Directive for the Issuance of Exemptions From Regulatory Requirements Pursuant to the Motor Vehicle Transport Act

TP14832 E

1.0 INTRODUCTION

1.1 Policy Objective

The purpose of this document is to define parameters on how the Minister’s opinion is formed, and against what criteria, in granting exemptions from regulatory requirements and to ensure the exemption process is equitable to all those who come forward with a request, while simultaneously ensuring the best interests of the public are protected.

1.2 Policy Statement

Transport Canada is committed to implementing standards and procedures for the timely and consistent processing of exemption requests and to formulate the decision to either grant or deny exemptions from specific regulatory requirements, based on fair and objective criteria.

1.3 Applicability

This policy applies to all parties involved in the exemption-granting process.

2.0 DEFINITIONS, ASSUMPTIONS AND APPROACH

2.1 Definitions

  1. Exemption:

    An exemption entitles a person or entity to act outside the normal regulatory requirements.

    The only way in which compliance with a regulatory provision governing motor carrier safety will not be required is under an exemption by executive decision pursuant to section 16 of the Motor Vehicle Transport Act (MVTA). This section authorises the Minister to exempt from the provisions of that Act or regulations made under it, on such terms and conditions that he deems necessary. The Director General, Motor Vehicle Safety has been authorized to make the decision to grant or refuse an exemption on behalf of the Minister.

    The exemption provision within the Act, reads as follows:

    16(1) “The Minister may, after consultation with the provinces that would be affected by a proposed exemption, exempt from the application of any provision of this Act or the regulations, either generally or for a limited period or in respect of a limited area, any person, the whole or any part of any extra-provincial motor carrier undertaking or any class of those undertakings, if in the opinion of the Minister the exemption is in the public interest and is not likely to affect motor carrier safety.”

    16(2) “An exemption under subsection (1) is subject to any terms or conditions that the Minister may specify in it.”

  2. Public Interest

    The concept of public interest has no fixed meaning in law and its scope may be broadened or narrowed according to the circumstances. It is clear, however, that the simple protection of a “private interest” will not satisfy the public interest test. Consideration must be given to how the exemption will impact on other members or segments of the regulated community as well as on the public at large. (Refer to Appendix D for factors to consider in the determination of “public interest” during the decision-making process of whether to grant or deny an exemption request.)

  3. Motor Carrier Safety

    Any exemption issued under section 16 of the MVTA must be such that it is not likely to negatively affect motor carrier safety afforded by the regulatory provisions to which the exemption applies.

  4. Office of Primary Interest (OPI)

    This is the office with the authority to exercise primary management/leadership responsibility in the execution of an assigned task, such as the processing of an exemption request. The OPI with the overall responsibility for processing requests for exemptions in this case is the Motor Carrier Division within the Standards, Research and Development Branch of the Motor Vehicle Safety Directorate. However there are other interests that may be involved in this process such as the Highway, Border and Motor Carrier Division of the Surface Transportation Policy Directorate with respect to the public interest test or the Legal Services Directorate with respect to the legal review of the file if the intention is to recommend granting of the exemption.

  5. Risk Assessment

    A risk assessment consists of a description of safety issues and concerns, an evaluation of those issues and concerns by means of an assessment and an indication of measures for risk mitigation and control.

2.2 Assumptions

This Directive has been developed based on the following assumptions:

  1. Conformity with the requirements identified in this Directive does not of itself guarantee approval of an exemption.
  2. An extra-provincial truck or bus undertaking seeking an exemption will provide all information and documentation necessary to substantiate their proposal and facilitate the Minister’s assessment of it at the time it is formally submitted for consideration in final form.

2.3 Approach

  1. The test for assessing the merits of an exemption request is two-fold:
    1. Is the granting of the exemption in the public interest?
    2. Is the granting of the exemption not likely to affect (negatively) motor carrier safety?
Each question stands on its own and must be addressed independently of the other by the OPI. In other words, the results of the test must be that the exemption is both in the public interest and is not likely to affect motor carrier safety.

In most cases, exemptions are issued only in exceptional circumstances and may be granted only after a thorough analysis is conducted on the impact the granting of the exemption may have on motor carrier safety and the public interest. An equivalent level of safety is established through the development of terms and conditions that will provide alternate requirements or procedures to ensure that any safety concerns are satisfied and that safety is not compromised. In this regard, consideration should be given to any pending amendments to the regulation from which an exemption is being sought as well as the terms and conditions of previously issued exemptions.

The authority to issue an exemption is a power that must be exercised judiciously. Exemptions should be granted in a non-discriminatory and consistent fashion. The process for issuing exemptions provides guidance on the roles, responsibilities and steps to be followed when considering an exemption application. Please also refer to the Appendices (A-H) for further supplementary guidance material with respect to the exemption request process and document drafting.

