Narrow transportation

Cabotage – National point-to-point movements for the international commercial transport of goods – International law

When importing goods into Canada by trucks, trailers, semi-trailers and containers, businesses may have the option of picking up and delivering domestic goods to Canada during their trip. While these additional domestic deliveries may make logistical sense, they are governed by Canadian cabotage laws which are technical and often poorly understood.

Penalties for violating cabotage laws can be severe – which may include monetary fines, confiscation of goods and deportation. In view of the growing concerns about the application of these laws, this article will be useful in determining whether transport companies and importers should seek additional advice and information.

Cabotage laws affecting the trucking industry can be divided into those affecting the equipment used (which is treated as an import) and those affecting the driver (who is only allowed to move goods directly to the inside and outside the country). Their goal is to protect internal trade and the Canadian labor market.

Trucks and trailers based abroad

The Canada Border Services Agency (“CBSA”) declares that only Canadian operators driving Canadian vehicles are authorized to make point-to-point deliveries of domestic goods in Canada. Trucks and trailers established abroad and used for international commercial transport in Canada can enter Canada duty free. However, these foreign-based vehicles cannot be used in domestic movements except under specified circumstances.1

Trucks and trailers established abroad may be imported into Canada duty-free to transport goods from one point in Canada to another point in Canada when:

  • that the transport is incidental to the international traffic of imported or exported goods;
  • the transport does not take place outside of Canada; and
  • the conveyance has not entered Canada for the purpose of a movement in transit through Canada to a point outside of Canada.2

Travel incidental to international traffic

This limited exception allowing trucks and trailers established abroad to transport goods from one point in Canada to another in Canada is subject to the following restrictions:

  • only one accidental trip is allowed per international trip;
  • only “minor deviations” can be made from the international route or route; and
  • the incidental domestic move must take place immediately before or after the international move.

CBSA policy states that a domestic move is an “incidental move” if it takes place entirely within Canada and generally follows the international move route.

No transport outside of Canada

A foreign-based truck and trailer are not eligible for duty-free entry into Canada if they are used to pick up domestic goods and then leave Canada at any time prior to the delivery of those goods. national goods.

Transit movements

A foreign-based truck or trailer that entered Canada duty-free with goods destined for a point outside of Canada is not permitted to transport domestic goods into Canada. No incidental domestic use is permitted from a foreign-based conveyance, container or trailer that transports goods from a point outside of Canada in transit through Canada. , at another point outside Canada or in situations where the goods are transported from one point in Canada, through a foreign territory to another point in Canada.

For example, an American truck transporting goods to Canada for the purpose of delivering them to Alaska would not qualify for duty-free entry into Canada if it planned to transport domestic goods between two Canadian points en route. .

Repositioning movements

Foreign-based vehicles may also move domestic goods between two Canadian points after the delivery of a load of imported goods if the vehicle is on the way to pick up a scheduled load of goods to be exported from Canada. CBSA policy sets out the following conditions:

  • the export load must be scheduled for pickup when the contract for the movement of the domestic load is issued;
  • the drop-off point of the repositioning load must be in direct line for the handling of the export load; and
  • only one repositioning movement is authorized per international trip.

Containers based abroad

Foreign-based sea containers can also transport domestic goods to Canada after being imported into Canada duty-free as long as:

  • the transport does not take place outside of Canada; and
  • the container did not enter Canada for the purpose of a transit movement through Canada to a point outside of Canada.

Specified containers must be exported within 365 days of the date of importation (or for an additional period not exceeding 24 months when a customs officer is satisfied that the export of the containers is delayed for prescribed reasons).

Truck’s driver

While Canada Customs Act and Customs tariff regulate the use of equipment in international removals, Immigration and Refugee Protection Act (Canada) regulates truck drivers.

Foreign drivers generally require immigrant status to travel within Canada on an international trip.

The Canada-United States-Mexico Agreement (“CUSMA”) allows truck drivers to enter Canada as “business visitors” for the purpose of transporting goods or passengers (i) in Canada to from a CUSMA territory, or (ii) from Canada to a CUSMA territory. However, the driver cannot load and unload domestic goods in Canada under CUSMA.

A foreign truck driver must demonstrate additional conditions in order to qualify as a business visitor under CUSMA, including:

  • whether they are citizens of Mexico or the United States;
  • that the purpose of the proposed trip is international;
  • that they do not seek to enter the local labor market; and
  • that the principal source of remuneration and the principal place of business are both outside Canada.3

Footnotes

1. CBSA Memorandum D3-1-5 – International Commercial Transportation.

2. Vehicles, trailers and semi-trailers must be exported within 30 days of the date of importation (or for an additional period not exceeding 24 months where a customs officer is satisfied that the export is delayed for prescribed reasons). Customs memorandum D3-1-5 International commercial transport.

3. Appendix 1 to Annex 16-A of CUSMA.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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