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.
In my blog, Tampering 86(3) and Table 4, I reviewed the Data Diagnostic Events and Malfunctions from the Technical Standard Table 4 and the troubleshooting to mitigate these events. Data Diagnostic Events and Malfunctions are a continuous source of annoyance for ELD administrators and drivers. Without an interpretation guide from Alberta Transportation industry is flying blind and most carriers do not know how Data Diagnostic Events and Malfunctions are treated in a hours of service review in a NSC Audit.
There are ongoing efforts to revise the Technical Standard and allow Data Diagnostic Events to self-clear when the underlying issue is resolved. This would greatly benefit drivers and administrators by simplifying the process and reducing the burden of manual entries by the driver to clear these events.
These changes are urgently needed but, the wheels of government turn slowly. First, the proposed Technical Standard changes have to be adopted and a new Technical Standard written. The ELD providers will have to write new code, new programming needs to be tested and recertified. All of the ELD providers are either recently re-certified or are in the process of getting recertified. No ELD provider wants to pay for re-certification halfway through a 2-year certification term. The ELD certification process is already a massively expensive debacle (think ArriveScam). These ELD changes (if adopted) are at least a couple of years out.
In the interim I suggest using the NSC Standard 9 Hours of Service, Malfunctions section 78 (1) as the interpretation guide for Table 4 in the Technical Standard. NSC Standard 9 was developed by the CCMTA and endorsed by Transport Canada, Standard 9 focuses on the resulting Malfunctions rather than Data Diagnostic Events, aligning with the proposed revisions to the Technical Standard.
By following this strategy, carriers and ELD administrators can have a clearer understanding of how to interpret ELD-generated data while waiting for the necessary changes to be implemented. This interim solution offers a regulatory-supported approach to managing Data Diagnostic Events and Malfunctions effectively.