3.0 BACKGROUND

The regulatory governance of the motor transport industry is a shared jurisdiction between the federal and provincial/territorial governments. The provincial and territorial governments have exclusive jurisdiction over local (intra-provincial) undertakings, which are motor carriers that operate commercial motor vehicles entirely within a province or territory. The federal government has exclusive jurisdiction to regulate extra-provincial undertakings, which are motor carriers that operate commercial motor vehicles beyond the limits of a province or territory. The federal government exercises that jurisdiction through the Motor Vehicle Transport Act (MVTA), together with its companion regulations, the Motor Carrier Safety Fitness Certificate Regulations and the Commercial Vehicle Drivers Hours of Service Regulations. Parliament has vested the authority for administering this legislation in the Minister of Transport who in turn has authorized the Director General, Motor Vehicle Safety to act on his behalf.

When Parliament enacts a law, or a regulation or an order is made under an Act of Parliament, it is a fundamental requirement of the Canadian legal system that legislative enactments will be applied universally and will govern all members of the affected public equally. This enables each person to know what is required by the law and to act with the expectation that all persons to whom the law applies will be obeying the known requirements of that law.

However, it has long been recognized that, in certain situations governed by law, there may be exceptional occasions when the regulation cannot or ought not to apply. In such cases, it may be appropriate to issue an “exemption” which excuses compliance from all or part of the regulatory requirement. The Act therefore, grants the Minister of Transport the power to exempt from the application of regulatory requirements made pursuant to the Act.

In order to ensure the safe and orderly transport of passengers and goods in Canada, Transport Canada has established a national safety fitness framework under the MVTA for extra-provincial undertakings and imposed operational restrictions on working and driving hours by commercial drivers. The Act also authorizes the provincial and territorial governments to enforce the federal regulations and to also apply their own laws to the regulation of extra-provincial undertakings to the extent that those laws are not inconsistent with the MVTA and the companion regulations. Parliament may have exclusive jurisdiction with respect to federal motor carriers, however the provincial and territorial governments have more significant roles in the governance of extra-provincial undertakings than what occurs in the air, rail and marine modes. It is for this reason that the Act requires the Minister, prior to granting an exemption, to consult with the provinces and territories that would be affected by a proposed exemption from the regulatory requirements under federal jurisdiction.

4.0 Standards Incorporated by Reference

A person may also be exempt from the application of standards incorporated by reference into a regulation. In this instance, the person would have to be exempted from the requirement within the regulation to comply with the standard, rather than an exemption from the standard itself. The link between the regulation and the standard would be clearly spelled out in the wording of the exemption document. Section 16 would then be used, and the link between the regulation and the standard would be clearly spelled out in the wording of the exemption.

5.0 The Use of Transportation Policy Statements

Transportation Policy Statements that are issued under the MVTA cannot be used to change regulations or standards. Until the entire process to amend a regulation or standard is completed, the current regulation stands. In some instances where the intended change to the regulation is to bring relief rather than impose stricter requirements, exemptions can be used to bring the change into effect before the amendment officially comes into force. Transportation Policy Statements can be used to provide background and rationale for the planned issuance of the exemption.

6.0 Release of Exemptions to the Public

With respect to the release of exemptions to the public, the departmental position is that the process available under the Access to Information Act need not be used in order for third parties to get copies.of granted exemptions. Transport Canada will release the information on its website at: http://www.tc.gc.ca/eng//motorvehiclesafety/safevehicles-motorcarriers-exemptions-1248.htm

7.0 Contact Office

Brian Orrbine, Chief
Motor Carrier Safety Division (ASFBM)
Telephone number: (613) 990-8855
Facsimile number: (613) 990-2913
E-mail: BRIAN.ORRBINE@TC.GC.CA

Revision Approved by:

The Honourable Denis Lebel
Minister of Transport, Infrastructure and Communities

Effective Date:

APPENDICES

TABLE OF CONTENTS

APPENDIX A: Process for Issuing Exemptions

APPENDIX B: Exemption Request Form

APPENDIX C: Assessment Paper

APPENDIX D: Factors to Consider When Interpreting “Public Interest”

APPENDIX E: Preparing the Exemption Document

APPENDIX F: Sample Exemption Structure

APPENDIX G: Sample Exemption Cancellation

APPENDIX H: Time Zones and Daylight Savings Time

APPENDIX A
PROCESS FOR ISSUING EXEMPTIONS

General

Responsibility for the application and monitoring of this Directive has been assigned to the Motor Vehicle Safety Directorate, more specifically to the Director, Standards, Research and Development Branch and is managed by the Motor Carrier Safety Division. The Motor Carrier Safety Division receives and addresses all applications for exemption and maintains a record of all exemptions issued. Questions regarding the contents of this Directive as well as its implementation should be directed to that Office.

Step 1: Client Exemption Request

Client must make own case sufficiently compelling with respect to section 16 of the Motor Vehicle Transport Act to justify the exemption request being granted.

