What the new Entry Exit Initiative means to drivers

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TORONTO, Ont. – A new information-sharing agreement between the US and Canada has had commercial truck drivers and others who regularly cross the border for extended periods of time on edge after a B.C. MP warned them about significant consequences.

In an article published by CBC News, consequences for overstaying your visit (which an assistant for the B.C. MP says is actually 120 days, not 182 days,  as most people think it is) include being considered a US resident for tax purposes and having to pay taxes on worldwide income; losing your Canadian residency and health care; and being deemed an illegal resident in the US and being banned from the country for three to 10 years.

To help the government track how many days Canadians stay in the US, the new Entry Exit Initiative was launched. Before this initiative, they could only track entry dates, not exit dates.

Though the consequences of overstaying your visit seem severe, Jennifer Fox, vice-president, trade and security for the Ontario Trucking Association and Canadian Trucking Alliance, said commercial drivers have nothing to worry about.

“We’ve been getting a lot of inquiries on this initiative since the article came out over the weekend,” she said. “Up until now, Entry Exit and the information sharing only applied to third party nationals and permanent residents. As it stands today, the Canadian Government doesn’t have the authority to require or obtain Entry Exit information from Canadian citizens. So when we are asked about the impact to commercial drivers, first of all there’s no impact moving to Canadian citizens at this time…That being said, the rules about taxation and OHIP and the rules with respect to US taxation, none of that changes under the Entry Exit Initiative.”

Fox stressed that the initiative is solely for the purpose of collecting information.

“The Entry Exit Initiative is just going to allow the Government of Canada to collect the information and to share it with the US,” she said. “I understand that there is a lot of concerns around that, like privacy issues, but it doesn’t change what your obligation is as commercial driver is to report for your time in the US if you exceed what’s allowable. And it doesn’t change if you’re applying for tax credits here in Canada your ability to do that. If you qualify for tax credits today then you should still be able to in the future.”

She also noted that the initiative was put in place not to affect the daily lives of those people who travel often to the US for legitimate purposes like work, rather it is aimed as an anti-terrorism tactic.

“It’s a good thing,” she said. “We just have to make sure there is no unintended consequences as a result of that. And I think that both governments would be in the position to say you know, to sit with stakeholders and to say that’s not the intent…and just to make sure that we’re looking at what policies need to be in place to handle any negative implication there could be for people who’s work causes them to be in the US for extended periods of time and its not just commercial drivers, it’s airline crew as well. Again those laws around taxation and citizenship, they’re not changing. We just have to make sure that’s the message that’s getting out.”

The main takeaway drivers can get from this new initiative, said Fox, is that it is “geared towards high-risk individuals. I want to caution the industry not to get too carried away and too worried. If they should be filing tax documents right now because of the time they spend in the US, then that doesn’t change. If they should be doing it today and they should be doing it tomorrow.”

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Sonia Straface is the associate editor of Truck News and Truck West magazines. She graduated from Ryerson University's journalism program in 2013 and enjoys writing about health and wellness and HR issues surrounding the transportation industry. Follow her on Twitter: @SoniaStraface.

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  • And people wonder why there is a shortage of truck drivers.?Every week a new regulation or rule to figure out there seems to be no privacy left all in the name of “security” yet we are less secure now then we have ever been.

  • Excuse my ignorance, but does this not mean that a Canadian long-haul driver could exceed the allowable time under US law and find themselves in a taxable situation for US tax purposes? I have been aware of the restrictions for snow birds … for many years, but never looked at it from a commercial driver’s position.

    I’m taking a shot in the dark here, but I am quite confident that many Canadian carriers and most Canadian commercial drivers are unaware that these same restrictions affect them. As an example, if these laws do, a commercial carrier from Calgary AB with regular runs to and from Los Angeles CA could easily violate the 120 day limitation (refer to original CBC link for actual time calculation)! Remember, these same drivers sometimes vacation in the US! Are carriers tracking that too???

    Downplaying the significance of the entry exit initiative should not occur until carriers and drivers have actually completed an impact assessment. Carriers and drivers will require some education about the actual and true effects before a proper impact assessment can be completed.

  • The length of stay limitation of 120 days is the total period spent in the U.S.A in any calendar year, regardless of the number of entries and exits, averaged over three years. The previous year’s total stay is divided by 3; the total of the year before that is divided by 6. These three numbers, this year + last year / 3 + the year before / 6, are all added together and the total is itself divided by 3. If the result is greater than 120 then you have to either fill out a special exception request form or deal with the U.S. tax consequences.

    So, if in 2013 I visited the U.S.A. for a total of 90 days in say four separate visits; and in 2014 I stayed a total of 60 days in twelve visits then the contribution of those two years to the weighted average of this year is 90/6=15 + 60/3 = 20; or 35 days in total. That means that in 2015 I can only visit the U.S.A for 95 days before triggering the taxation rule. Unless I have filled out the Closer Connection Exception Statement form in which case I can stay 182 – 35 or 147 days. However, if I stay the full 147 days this year then next year my limit will be 182 – 60/6 – 147/3 = 182 – 59 = 123 days.

    So, long haul truckers are probably in a somewhat tender situation. Assuming one stays the same number of days in each year over the the three year averaging period then one can only stay for a maximum of 78-79 days (78 + 78/3 + 78/6) = 78 + 26 + 13 = 117 in any one year. I do not think that one gets to conserve fractions of days but you could probably stay 79 days in two out of the three years and still stay within limits. Or, if they had filled the Closer Connection exception (182 days) then they could stay 120 days every year (120 + 120/3 + 120/6 = 180) and extra day in two out of three years.

    Note, this is only for the U.S. regulatory side . I cannot speak to what OHIP or any other provincial health care program does

  • Not trying to open up a can of worms here (sorry it’s already open!), but I bet there aren’t 10% (I’m being liberal) of carriers that request a copy of the driver’s Closer Connection Exception Statement form when considering driver availability for US service! Unless there is a little known exemption for commercial drivers, then carriers and their representatives (OTA), better educate themselves and get lobbying real quick! At the very least, both parties owe it to commercial drivers AND the Canadian economy! Or you can implement the entry exit initiative and let the chips fall where they may!