The issue of chameleon carriers is a persistent and significant problem in Canada’s transportation industry. These carriers circumvent safety regulations and penalties by closing and reopening under new names, posing risks to road safety, drivers, and the public. Despite ongoing discussions among industry stakeholders and government bodies, there remains a lack of decisive action to tackle this problem, exacerbating challenges for road safety and fair competition.
What is a Chameleon Carrier?
According to the CVSA Inspection Bulletin 2021-03, a chameleon carrier refers to a company that shuts down and reopens under a different name or registration number (USDOT/NSC/CVOR/NIR) to avoid penalties, fines, or enforcement actions. This illegal practice undermines regulatory efforts and allows dangerous carriers to continue operations. Chameleon carriers often hide ownership by registering the business under the names of family members or using complex shareholder structures. Although this makes it difficult to trace, it is not impossible if regulators have the political will to act. Chohan for example stated in the news that the new company in Alberta was owned by the same family as the BC company that was booted out of BC for hitting too many bridges and a house. This highlights the problem of weak government oversight, allowing repeat offenders to re-enter the market under a different guise.
Regulatory Gaps in Canada
Unlike the United States, where the FMCSA (Federal Motor Carrier Safety Administration) uses a unified registration system to identify and shut down chameleon carriers, Canada lacks a national system. Each province and territory handles the safety and monitoring of commercial carriers within its jurisdiction through the Safety Fitness Certificate (SFC) system. Although the National Safety Code (NSC) standard 7 requires provinces, territories, and North American neighbors to share enforcement data, significant gaps remain in enforcement and coordination.
In Alberta, the carrier profile system is flawed and the Third-Party Auditor (TPA) program, which is meant to ensure compliance, is ineffective, see my blog Don’t Look Behind the Curtain, Unveiling the Alberta Transportation Safety Scam. This lack of comprehensive monitoring and enforcement allows chameleon carriers to operate undetected, as no one is thoroughly overseeing their activities. As a result, public safety is compromised, and responsible carriers face higher insurance premiums.
Limited Reforms Post-Humboldt
Following the tragic Humboldt Broncos bus crash, changes were made to driver training and new carrier entry rules. However, these reforms did not address the chameleon carrier crisis. In Alberta, for instance, when a company applies for an SFC, there is a checkbox asking if they previously held an SFC in another province and were deemed unsatisfactory. Yet, the penalty for providing false information is only $1,000—an insufficient deterrent.
The regulations permit the Registrar to cancel an SFC for false information, but enforcement is lacking, and there is no political will to take necessary action.
Strengthening Enforcement and Collaboration
To address the chameleon carrier issue, Alberta needs to enhance its enforcement mechanisms. The International Registration Plan (IRP) requirement for an “Established Place of Business” could be a vital tool for identifying chameleon carriers. The IRP mandates that carriers maintain a physical structure within Alberta, staffed during business hours. This could serve as an additional layer of verification to ensure that rogue operators cannot easily hide or relocate.
Collaboration between regulatory bodies like Alberta TEC and Alberta Prorate is essential to cracking down on chameleon carriers. By working together, these organizations could create programs, potentially secure funding, and demonstrate the political commitment needed to clean up the industry.
Conclusion: Urgency for Reform
The ongoing problem of chameleon carriers demands comprehensive regulatory reform and robust enforcement. The current lack of coordination and weak oversight allows these carriers to endanger public safety, harm the livelihoods of drivers, and skew competition within the transportation industry. It's time to restore trust and integrity to the Canadian transport network. Canada does not need a federal transportation program to replace the existing jurisdictional model. The jurisdictions just need to do their jobs, fix the Carrier Profile system and start communicating and collaborating.
At the end of September, The Vancouver Sun highlighted the issue of emissions from heavy and medium-duty trucks in British Columbia, drawing attention to the problem of operators tampering with emission controls using "delete kits." These kits essentially disable emission-reducing technologies in trucks, leading to higher levels of harmful emissions. While Metro Vancouver is poised to present a report on this to a climate committee, this issue has been prevalent for years across Canada. Ontario, for example, has been grappling with delete kits for over six years now.