  1. Complete and submit Exemption Request Form (use form template in Appendix B) to Motor Carrier Division of Transport Canada at Headquarters in Ottawa.
  2. The burden is on the applicant to make their own compelling case why the exemption should be granted.
  3. Do this by providing supporting argument on the following criteria:
    1. How the granting of the exemption would be in the public interest; and
    2. How the granting of the exemption would not likely affect motor carrier safety.
  4. Prepare a risk assessment to evaluate the potential risks associated with the granting of the exemption. It is recommended that the applicant utilize the Canadian Standard Association’s (CSA) Standard CAN/CSA-Q850-97 (R2009) Risk Management Guideline for Decision-Makers, as amended from time to time. The CSA guideline is intended to assist decision-makers in effectively managing all types of risk issues, including injury or damage to health, property, the environment, or something else of value. Other risk assessment methodologies may also be used.
  5. Consider proposing terms and conditions to which the exemption would be subject, that could mitigate any potential risk and ensure that motor carrier safety would not be affected.
  6. If the application pertains to the renewal of an exemption, place particular focus on an examination of how the exemption has worked. If available, provide the cost and benefits of operations under the exemption compared to operations under the normal rules. Demonstrate how the safety outcome of the exemption was equal to or greater than the normal rules and how the exemption might have improved operational effectiveness. Identify any facts or information which have changed since the issuance of the original exemption.
  7. Ensure that application for exemption is fully completed. Incomplete applications may result in processing delays if the application is returned to the client or held up awaiting additional information.

Step 2: Exemption Request Assessment

Transport Canada must assess whether the client was able to successfully argue its case against the criteria set out in the 16(1) test.

  1. Determine that the applicant is an extra-provincial undertaking and falls under the jurisdiction of the Motor Vehicle Transport Act.
  2. Forward to party making the request an email of acknowledgment that their request has been received.
  3. Review exemption request material to ensure all necessary documentation has been provided. If not, return the application to the client, await provision of the missing or incomplete documentation before proceeding with the assessment.
  4. For planning purposes, coordinate the involvement of all relevant interest parties in the process, as early as possible. Formulate questions, if necessary, for the applicant or Transport Canada legal counsel. Identify topics to be addressed in the assessment document.
  5. Follow the process outlined in the Exemption Process and the Assessment paper.
  6. Conduct a technical assessment of the request in accordance with the two-fold 16(1) test and evaluate the arguments and evidence put forward by the party making the request, to determine if in fact it demonstrates that the exemption, if granted, will be:
    1. in the public interest; and
    2. not likely to affect motor carrier safety.
  7. The safety test will be performed first. Where the OPI believe that safety is clearly compromised, a recommendation to refuse an exemption can be formulated without referring to the Highway, Border and Motor Carrier Division. When in doubt, the OPI is encouraged to consult that Directorate to assist in determining whether the public interest test needs to be considered.
    1. Question: Can an equivalent level of safety be maintained by the creation of conditions? If yes, draft conditions.
  8. Conduct public interest test next. Where appropriate, refer to the Highway, Border and Motor Carrier Division for input with respect to determination of the Public Interest. The referral criteria is as follows: When an exemption request is for a commercial purpose that has potential for unfair economic advantage of one company over another, or a foreign motor carrier over a Canadian; or any other situation where social or economic policy issues of national concern may be implicated, if the exemption is granted. Referral is not expected for any issues that deal with individuals; i.e. owner-operators of commercial motor vehicles.
    1. Question: How is the granting of the exemption in the public interest?
    2. Question: What factors should be considered in coming to this determination? Identify the factors to consider (Refer to Appendix D - Factors to consider when interpreting “public interest”).
  9. Document the decision-making process and assessment findings by completing the Assessment Paper (Refer to Appendix C – Assessment Paper) and record the justification to grant or deny the exemption. If any issues of discord arise amongst the relevant interests, place such information on the record, as well as the means by which the issues were reconciled. Indicate the summary status of the request for exemption.

Step 3: Formulation of Recommendation to Grant or Refuse

Transport Canada officials must formulate their recommendation to grant or refuse the exemption on the basis of the assessment findings completed in accordance with the 16(1) test.

  1. If there is a prima facie determination to recommend refusal of the exemption request, the OPI shall submit the documentary package to the Director General for review and a decision.
  2. If there is a prima facie determination to recommend granting the exemption request, the OPI must prepare the draft exemption in both official languages. [New text] First the OPI must determine the proposed validity period or expiry date. As a general rule, the period extending from the date of signature to the specific expiry date set out in line a) under the Validity heading should not extend beyond 36 months.:
  3. The date must be expressed in accordance with ISO 8601 – Representation of dates and times, issued by the International Organisation for Standardization (ISO). For the expiry date, the date, the time and the time zone, in that order, must be indicated clearly. The date is expressed “month date, year”, for example “December 16, 2007”. The time is expressed in hours and minutes separated by a colon. Note that “00:01” is used for the beginning of the day and “23:59” is used for the end of the day. Refrain from using “00:00” or “24:00” which could lead to ambiguity. It is important to verify whether daylight savings time or standard time is in effect at the date of expiry. (Refer to Appendix H for the abbreviations of time zones and the start of daylight savings time in Canada.)
  4. The OPI should seek the input of the applicant to determine if there are any potential implementation issues associated with the terms and conditions set out in the draft exemptions.

