for CTA to attract attention to what was a ticking time-bomb for the Canadian trucking industry,” says CTA CEO David Bradley.