How would you address safety certificate sanctions?

All provinces are required to issue a National Safety Code number and safety fitness certificate to commercial carriers in order to monitor safety compliance. In Ontario, this is the Commercial Vehicle Operator’s Registration (CVOR), which tracks a carrier’s safety performance, and which must be in good standing in order to operate.

If an operator is deemed unsafe, the highway safety regulators in each province can sanction the carrier, including suspending its safety certificate, effectively putting it out of business. In Ontario, the Highway Traffic Act affords the Registrar of Motor Vehicles broad discretion to sanction unsafe operators if there is reason to believe that the CVOR holder “will not operate a commercial motor vehicle safely or in accordance with [the] Act and other laws relating to highway safety” or “any other sufficient reasons”.

Given the registrar’s broad powers under the Act, sanctions can be triggered in a number of situations including when an operator fails an audit, or refuses to comply with the auditor’s requests for information or documents; where there is a jump in an operator’s overall violation rate, even if it does not exceed 100%; where there is the transfer of vehicles in and out of the company; and, where the operator is considered to be “affiliated” with another CVOR holder with a poor safety record.

The registrar may sanction an operator if it is “related” to a person with a poor safety record. In this regard, the Act broadly defines what it means to be “related to a person” and therefore can encompass a variety of relationships, whether in the familial, personal or business sense. For example, a sibling, business partner or ex-spouse of a person whose CVOR has been cancelled could be subject to sanction simply due to the fact of those relationships.

Before a proposed sanction is implemented, the operator has the opportunity to attend a Show Cause Meeting to demonstrate why their CVOR should not be suspended or canceled, or their fleet limited. This is the operator’s best opportunity to make its case and demonstrate that it is not a danger to highway safety, and that the proposed sanction is unnecessary in order to ensure compliance.

Prior to attending the Show Cause, operators should analyze the safety record review provided to them by the registrar, and ensure they understand and are ready to address the Registrar’s underlying concerns. If the operator has not already taken proactive steps to address a poor safety record, it is the Show Cause stage that merits the investment in such steps. Further, operators would also be wise to obtain legal representation at this stage and arrive prepared with an effective action plan to address and resolve the registrar’s concerns within a reasonable time frame.

If the registrar is not convinced following the Show Cause meeting that the operator will operate safely, the proposed sanction will be confirmed. While sanctions can be appealed before the Licence Appeal Tribunal (LAT), this process can be difficult, expensive and grueling, and involves an administrative hearing before an impartial decision maker from the tribunal.

The deputy registrar will be represented by legal counsel at the hearing, and the rules of evidence, administrative law, and principles of natural justice apply. If unsuccessful before the tribunal, the operator can appeal the decision to divisional court as a last resort. However, the sanction is not automatically stayed or temporarily suspended pending a hearing before, and divisional court, and the legal test to show why a temporary stay should be granted is both difficult to meet and rarely successful. Further, an unsuccessful carrier will be ordered to pay the registrar’s costs on the application for the stay.

Operators that find themselves under the highway safety regulator’s gaze are urged to invest in legal advice and representation, especially at the Show Cause stage, to avoid the more costly tribunal and court proceedings that may follow.

Janice Perreira

Janice Perreira is a litigation associate at Fernandes Hearn. This article is intended for information purposes only and does not constitute legal advice.