Step 4: Legal Review of Exemption Document

All draft exemptions proposed to be granted must be submitted to Legal Services to ensure that there are no legal issues with the contents and effect of the exemption prior to final submission for a decision by the Minister. The OPI must provide the Exemption Request Form; the Assessment Paper; and the draft exemptions and any other supporting documentation.

Step 5: Consultation with the Provincial and Territorial Governments

  1. The Minister must consult with the provinces or territories that would be affected by the proposed exemption. To facilitate this process, the OPI must provide the Exemption Request Form; the Assessment Paper; and the draft exemption in both official languages and any other supporting documentation to the National Safety Code Director in each province and territory. The OPI must give due consideration to any input received regarding the application when formulating their final recommendation and place such input on the record.
  2. If the OPI, after consultation with the provinces and territories, continues to support the recommendation to grant the exemption request, then the OPI must finalize the draft conditions to which the exemption would be subject and proceed with the remainder of the exemption-granting process.

Step 6: Exemption Disposition

  1. The OPI prepares the documentary package, which consists of the application, Assessment Paper, and the exemption documents in both official languages and submits it to the Director General, Motor Vehicle Safety for review and a decision.
  2. If the exemption request should be refused, the OPI must inform the party making the exemption request in writing of the decision and provide rationale.
  3. If the exemption request should be granted, the OPI must inform the party making the exemption request in writing of the disposition.
  4. The OPI will provide feedback to the provincial and territorial governments with respect to how their input was dealt with in the assessment and, if granted, provide each government with copies of the exemptions.
  5. The OPI will provide a copy of all issued exemptions to Legal Services.

Distribution of Exemptions

  1. one copy, in each official language, to the party named in the exemption.
  2. one copy, in each official language, on file of the party named in the exemption.
  3. one copy, in each official language, to the National Safety Code Director of each provincial or territorial government that would be affected by the exemption.
  4. one copy, in each official language, to Legal Counsel, Legal Services.

APPENDIX B
EXEMPTION REQUEST FORM

(To be completed by the party making the request)

REQUEST MADE BY:

Name/Company
Address
Telephone:
Email:
Contact Person

DATE REQUEST MADE:

PROVISION(S) FOR WHICH EXEMPTION IS SOUGHT:

Name of Act/Regulation/Standard
Section Reference

ISSUE:

BACKGROUND:

RATIONALE FOR EXEMPTION:

16(1) TEST: (1) PUBLIC INTEREST:

What factors were considered in the determination of Public Interest? Identify criteria and consider if terms and conditions related to the Public Interest are required?

(2) MOTOR CARRIER SAFETY:

What factors were considered to ensure motor carrier safety is not affected? Identify criteria and formulate as conditions of the exemption:

(3) PROPOSED TERMS AND CONDITIONS BY PARTY MAKING THE REQUEST:

Identify criteria and formulate any other terms and conditions of the exemption:

FILE ATTACHMENTS:

  1. Letter of Request; and
  2. All pertinent documents in support of the 16(1) test.

APPENDIX C
ASSESSMENT PAPER

Purpose

The purpose of the Assessment Paper is to summarize the case being put forward by the party making the request for an exemption with a view to documenting both the exemption request process, and to justify the basis for the decision made by the Minister to either grant or refuse the request. In this way, the official record will show that the Minister’s discretion has been exercised in accordance with a solid process, having taken into consideration all of the relevant facts and law on each case being put before him/her.

The Assessment Paper will reflect Transport Canada’s consideration of the exemption request being made based on the facts, law and proposed conditions put before it; together with the results of the OPI’s assessment of the party’s arguments. Reference will be made to the evidence in support of both elements of the 16(1) test. The OPI will also have the opportunity within this document to provide a rationale for the decision based on the facts of the particular case to either grant or refuse the request.

Before filing its exemption application, and at its earliest convenience, the applicant should contact Road Safety and initiate dialogue on the exemption. The applicant should also ensure that it communicates internally with its drivers that are likely to be affected by the exemption.

Consideration of the Application
In making this determination, the Minister may take into consideration the information provided by the applicant, and any other factors or information that the Minister considers relevant, such as whether:

  • the applicant has ensured that the safety implications of, and/or the risks associated with the exemption have been identified and assessed, and whether any proposed risk mitigation strategies would be adequate;
  • any safety-related or public interest issues or questions remain outstanding, and whether follow-up action is required;
  • the proposal would affect public confidence in the safety of the road transportation system, and if so, in what way;
  • an exemption is the optimum instrument for achieving the desired result.

Road Safety may contact the applicant to discuss its exemption application after it has been filed (e.g. to request further information or clarification with respect to the proposal and supporting documentation). If Road Safety determines that it requires further information to evaluate such an application, it commits to seeking that information in a timely manner. An applicant may likewise contact Road Safety officials to discuss its proposal after filing it.