Metro Vancouver has outlined three potential solutions to decarbonizing the trucking industry:
I hate to state the obvious but, 2019 called, they want their problem back! Delete kits have been an issue for a long time. Maybe it takes a few years for problems to migrate from Ontario to British Columbia. Metro Vancouver could have saved themselves some time and energy and just read all the information Ontario has been publishing for the last 6 years.
These are all important goals, and the industry has been working on these solutions for some time. But, in reality, the immediate challenge lies in the interim period. The reason delete kits are so common is simple: emission systems in older trucks, particularly from the early 2000s, are unreliable. Trucking companies can't afford the downtime caused by malfunctioning emission systems, so many take a "fix it or fuck it" approach, opting for delete kits to keep trucks running.
A significant barrier to addressing delete kits is the lack of consistent enforcement and inspection criteria across Canada. While some jurisdictions have made strides in identifying tampered vehicles, roadside inspectors and repair technicians lack Canada-wide guidelines. For instance, in April 2023, British Columbia raised this issue with the Commercial Vehicle Safety Alliance (CVSA), asking that emission controls be added to Level 1 inspections. This is what was decided: Canada has a regulation in NSC 11B that the exhaust cannot be tampered with. Discussion about how enforcement can determine this roadside, such as with glider kits. Enforcement may not be able to identify which parts, if any, are missing from the system without proper training, however, in some jurisdictions in Canada, roadside inspectors are trained to detect delete kits/tampering, etc. This is like a shock absorber which is a violation in Canada but not in the US. There is no regulatory section in Part 393 that would allow the inspection and a violation to be written regarding the emission system. The consensus is we leave it alone in the United States, unless a state law addresses it. Canada may address it through relevant laws and it would be a critical inspection item under Exhaust (therefore, the vehicle, in Canada, would not obtain a CVSA decal if a violation of the emissions system was present in Canada). In no case, would this be an OOSC condition. There is no uniform agreement across North America.
In Alberta, the Commercial Vehicle Inspection Manual (CVIP) still exempts emissions controls from inspections until future regulations are introduced. This leaves many sections of the 2014 NSC 11B, particularly those related to diesel exhaust fluid (DEF) systems, unenforceable. Ontario, on the other hand, has specific inspection criteria and penalties in place, making it the only province that actively enforces regulations on delete kits.
Ultimately, as provinces like British Columbia and Alberta lag in enforcement, the trucking industry is evolving. By the time regulatory amendments are made, manufacturers may have resolved emission control issues, or trucks may have switched to alternative fuels entirely. Until then, the enforcement of delete kits remains inconsistent, with Ontario leading the charge while other provinces struggle to keep up. If a truck fails a level 1 CVSA inspection anywhere but, Ontario I would ask to see the inspection criteria used to determine the truck was deleted.
The real question is, in the time it takes for studies and regulatory changes to occur, how much further will the industry progress, and how much will the problem of delete kits still matter?
This is a quote from the Transportation and Economic Corridors Annual Report 2022-2023, “Innovation is core to TEC’s mandate. In 2022 ‑ 23, TEC delivered on a range of cutting-edge initiatives.” Cutting edge initiatives and you have professional auditors doing data entry because the computer system doesn’t accept time to the second? Really?
Why is Alberta Transportation paying professional auditors to do hours of manual data entry? I can tell you why!
Professional auditors, who command professional wages due to their extensive experience and education, are currently dedicating hours and hours to manual data entry tasks, highlighting the inefficiency of the current process.
