How to buy a trucking company in British Columbia: licences, ownership rules and what transfers

If you are working out how to buy a trucking company in British Columbia, start with who regulates the carrier. The provincial statutes this guide draws on are the Motor Vehicle Act, in particular Part 6 on carriers, and the Commercial Transport Act. Commercial Vehicle Safety and Enforcement (CVSE), a branch of the provincial transportation ministry, houses the National Safety Code (NSC) program office, and under the Commercial Transport Act the Insurance Corporation of British Columbia (ICBC) registers and licenses commercial vehicles. Transport Canada notes that provincial and territorial regulations govern the commercial bus and truck industry, except for the rules Transport Canada sets for federally regulated (extra-provincial) carriers, and that the federal government’s authority covers only truck and bus carriers that cross a provincial or international boundary. Because these rules are set province by province, do not carry another province’s rules into a British Columbia deal. This guide covers what the British Columbia sources say and what to ask the seller.

Who regulates a trucking company in British Columbia

Part 6 of the Motor Vehicle Act is headed “Carriers”. It provides that, except as exempted under the Act, a person must not operate a motor vehicle as a business vehicle on a highway unless a safety certificate has been obtained in respect of the carrier. The same subsection lists other conditions, including that the prescribed documents are carried in the vehicle and that proof of financial responsibility has been given or a motor vehicle liability policy has been issued. If a regulation authorizes it, ICBC may grant exemptions from the financial-responsibility condition, and the director from the others, so confirm with CVSE whether any exemption applies to the operation you are looking at, rather than assuming none does.

Cargo insurance and the safety certificate

Another condition in the same subsection of Part 6 is proof that a cargo insurance policy has been obtained for the goods being transported, with that proof provided to the insurance corporation in the prescribed manner. For a buyer, that makes the seller’s current policies a document to read, not a line in the disclosure. Ask whether the cargo policy and the liability coverage are in the name of the corporation you would be buying, and what the insurer says about continuing them after closing. Part 6 does not say whether a safety certificate can be moved to a new owner, so put that question to CVSE in writing before you sign.

Who answers for the people driving the trucks

Part 6 also says that, in construing and enforcing the Act or the regulations, the act, omission or failure of any officer, agent or person acting for or employed by a carrier, if within the scope of that person’s employment, is also deemed to be the act, omission or failure of the carrier. Where that results in an offence, a ticket, summons or other document served under the Offence Act on the person alleged to have acted is deemed to have been served on the carrier. In practical terms, under the Act a carrier answers for the acts and omissions of its officers, agents, employees and others acting for it, within the scope of their employment. If you buy the corporation, ask for the history of tickets, notices and any dispute with CVSE, and ask what the seller knows about each.

Cancellations, the published list and directors

CVSE’s NSC Bulletin 01-2022 (updated November 15, 2022) says that from July 15, 2022 the NSC program office began publishing, monthly, a list of BC carriers cancelled for cause under section 118.96(2)(a) of the Motor Vehicle Act, and that the list only includes carriers cancelled during the previous 36 months. It leaves out carriers cancelled for inactivity, removed on dissolution, deceased, or that voluntarily surrendered their certificate, so absence from the list is not a clean record. The bulletin says applications for new safety certificates associated with carriers on the list, including their directors or officers, will be refused under section 37.03(2)(a) or (b) of the Motor Vehicle Act Regulations. Check the current list for the seller and any related carrier before you go further. If you plan to run the business through a new company, ask CVSE how its association with a listed carrier would be treated.

Vehicle registration, licences and leased equipment

Under British Columbia’s Commercial Transport Act, except as otherwise provided in that Act, before it is used or operated on any highway, an owner of a commercial vehicle, trailer or semi-trailer must register it with ICBC, obtain a licence for its operation, and insure it under a motor vehicle liability policy or give proof of financial responsibility, as the Motor Vehicle Act requires. Where the vehicle is leased and has a lessee, the lessee, instead of the owner, must obtain the licence and insure it. On a deal, match each unit on the fleet list to its registration and note who is the owner and who is the lessee. For any unit registered to someone other than the seller, ask how that unit would come to you.

Reading the carrier’s record

CVSE describes the Carrier Profile as a measurement of a carrier’s on-road performance. It is made up of the carrier’s demographic information, accident record, contraventions and vehicle inspections, and the overall result of NSC carrier audits is also included. CVSE says carriers need a Business BCeID account to access it, and an incorporated company must enter its legal name exactly as shown on the NSC certificate. Ask the seller to open the profile with you, and compare its legal name and certificate details with the corporation in the share or asset agreement. A mismatch is a question to settle before closing.

What to ask the seller for

• The safety certificate, plus the carrier’s profile and the results of any NSC audit, shown by the seller through its own login.
• ICBC registration and licence records for every tractor, truck and trailer, and for each leased unit, the lease and the name shown as lessee.
• Current cargo and liability insurance policies, with the insurer’s written position on continuing cover for a new owner.
• Any correspondence with CVSE or the Director of Commercial Vehicle Safety, including notices, audits and tickets served on the carrier.
• Names of the directors and officers, so you can ask CVSE whether any is associated with a carrier on the cancelled-for-cause list.