Road Safety will, when practicable and appropriate, endeavour to contact the applicant in a timely manner to inform it of those possible terms and conditions. If an application is granted, the exemption document will contain terms and conditions that are binding on the applicant during implementation of the exemption and operations under the exemption. Before recommending that an exemption be granted, TC Road Safety may review exemptions made under the MVTA and periodically review the implementation of such exemptions, to assess and ensure their clarity, relevancy and effectiveness as instruments for promoting safe motor carrier and commercial vehicle operations. Such reviews may be carried out independently or collaboratively with the holders of exemptions and the provincial and territorial governments.

Content

The content of the “Assessment Paper” is an answer to the arguments being presented by the party making the exemption request and must include the following information:

  1. Criteria to show that the exemption is in the public interest and not likely to affect motor carrier safety.
  2. Terms and Conditions identified to mitigate any potential risk resulting from regulatory requirements being exempt.
  3. Documented references of meetings, dates, attendees, issues addressed and decisions made.
  4. Documented references that the 16(1) test has been addressed.
  5. Documentation of the decision to recommend the granting or refusal of the request based on the findings.
  6. Conditions of the Exemption.
  7. Validity period.

Subject Headings

The subject headings of the Assessment Paper are:

  1. Background
  2. Public Interest
  3. Motor Carrier Safety
  4. Justification to Support Recommendation to Grant/Refuse
  5. Conditions
  6. Validity
  7. Consultation with Provinces and Territories
  8. Final Disposition
    • Regulatory Change
    • Proposed Regulatory Amendment Initiated
    • Exemption to Expire on (date)
    • Further Action (describe)
      • MOTOR CARRIER:
      • LEGAL SERVICES:
      • SURFACE TRANSPORTATION POLICY DIRECTORATE:

APPENDIX D
FACTORS TO CONSIDER WHEN INTERPRETATING
“PUBLIC INTEREST”

General factors to consider

  1. All factors relating to the Minister’s responsibilities for advancing the attainment of National Transportation Policy objectives respecting extra-provincial motor carrier undertakings found in section 5 of the Canada Transportation Act.
  2. All factors relating to the Minister’s responsibilities for advancing the attainment of the objectives respecting extra-provincial motor carrier undertakings found in subsection 3(1) of the Motor Vehicle Transport Act.
  3. All factors relating to the safety fitness record of the applicant for exemption.
  4. All factors relating directly to the adequacy of transportation service, to its essential conditions of economy and efficiency, and to appropriate provision for and best use of transportation facilities.
  5. All factors relating to public health and safety, as well as a general public benefit, need or welfare as it relates to bus and truck transport.
  6. All factors that support the basic legal principle that justice should always be done and be seen to be done.

Factors to consider with particular focus on exemptions

  1. The consequence of an exemption being granted or denied must be considered in terms of the needs of or benefits to the public and the local community; consequences which may be of commercial or practical convenience, or necessity of the operation.
  2. It is not sufficient that the exemption be considered “safe” and “commercially expedient” for the applicant.
  3. All factors that examine the safety impact on the community at large.
  4. All factors that examine the economic impact on “non-exempt” motor carriers given that an exemption must not result in any unjustified competitive advantage to one party over another.
  5. All factors that examine whether or not an exemption written against a foreign motor carrier will economically penalize another foreign carrier, or Canadian carrier.

Note: In the rest of this Appendix D is outlined the analysis involved in making the determination of “public interest” under the Motor Vehicle Transport Act.

Analysis Involved in Making the Determination of “Public Interest” Under the Act

What is the meaning of the term “Public Interest” in the Motor Vehicle Transport Act?

  1. There is no statutory definition for “public interest”.
  2. Instead, the Minister has been delegated the authority by Parliament to use his discretion to make an opinion on what constitutes public interest.

How does the Minister exercise his discretion?

  1. He must have regard to all of the relevant facts and law.
  2. He must not be swayed by irrelevant considerations.
  3. He must have regard to the letter and purpose of the legislation that gives him the power to act.
  4. He must consider each case on its merits. Policy is relevant, but only insofar as applied to the facts.

How does the Minister determine what are relevant considerations?

  1. He must make his examination of the facts and law in terms of the letter and spirit of the Motor Vehicle Transport Act.
  2. He must make this determination in relation to the relevant policy and objectives found in the Canada Transportation Act and the Motor Vehicle Transport Act.

What Are the Policies Found in the Motor Vehicle Transport Act?

  1. Section 3 provides the clearest policy.

Statement of objectives

3. (1) “The objectives of this Act are to ensure that the National Transportation Policy (see below) set out in section 5 of the Canada Transportation Act is carried out with respect to extra-provincial motor carrier undertakings, and, more specifically, that
(a) the regulatory regime for those undertakings is focused on safety performance assessments based on the National Safety Code for Motor Carriers; and
(b) the operating standards that apply to those undertakings are applied consistently across Canada.”

Statements of Policy by Governor in Council

3. (2) “The governor in Council may, on the recommendations of the Minister, after consultation by the Minister with the provinces, issue transportation policy statements consistent with the objectives set out in subsection (1).”