The current system ARC (assessment of regulatory compliance) is designed to accept time entries only in 15 minute increments of an hour (8.25, 8.50, 8.75), which is completely unfeasible and inefficient process in 2024. ELDs (Electronic Logging Devices) record a driver's time in real-time by the second using data from the truck engine (ECM). Auditors are required to look up converted time information from a paper chart and then enter the data into ARC. In 2024 there exists a more advanced and streamlined solution that should be implemented.
During hours of service reviews, a 30-day sample of drivers RODS (Record of Duty Status) is reviewed and recorded. However, the existing computer program, ARC (Assessment of Regulatory Compliance) was not created to handle time by the second. The ARC system requires auditors to refer to a Conversion Chart in the ARC help manual to translate minutes into the appropriate decimal value for data entry. This cumbersome process not only consumes investigative resources but also contradicts the efficiency goals that technology is meant to enable.
Below is taken from the ARC help manual used by Investigator’s and Third Party Auditors (TPA).
All “Hours” fields in the New ARC take time in decimals of an hour only. For proper calculations please ensure the appropriate decimal of an hour is entered in New ARC.
Conversion Chart
Find the minutes you need to enter under the “Minutes” column and beside it in the right side column is the appropriate decimal conversion. Add this decimal conversion to the total full hours and you will have the appropriate time in decimals of an hour to enter in your field.
Consider this - a standard 5-driver audit sample can lead to 450–900 minutes or 7.5–15 hours simply being spent on manual data entry. These 7.5 – 15 hours represents just entering time, if a violation is detected a descriptive narrative of the violation is also required. If every calendar day has a violation, which happens all the time, that is a significant waste of resources. ELD systems generate a CSV files in Excel format that contain all the relevant information needed by Investigators and Third Party Auditors.
It is evident that there is a clear need to modernize and integrate ELD systems into the audit process to streamline operations, improve accuracy, and save valuable time and resources. By transitioning to a more technology-driven approach, the Transportation and Economic Corridors sector can enhance efficiency, reduce errors, and ultimately improve overall regulatory compliance.
Transportation and Economic Corridors could have been a leader in technology based solutions but, shortsightedness in leadership will keep Alberta auditors using a abacus. It is crucial that leadership drive progress and innovation within critical sectors like transportation auditing.
Ensuring that motor carriers have appropriate safety ratings is a crucial responsibility of regulatory authorities overseeing transportation. The presence of unsafe and unfit carriers on the road poses significant risk, not only to the drivers and personnel directly involved, but also to the general public. The consequences of accidents involving such carriers can be severe, leading to injuries, loss of lives, property damage, and environmental hazards.
There is a real and probable risk that federally regulated Alberta carriers have been upgraded to a Satisfactory or Excellent safety ratings using unreliable audit scores. The Province has been made aware of this, yet has taken no action to correct it, putting the Province at serious risk of liability.
The Alberta government is permitting private third-party auditors (TPAs) to use encrypted Record of Duty Status (RODS) for conducting NSC Standard 15 Audits. There are concerns about the validity of the audit results because encrypted data was used to conduct the audit. The specific concern is that encrypted RODS may lead to inaccurate and unreliable hours of service scores, which significantly contribute to the overall audit score, potentially rendering the entire audit ineffective.
Any federally regulated carriers in Alberta that have undergone an NSC Standard 15 audit by a TPA since January 1, 2023, should have their audit fees refunded, administrative penalties and conditions repealed, and their safety rating rescinded to preaudit status.
In 2021, Transport Canada updated the Federal Commercial Vehicle Drivers Hours of Service Regulations (SOR/2005-313) to include Electronic Logging Devices (ELDs), (Section 77), and also refers to the Technical Standard, developed by the CCMTA. All certified ELD devices must meet the Technical Standard.
