CBSA eliminates unfair tariff for Canadian carriers

by Canadian Shipper

OTTAWA, Ont. — The Canadian Trucking Alliance is breathing a sigh of relief as it welcomes an announcement from the Canada Border Services Agency (CBSA) eliminating a controversial tariff.

Tariff Item 9801.10 prevented Canadian carriers from bringing US trucks or trailers used strictly in cross-border operations into Canada without first attracting duty and taxes on that equipment. It was a practice the CTA deemed arcane.

The lobby group has been appealing CBSA to scrap the tariff since it first became aware of the rule in 2004. Recently, some western Canadian carriers have faced a crackdown by CBSA that would have seen them face enormous costs, the CTA says.

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

CBSA responded to CTAs lobbying by admitting: 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 are very pleased that the federal government has taken this action and is addressing an obvious flaw in the governance of transborder trucking, says CTA CEO, David Bradley. We have known about this problem for some time. But, its sporadic enforcement suggests most within CBSA probably didnt 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. CBSA, and ultimately the Department of Finance, have done the right thing in this case.

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