THE NATIONAL TRANSPORTATION POLICY REFERRED TO IN THE STATEMENT OF OBJECTIVES IN SUBSECTION 3(1) OF THE MVTA READS AS FOLLOWS:

NATIONAL TRANSPORTATION POLICY

Declaration

5. It is hereby declared that a safe, economic, efficient and adequate network of viable and effective transportation services accessible to persons with disabilities and that makes the best use of all available modes of transportation at the lowest total cost is essential to serve the transportation needs of shippers and travellers, including persons with disabilities, and to maintain the economic well-being and growth of Canada and its regions and that those objectives are most likely to be achieved when all carriers are able to compete, both within and among the various modes of transportation, under conditions ensuring that, having due regard to national policy, to the advantages of harmonized federal and provincial regulatory approaches and to legal and constitutional requirements,

  1. the national transportation system meets the highest practicable safety standards,
  2. competition and market forces are, whenever possible, the prime agents in providing viable and effective transportation services,
  3. economic regulation of carriers and modes of transportation occurs only in respect of those services and regions where regulation is necessary to serve the transportation needs of shippers and travellers and that such regulation will not unfairly limit the ability of any carrier or mode of transportation to compete freely with any other carrier or mode of transportation,
  4. transportation is recognized as a key to regional economic development and that commercial viability of transportation links is balanced with regional economic development objectives so that the potential economic strengths of each region may be realized,
  5. each carrier or mode of transportation, as far as is practicable, bears a fair proportion of the real costs of the resources, facilities and services provided to that carrier or mode of transportation at public expense,
  6. each carrier or mode of transportation, as far as is practicable, receives fair and reasonable compensation for the resources, facilities and services that it is required to provide as an imposed public duty,
  7. each carrier or mode of transportation, as far as is practicable, carries traffic to or from any point in Canada under fares, rates and conditions that do not constitute
    1. an unfair disadvantage in respect of any such traffic beyond the disadvantage inherent in the location or volume of the traffic, the scale of operation connected with the traffic or the type of traffic or service involved,
    2. an undue obstacle to the mobility of persons, including persons with disabilities,
    3. an undue obstacle to the interchange of commodities between points in Canada, or
    4. an unreasonable discouragement to the development of primary or secondary industries, to export trade in or from any region of Canada or to the movement of commodities through Canadian ports, and
  8. each mode of transportation is economically viable,

and this Act is enacted in accordance with and for the attainment of those objectives to the extent that they fall within the purview of subject-matters under the legislative authority of Parliament relating to transportation.

Section 16 of the Motor Vehicle Transport Act provides guidance as to how exemptions should be addressed in the context of the National Transportation Policy and the objectives of the Act.

16(1) “The Minister may, after consultation with the provinces that would be affected by a proposed exemption, exempt from the application of any provision of this Act or the regulations, either generally or for a limited period or in respect of a limited area, any person, the whole or any part of any extra-provincial motor carrier undertaking or any class of those undertakings, if in the opinion of the Minister the exemption is in the public interest and is not likely to affect motor carrier safety.”
16(2) “An exemption under subsection (1) is subject to any terms or conditions that the Minister may specify in it.”

Case law

  1. The Minister has a responsibility towards the general public to promote the safety of extra-provincial motor carrier operations.
  2. The Minister administers the legislative and regulatory requirements with a primary focus on public safety.
  3. The Minister has a very broad discretion to consider any factor when interpreting public interest, so long as it relates to the matter at hand. The Supreme Court said that the term public interest does not and cannot have a uniform meaning in each statute. It must be interpreted in light of the legislative history of the particular provision in which it appears and the legislative and social context in which it is used.

What is the Primary Public Interest under the Motor Vehicle Transport Act?

  1. The safety of commercial motor vehicle operations by compliance with the rules of safety.

Responsibilities of the Minister

  1. The Minister must make his determination with the following policies in mind:
    1. The Minister is responsible to the public for the regulation of commercial vehicle activities so as to promote safety.
    2. The Act enables a detailed regime of regulation intended to promote an acceptable level of motor carrier safety.
    3. Drivers, motor carriers and other participants in the motor transport industry are expected to comply with those regulations, and thereby achieve an acceptable level of commercial vehicle safety.

Within what context is the determination of public interest to be made?

  1. In accordance with the circumstances of each individual case.
  2. Within the jurisdictional limitations of the Motor Vehicle Transport Act.
  3. With regard to the impact of the decision on the applicant, the general public, other members of the motor transport industry, and the proper regulatory enforcement and supervision of extra-provincial undertakings.

APPENDIX E
PREPARING THE EXEMPTION DOCUMENT

An exemption cannot be used to compel a person to do something the regulations themselves do not require. If, in the course of granting a person relief from a regulation the exemption actually imposes more onerous conditions than the regulation itself, that person always has the choice to not take advantage of the exemption. In this case, the person is expected to comply fully with the existing regulations and standards. Note that if the beneficiary of the exemption does not comply with its conditions, the exemption becomes null and void and the person must then comply fully with the regulations. Enforcement proceedings cannot be instituted against an exemption, but only against a regulation.