The Technical Standard requires all ELD systems to generate standardized ELD output file (CSV and PDF) and transfer those record of duty status (RODS) to an authorized safety official upon request (System Design 1.4 d). The Technical Standard specifies the minimum data required to be included on the standard ELD output file (CSV and PDF) (System Design 1.4 e). For a TPA to audit RODS that fully meet the Technical Standard, the RODS must be sent via one of the transfer methods specified, and in the manner specified in Technical Standard 4.8.2 ELD Output File. Data must be transmitted via:
Transport Canada compiled a list of email addresses for inspectors authorized to have PKI encryption keys. PKI is an acronym for public key infrastructure, which is the technology behind digital certificates. A digital certificate fulfills a similar purpose to a driver’s license or a passport – it is a piece of identification that proves your identity and provides certain allowances.
When a government safety official receives the RODS from a trucking company, the RODS are unencrypted, via PKI, because government enforcement officials have the encryption key. TPAs do not, because they are not designated as inspectors. This is a critical gap in the auditing process when a trucking company transmits encrypted Record of Duty Status (RODS) to a government-certified TPA. The TPA cannot access all the required data for a comprehensive audit.
TPAs do not have encryption keys primarily to protect driver privacy during periods of personal conveyance. Driver privacy is paramount and there is a Technical Standard specific to that end (Technical Standard 4.7.3 Privacy Preserving Provision for use during personal uses of a CMV).
To compound the issue, TPAs are not required to retain the RODS reviewed in an audit, therefore previous audits cannot be reviewed to ensure correct RODS were used.
Both of these factors raise significant concerns about the transparency and accountability of Third-Party Auditors (TPAs) in the auditing process, particularly regarding the handling and verification of unencrypted Record of Duty Status (RODS) data. If there is no mechanism to confirm whether TPAs are using unencrypted data and no requirement for them to submit evidence for retention, it creates a potential vulnerability in the accuracy and reliability of audits.
Private industry is aware of the problem to some degree. Private Motor Truck Council of Canada (PMTC) president Mike Millian said in a 2022 press release:
“We are also waiting for a PKI vendor and system to be announced by Transport Canada that allows for ELD data to be transferred securely from the device to enforcement personnel, as well as enforcement protocols, training, and how the regulation will be enforced uniformly between jurisdictions.”
In June 2022, the CTA (Canadian Transportation Association) released information via email regarding the PKI system:
“Encryption of Record of Duty Status Email Files
The process for establishing the encryption of records of duty status (known as PKI) for email transfer to Roadside officials is the responsibility of Transport Canada. The process for implementing the Transport Canada work is the responsibility of each provincial and territorial jurisdiction, which includes submitting email addresses of enforcement officials who will be engaged in hours-of-service enforcement. The requirements and format for ELDs to produce the encrypted record of duty status are contained in the ELD technical standard, which is the result of a collaborative effort between Transport Canada, representatives from all provincial and territorial governments and ELD vendors. Devices certified through the Transport Canada and Standards Council of Canada process will meet the required format for record of duty status.”
As of January 1, 2023, NSC Audits conducted by Third Party Auditors in Alberta can not be considered accurate to a threshold that can be used to assess carrier safety risk.
There is no way to confirm the RODS used by a third party auditor were unencrypted because unlike the government auditors, TPAs are not required to submit the evidence reviewed for retention in the TSIS system. If you compare this to evidence used in criminal matters, if evidence is considered suspect or deficient, it cannot be used to convict. If the RODS used in a Third Party Auditor audit are suspect or deficient, the information cannot be used to assess an administrative penalty, condition or SFC rating.
Recommendations
There are two possible resolutions to the issues at hand.
Recommendation 1
A simple three-part solution exists to mitigate and correct the issues at hand.
Recommendation 2
Designate government-certified TPAs as “inspectors” which would enable them to access the PKI encryption key required to access full and correct ELD RODS datasets. The Federal Commercial Vehicle Drivers Hours of Service Regulations (SOR/2005-313) defines an
inspector as:
(a) a person designated under subsection 3(2); or
(b) a peace officer within the meaning of section 2 of the Criminal Code.
Section 3(2) of the same regulations notes that:
(2) A director may designate inspectors for the purposes of these Regulations.
References
