Commercial carrier safety certificates on a sale in Alberta

Operating a trucking or bus business in Alberta can require a safety fitness certificate, and that certificate is issued to a registered owner of commercial vehicles. It is issued by the Registrar under the Commercial Vehicle Certificate and Insurance Regulation (Alberta Regulation 314/2002), made under the Traffic Safety Act. For a buyer, the question is whether the seller’s certificate, rating and history carry across or whether the buyer has to qualify on its own. This guide walks through what the regulation says about who holds the certificate, what an applicant must show, and what follows a carrier from one owner to the next.

When Alberta requires the certificate

Section 2 of the regulation prohibits operating a commercial vehicle used to transport goods on a highway, registered at or above the gross weight it sets, unless the operation is carried out under the authority of a safety fitness certificate. It applies the same rule to passenger vehicles at or above the seating capacity it sets, and section 2(2) covers vehicles registered outside Alberta where their own jurisdiction requires an equivalent authority. Section 2(3) lists exemptions, including some agricultural and forest-product hauling, and the Registrar may exempt a vehicle on terms. Alberta’s carrier page adds that, in deciding whether a carrier is regulated under federal or provincial rules for the certificate, Alberta considers where the carrier operates and how its work connects to activities outside Alberta, and that a carrier that changes its operating status will be required to comply with different requirements.

The certificate belongs to the registered owner

Section 3 requires the registered owner of the vehicles to apply for the certificate, and section 8 says that while the holder remains the registered owner, the certificate authorizes the operation of all the commercial vehicles requiring one of which it is or becomes the registered owner. That wording matters in two kinds of sale. In a share purchase where the company stays the registered owner, the question is what the change of control does to its profile and rating. In an asset purchase where a new owner is registered for the trucks, section 3 points to that owner applying. The sections read do not say a seller’s certificate moves with the trucks, so ask the Registrar in writing how a buyer should proceed.

What a new applicant must show

Under section 4, an application must be on the Registrar’s form with the prescribed fee. It must confirm a written inspection, maintenance and repair program and a written safety program, and confirm that someone is designated in writing as responsible for each. It must include evidence of the insurance the regulation requires, contact details to set up a carrier profile, and the applicant’s principal place of business in Alberta. Under section 4(2) of the Commercial Vehicle Certificate and Insurance Regulation, the Registrar may not issue the certificate unless satisfied that an appropriate individual has, on the applicant’s behalf, completed the mandatory safety and compliance course and passed the knowledge test within 180 days before the application. For a corporation, that individual is an officer, or an employee the Registrar accepts where it would be impractical for an officer to take the test. Under section 6 of the Commercial Vehicle Certificate and Insurance Regulation, the Registrar considers the application, any carrier profile and any relevant rating of the applicant in Alberta and elsewhere, and may issue a certificate for a term not exceeding 3 years, with or without terms and conditions, or refuse it.

Ratings and the carrier profile

The Registrar rates a certificate holder satisfactory, satisfactory unaudited, conditional or unsatisfactory (and may upgrade a satisfactory rating to excellent), and under section 34(2) an unsatisfactory rating cancels any existing certificate. Section 34(3) says a person’s rating continues whether or not that person is the registered owner of a commercial vehicle. The carrier profile holds, among other things, convictions, administrative penalties, accidents, inspections by a peace officer, the rating, and written communications requiring action with the person’s responses. Section 36.5 entitles a person to inspect its own profile, so ask the seller to obtain and share it. Section 33(2) also lets the Registrar, in deciding a rating, consider whether a registered owner is or has been associated with, or a director of or official with, a carrier rated conditional or unsatisfactory in Alberta or elsewhere, so ask what links the buyer and its principals have to other carriers.

Dormancy and vehicle inspections

Section 9 of the Commercial Vehicle Certificate and Insurance Regulation provides that a certificate automatically expires if its holder has no vehicle requiring one registered in its name for 12 continuous months, and the Registrar may cancel one, with written notice, if satisfied the holder has not operated a commercial vehicle under it for at least 12 months. A gap between a seller shutting down and a buyer starting up is therefore worth dating. Alberta’s commercial vehicle inspection page adds that registered owners must ensure each bus, truck, light truck or trailer they own receives the required inspection, and that section 19 of the Vehicle Inspection Regulation requires all commercial vehicles to have a valid inspection certificate and decal. Check that these are current for every unit in the sale.

• The seller’s current certificate, its conditions and expiry date, and the seller’s own copy of its carrier profile.
• Whether the deal is a share or an asset purchase, and who will be the registered owner of each vehicle on the closing date.
• The buyer’s own written maintenance and safety programs, designated people, insurance evidence and passed knowledge test, ready before the application.
• The safety fitness rating and any conditions, plus any ratings tied to the buyer’s directors or officers elsewhere.
• Whether the carrier runs outside Alberta, and what the federal and other provinces’ rules require for that work.

For wider checks on a trucking purchase, see what to check before buying a trucking company and the trucking business buyer checklist.