Section 16 of the Motor Vehicle Transport Act authorizes the Minister to grant exemptions from the Act or the regulations, but it does not permit him/her to use this instrument to create completely new regulations. The Minister can exercise the exemption-granting authority to provide relief from an existing regulation, and can impose whatever conditions are needed to meet his/her responsibilities in ensuring that motor carrier safety is not affected, and that the exemption is in the public interest. Although these conditions may look like new regulations or standards, they are not. The conditions are the means by which any potential risk to motor carrier safety by allowing the exemption from the regulation is mitigated.

Although it is understood that an exemption is not an appropriate instrument by which to regulate, in the circumstance where a specified population representing a particular segment of industry seeks voluntary compliance to standards that were omitted or need expansion due to technological development, an exemption may be appropriate for the interim period required until such time as amendment to the regulations and related standards complete the regulatory-change process.

Considerations to bear in mind

  1. An exemption cannot be dated retroactively and is effective only from the date on which it is signed by the Minister.
  2. An exemption cannot be written against a provision that imposes a duty on the Minister.
  3. The party being exempt has the choice to follow either the exemption, or the regulation.
  4. However, once the choice is made to follow the exemption, the party must comply with its conditions.
  5. If the party chooses not to follow the exemption, the regulation applies.
  6. Enforcement can only be exercised against the regulation, not the exemption.
  7. When an exemption is required from a standard that is incorporated by reference into a regulation, the exemption must be written against the regulation to the extent of its relationship to the standard.
  8. The OPI cannot make promises to the party making the exemption request that (a) it will be granted, and (b) it will be granted by a certain time limit. The issuance of an exemption is a privilege and cannot be guaranteed, and the time required for the process to be completed will depend on many factors over which the OPI may have no control.
  9. After the party making the exemption request provides to the OPI the exemption request form, together with all the necessary supporting documentation, subject to the complexity of the issues, allow for approximately six (6) weeks for the exemption request to be processed and the exemption document legally vetted.

Checklist of Questions to Ask

  1. Who are the parties involved making the request for an exemption?
  2. Why is the exemption necessary? What is the regulation preventing the party making the request for an exemption from doing?
  3. What specific regulatory provision and/or standard linked to what regulatory provision is the exemption being written against?
  4. Has the correct regulatory provision been identified?
  5. Is the regulatory provision against which the exemption is being written an “offence-creating” regulation; i.e. with such words present as “no person shall”, or “the motor carrier shall”, or does it impose a duty on the Minister?
  6. Are there any conditions that must first be met before the exemption will even apply?
  7. Has the test for assessing the merits of the exemption request under the circumstances of your particular case been applied?
    1. How is the exemption in the public interest? Identify criteria.
    2. How is motor carrier safety not likely to be affected? Identify criteria.
  8. The results of the test for assessing the merits of the exemption request and the criteria identified to support the arguments made by the party making the request then become the conditions of the exemption.
  9. What time period should the exemption be in effect? Or until what event, or series of events occur? The maximum time period is generally 36 months but can be for a lesser period, for example, in instances where the inherent risks necessitate close monitoring of how the exemption worked and was implemented.
  10. If an exemption is considered further to a decision by the Minister to change the regulation or associated standard, have you instituted steps to generate a regulatory amendment to the pertinent regulation and standard?
  11. Once the Regulatory Amendment comes into effect, has a follow-up procedure been set up to formally cancel the exemption?

Exemption Document Format

Introduction

Note that an exemption as a legal document must contain certain essential elements of both substance and form to ensure its legal validity. By virtue of the fact that the exemption removes a party from complying with the requirements of a particular regulation, the exemption then becomes the “new legal regime”. The document must stand on its own and withstand legal scrutiny should circumstances unfold that would place the exemption in the public eye, and/or necessitate its cancellation by the Minister. The following general guidelines are intended to give assistance in drafting. However, depending upon the facts of any given situation or the legal nature of the issue, Legal Services may have to make adjustments to the ultimate wording of the document.

General Structure

The exemption must be a stand-alone document and written independent of other documents. It must not be incorporated into a letter or other correspondence, nor include any extraneous information such as ordinary business matters. The document must speak exclusively to the exemption, its purpose, to who it applies, the conditions that must be met in order for the exemption to come into effect, and the terms under which it will remain valid, and its expiry date.

Headings

The exemption should provide information under the following general headings, as appropriate:

