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.

The Government of Alberta announced changes to the MELT Class 1 Mandatory Entry Level Training program, turning the program into an apprenticeship model. These changes are urgently needed today but, it will take time to launch the program and is expected March 1, 2025. Currently MELT drivers pay upwards of $10,000.00 to obtain a Class 1 drivers licence and then most can’t find a job because insurance companies require two years of over the road experience. This apprentice model should fulfill the insurance company requirements and hopefully open federal funding for new students.

All of this is great stuff but, the reality is Alberta will produce quality, well trained drivers and put them to work in an industry that is a disaster. It is like raising Kobe beef only to sell it to Burger King. If commercial driving is going to be a trade, then it is time to hold the road transportation industry to that trade standard.

Transport Canada and the provinces and territories need to take a hard look at the road transportation sector and make some changes. There is zero accountability for trucking companies that utilize questionable practices like Driver Inc to circumvent taxes, immigration and human rights regulations. Driver Inc is a model based on commercial drivers, who do not own/lease or operate their own vehicle. These drivers are becoming incorporated and not paying source deduction like income taxes or Employment Insurance. The prevalence of chameleon carriers operating across Canada highlights the need for greater oversight and enforcement measures. A chameleon carrier is a trucking company that, if cited or closed down for a marginal safety record, quickly changes its name and address and restarts operations.

Chameleon carriers operate unchallenged across Canada, in Alberta the penalty for lying on a Safety Fitness application to fraudulently obtain a Safety Fitness Certificate is $1000.00 and the company is allowed to keep operating. To compare, also in Alberta, the penalty for not stopping for an invasive species boat inspection is $4200.00. Why does Alberta Transportation and Economic Corridors (TEC) not take road safety as serious as Alberta Environment takes protecting our lakes?

Alberta does not have accurate enforcement information from all jurisdictions, see my blog, Don’t look behind the curtain! unveiling the Alberta Transportation safety scam. Unless the provincial jurisdictions specifically contact each other about unsafe carriers potentially moving into other jurisdictions, a tragedy is usually the first notification. There is not a central transportation regulatory body in Canada that collects safety data as there is in the United States, the broken carrier profile system all we have in Alberta.

These sketchy chameleon carriers also can be self-insured. Because of this they can cause mayhem, then go bankrupt and start over with zero consequence. Trucking company insurance minimum requirement in Alberta is $10 million dollars. How much do you think a bridge or infrastructure strike costs to repair? British Columbia recently substantially increased the fines and jail time for drivers that hit structures. What about the trucking company that employs the driver? It may be the driver’s fault but, it is the carrier’s responsibility.

The lack of support systems for both rookie and experienced drivers exposes them to exploitation and mistreatment within the industry. Drivers have zero complaint options, even after being abused, unpaid, disrespected, forcibly dispatched and worse. Complaint procedures in Alberta are convoluted and inadequate, leaving drivers without effective recourse when faced with issues such as unpaid wages or unsafe working conditions. Alberta TEC, Compliance and Oversight department complaint procedures are an offense to the rights of workers that need urgent protection. The complainant is sent a witness statement via email. The issue is that the document it is a non-fillable PDF, so the driver needs to print it, physically fill it in, sign it, scan it, and email it back. How does that help or support the driver? Consider a driver that finally gets the courage to complain to the government and gets told to fill out a form. Drivers in a Driver Inc. situation working for chameleon carriers that go bankrupt and leave unpaid wages are not eligible for employment benefits because they are not employees. As a Driver Inc driver the only option is to get a lawyer and sue. Kobe beef cattle has more protections than drivers in Canada.

The qualified driver shortage is a real safety problem, and more training and experience is better for drivers and everyone on the road. Changes must be made in conjunction with large-scale fundamental improvements to the carriers and industry that employ these drivers. Commercial driving is dangerous and lonely with poor pay, no wage guarantees, terrible working environments with limited rest areas and parking. Unless you fix systemic issues, these red seal drivers will leave the industry or die on the highway trying. Make commercial driving a trade that people aspire to undertake the training and time to become a red seal, anything less is another waste of drivers’ time of money.

It’s Rodeo season in Alberta! Albertans attend local rodeos to celebrate the important history of the rodeo and more importantly the impact livestock and agriculture have on our community. When listening to the opening remarks of the various elected officials that attend these rodeos remember this, Alberta Transportation and Economic Corridors created a special permit for the oil and gas industry. A permit that is not available to the livestock transportation sector despite the urgent need and requests from those drivers and carriers. See my blog The dirty business of lobbying and the impact on road safety for the specific details of that sketchy deal.

The oilfield exemption permit exempts federally regulated drivers operating under the oilfield permit from using a ELD (Electronic Logging Device), exempts the driver from the cycle restrictions and does not require the driver to record a work shift start and end time, only total hours. Federally regulated livestock transportation companies are required to install ELD’s and those drivers have zero exemptions.

