Truck Transportation Act Soon Repealed: Changes to trust accounts, broker rules, and safety rating included

TORONTO — The Ontario Government has announced that effective January 1, 2006, the Truck Transportation Act (TTA) and the last vestiges of economic regulation of the trucking industry will no longer exist.

However, as the Ontario Trucking Association is reminding carriers, under the legislation repealing the TTA certain critical parts of the TTA have been transferred to the Highway Traffic Act (HTA).

The repeal of the TTA on January 1 meets the federal Motor Vehicle Transport Act (MVTA), which establishes a national system based on carrier safety fitness. It will eliminate the carrier operating licence requirement, and the safety based Commercial Vehicle Operator’s Registration (CVOR) system will be the only operating certificate required for trucking companies based in Ontario.

Carriers from other provincial jurisdictions must now hold an equivalent certificate issued by their home jurisdiction and based on safety data collected by that jurisdiction.

The OTA won a hard-fought victory with new carrier-friendly
cargo insurance and contract of carriage provisions

With respect to the trust fund requirements in the load broker regulations, the repeal of the TTA eliminates all of the regulations applicable to load broker activities, save for the provision that requires load brokers retain carrier funds received from the consignor or consignee in a trust account.

Other aspects transferred to the HTA include the cargo insurance and contract of carriage provisions.

The transfer of the trust account provisions to the HTA was a direct result of intense lobbying by the Ontario Trucking Association.

“It is the strongly-held view of OTA that this provision is and remains necessary,” said OTA President David Bradley.

Bradley cited 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. Bradley says the case 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,” Bradley said. “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.”

Carriers who broker freight should also note that the trust account provisions will now apply to everyone who brokers freight, including carriers who broker loads to other carriers, OTA says. Also, effective January 1, 2006, they will also need to comply with the new HTA provisions and ensure that funds received for work that is brokered out are placed in a trust account.

Implementation of these provisions was delayed in order to co-ordinate their coming into effect with the proclamation of the federal MVTA amendments. With the MVTA amendments coming into effect on January 1, 2006, the Ontario government is also making the repeal of the TTA effective on that date as well.

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