  1. Introductory Paragraph. Should identify the specific provision number of the regulation on the part of a person or corporation (name and address), with description of what is required by the exempted regulation.
  2. Purpose. Explain why the exemption is necessary, and how the current regulatory structure is preventing the party from doing what is desired.
  3. Application. The document must clearly indicate to whom or to what entity the exemption applies. All identifying particulars, if relevant, are to be included here; such as the National Safety Code registration number, commercial vehicle identification by manufacturer, type, model serial number, vehicle registration licence plate number, etc. Also included under this heading would be any requirements that must first be satisfied before the exemption can take effect.
  4. Conditions: The terms and conditions of any exemption will vary depending on the facts of the situation. The terms and conditions of the exemption are those criteria that were identified during the public interest test and motor carrier safety test, and can be included here. It must be clear that the exemption is in effect only if the conditions are satisfied throughout the validity period of the exemption.
  5. Validity: The validity section defines the term of the exemption, as well as identifies grounds for cancellation setting out a chronology of potential triggering events which would allow for the cancellation of the exemption by the Minister should circumstances require it.
  6. Cancellation: There may be a number of circumstances which give rise to the need to legally cancel the exemption. This must not be overlooked for there can be legal consequences if the document does not expire. For example, an exemption may be cancelled where the Minister is of the opinion that it is no longer in the public interest, or is likely to affect motor carrier safety. As well, if an already-issued exemption requires some form of “amendment”, the exemption already in existence would need to be cancelled before the “revised” exemption could be reissued, otherwise two exemptions would have the same legal force and effect creating potential confusion should there be conflicting conditions. In addition, this could create a problematic effect should the Minister wish to cancel the exemption for breach of conditions where two exemptions and two sets of conditions co-exist. This problem can be avoided by either including a cancellation clause at the bottom of the “amended” and reissued exemption, or issuing a stand-alone exemption cancellation document.

Signature of Director General, Motor Vehicle Safety

The signature line must state the date, the city and province where the exemption is issued, and the name and title of the Minister of Transport, Infrastructure and Committees.

APPENDIX F
SAMPLE EXEMPTION STRUCTURE

Exemption by Executive Decision
Pursuant to section 16 of the Motor Vehicle Transport Act, and after taking into account that the exemption is in the public interest and is not likely to affect motor carrier safety:

I hereby exempt (person, corporation and address) from the requirement set out in (provision) of the Commercial Vehicle Drivers Hours of Service Regulations requiring that (describe what is required in the regulation using the wording found in the provision from which an exemption is being sought), subject to the following conditions.

Purpose
The purpose of this exemption is to allow (person/corporation) to (describe what needs to be done to prevent the person or corporation from operating outside of the requirements of the regulation, along with any other reasons that make the exemption necessary; i.e. to harmonize with U.S. standards, etc.).

Application
This exemption applies to (_____ drivers of commercial vehicles registered to (name of company) in its operations under National Safety Code Number ______).

Conditions
This exemption is subject to the following conditions:

  1. . . . . .shall...;
  2. . . . . .shall...;
  3. . . . . .shall....

Validity (These three provisions are mandatory.)
This exemption is in effect until the earliest of the following:

  1. December 15, 2012 at 23:59 EST; (There must be a termination date, a maximum of 36 months.)
  2. the date on which any condition set out in this exemption is breached;
  3. the date on which this exemption is cancelled in writing by the Minister where he is of the opinion that it is no longer in the public interest, or is likely to affect motor carrier safety; or
  4. the date on which this exemption is superseded by an amended exemption.

DATED (day) of (month), (year).
Signature Block of Director General, Motor Vehicle Safety for and on behalf of the Minister of Transport.

APPENDIX G
SAMPLE EXEMPTION CANCELLATION

The exemption from (provision) of the Motor Carrier Safety Fitness Certificate Regulations issued to (person/company and address) on (date) at (place) by the Minister of Transport is hereby cancelled because it is the opinion of the Minister that it is no longer in the public interest and/or is likely to affect motor carrier safety.

DATED (day) of (month), (year).
Signature Block of Director General, Motor Vehicle Safety for and on behalf of the Minister of Transport.

APPENDIX H
TIME ZONES AND DAYLIGHT SAVINGS TIME

Abbreviations for time zones

The abbreviations for each time zone in Canada are as follows:

French Time zone English
Daylight Savings Standard Daylight Savings Standard
HAT HNT Newfoundland NDT NST
HAA HNA Atlantic ADT AST
HAE HNE Eastern EDT EST
HAC HNC Central CDT CST
HAR HNR Mountain MDT MST
HAP HNP Pacific PDT PST

Start of daylight savings time

Daylight savings time may be in effect at the date of signature and at the date of expiry. The following excerpt from ISO 8601 – Representation of dates and times provides information on the start of daylight savings time.

“The start of daylight savings time in Canada is determined by provincial legislation. Exceptions may exist in certain municipalities. The time zone maps and the start time listed below have been in effect since November, 2011.

Province 2nd Sunday in March 1st Sunday in November
Newfoundland 02:00 NST 02:00 NDT
Nova Scotia 02:00 AST 02:00 ADT
Prince Edward Island 02:00 AST 02:00 ADT
New Brunswick 02:00 ADT 02:00 ADT
QuébecFootnote 1 02:00 EST 02:00 EDT
OntarioFootnote 2 02:00 EST 02:00 EDT
Manitoba 02:00 CST 02:00 CDT
SaskatchewanFootnote 3 02:00 MST 02:00 MDT
Alberta 02:00 MST 02:00 MDT
British Columbia 02:00 PST 02:00 PDT
Northwest Territories 02:00 MST 02:00 MDT
NunavutFootnote 4    
Yukon 02:00 PST 02:00 PDT
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