The Canada Border Services Agency has issued a new Customs Notice on the point-to-point movement of domestic freight in Canada by tractor-trailers owned by foreign-based motor carriers, commonly referred to as cabotage.


Both Canada and the United States have nearly identical cabotage rules and only permit such movements in very narrowly defined circumstances. Customs Notice 11-014, available here, was issued on August 25.

The notice does not signal a change in the rules, which have been in place for well over a decade and were the product of joint discussions between the Canadian and U.S. governments and their respective trucking industries. However, the notice is a reminder of what the rules are and perhaps signals that CBSA will be paying closer attention to the activities of foreign carrier operations in Canada.

The Agency has indicated it will conduct post-release compliance verifications and issue sanctions against violators. It has been a long-standing belief by many Canadian carriers that enforcement of the cabotage rules by government agencies has been far more aggressive in the United States than it has been in Canada.

Publication of the notice was welcomed by the Canadian Trucking Alliance.

"The rules are, quite frankly, very complicated, on both sides of the border, so whatever can be done to improve the level of understanding about them is a step in the right direction," said Canadian Trucking Alliance President David Bradley. "It is also extremely important that there be a level playing field for carriers based in both the United States and Canada and that is only achievable if everyone plays by the rules."

However, Bradley was quick to point out that CTA is of the view that there is a need for a joint approach to modernizing the cabotage rules in both countries. Bradley indicated that he hopes that President Obama's focus on increasing U.S. exports, the current round of Canada-U.S. negotiations on a perimeter security agreement, and greater regulatory harmonization might get the ball rolling.

The rules governing trucking cabotage are set out in federal legislation known as the Customs Tariff, under which the domestic movement of goods by foreign trucking equipment is generally forbidden, except when the move is "incidental to the international traffic of the imported or exported goods." Customs Notice 11-014 clarifies the meaning of "incidental" as follows:

* Only one incidental (domestic) move is permitted per international trip.

* The move must follow a route consistent with the international route of the imported or exported goods.

* Domestic goods can be carried as part of a re-positioning move, but only if the vehicle is en route to pick up a scheduled load for export from Canada, and the drop off point of the goods is in a direct line to the pick-up of the export load.

It is also important to understand that the clarification issued by CBSA only covers trucking equipment. Foreign drivers, who fall under the authority of Citizenship and Immigration Canada, are forbidden from making point-to-point domestic moves unless they have a temporary work permit.