The FMCSA (Federal Motor Carrier Safety Administration), the United States  transportation regulatory body, has a livestock transportation exemption, 395.1 (k)(4) (Federal Motor Carrier Safety Regulation). The exemption was built into the ELD regulation and no permit is required. The ELD mandate in Canada requires a certified ELD to be programmed with the Canadian and the United States hours of service rules. The basis of the NAFTA agreement was to facilitate cross border trade between Canada, Mexico and the United States. How does allowing an exemption for US drivers but not Canadian drivers operating in the United States make any sense or respects the spirit of NAFTA?

The Alberta government mandate is focused on revenue generation and building the Alberta War Chest. If Alberta Transportation and Economic Corridors is not interested in allowing a free exemption for Livestock Transportation providers, then establish a Livestock ELD permit and make some money. The Province of Manitoba issues an ELD exemption permit why can’t Alberta?

The Honourable Devin Dreeshen, Minister of Alberta Transportation and Economic Corridors just announced in a news release July 4, 2024; Alberta is marking more than a year of working with Saskatchewan and Manitoba through the Prairies Memorandum of Understanding (MOU) to advance economic corridors and enhance collaboration with Alberta’s prairie neighbours. To date, the three provinces have achieved harmonization of regulations related to commercial carriers that improve both safety and regulatory requirements.

“By keeping the momentum of the Prairies MOU going, we can continue to lead the way in building economic corridors, cutting red tape, and creating jobs. This paves the way to make nation-building projects a reality again in western Canada.” Devin Dreeshen, Minister of Transportation and Economic Corridors

While the Prairies Memorandum of Understanding was supposed to harmonize regulations, the absence of ELD permits or ELD interpretations for commercial carriers in Alberta raises questions about consistency and accountability. It is crucial for commercial carriers to advocate for a level playing field and demand transparency from Alberta Transportation and Economic Corridors.

As Albertans gather to celebrate Rodeo season and the contributions of livestock and agriculture, it's essential to address the unequal treatment of transportation providers in the province. The disparities in ELD exemptions highlight broader issues of fairness, safety, and accountability within the industry. It’s not nice to play favorites. 

In the world of commercial transportation, safety is paramount. To ensure the safety of drivers and other road users, regulations and monitoring programs are essential. One such program is the National Safety Code (NSC), which sets standards for commercial vehicles, drivers, and motor carriers in Canada. This code, though not law, is crucial in guiding provincial and territorial governments in drafting their safety regulations. In Alberta, the regulations are outlined in the Commercial Vehicle Certificate and Insurance Regulation, AR 314/2002 (Part 4.1).

NSC Standard 7 is the criteria for carrier and driver profiles. The Carrier Profile system is designed to provide an overview of a carrier's safety performance, encompassing records of infractions, collisions, on-road inspections, and facility audits. This system allows Alberta to monitor carriers' performance and take action against those posing safety risks across North America.

The Carrier Profile acts as a report card for carriers, offering transparency to stakeholders like shippers, insurance companies, and the public. By accessing this information, stakeholders can make informed decisions about engaging with specific carriers, promoting safety and accountability within the industry.

However, there is a critical issue with the reliability of the Carrier Profile data. Despite its intended purpose, there is a significant flaw in data sharing between jurisdictions. Alberta is not accurately capturing enforcement data from other provinces. This oversight means that Alberta trucking companies involved in incidents outside the province may not have their records updated promptly or accurately on their Carrier Profiles.

The implications of this data discrepancy are concerning. Carriers with incomplete or delayed information may not face the necessary interventions or audits, leading to inaccuracies in their risk factor scores. This discrepancy could potentially result in carriers maintaining a clean record, qualifying for insurance discounts, and evading enhanced monitoring or audits due to inaccurate risk assessment.

Moreover, the shortcomings extend to the auditing process itself. TPA (Third Party Auditors) do not have encryption keys and cannot audit unencrypted RODS. TPA (Third Party Auditors) lack proper training, support, and communication channels with Alberta Transportation, leading to flawed audits that further impact safety compliance determinations. This systemic issue raises questions about the effectiveness and integrity of the safety oversight program in Alberta.

Despite federal funding allocated to enhance road safety and data exchange initiatives, the existing gaps in the Carrier Profile system highlight a critical need for improvement. The discrepancy between intended safety measures and operational shortcomings underscores the urgency for corrective actions and increased accountability within the transportation safety framework.

Why is Alberta Transportation allowed to continue a program that is fundamentally flawed? Why are taxpayers paying salaries to a leadership group to run a flawed program? This is just another example of government inertia that is allowed to continue unabated while bureaucrats collect taxpayer salaries to do a terrible job. As taxpayers and stakeholders invested in road safety, it is essential to demand transparency, efficiency, and accuracy in safety monitoring programs. Accountability and rectification of existing flaws are imperative to uphold the standards of safety and compliance in the commercial transportation industry.

In conclusion, the revelations regarding the Alberta Transportation safety monitoring system shed light on the need for reform and transparency in data sharing and auditing processes. By addressing these issues, we can ensure that carriers are held accountable, road safety is prioritized, and the integrity of safety compliance programs is maintained for the well-being of all road users.