Putting brakes on ‘chameleon carriers’

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This article was published 06/01/2025 (250 days ago), so information in it may no longer be current.

For years, Manitoba trucking companies flouting safety rules have avoided repercussion by starting anew.

Newly enacted provincial regulations aim to crack down on such companies, commonly known as “chameleon carriers.”

“(We’ve) seen it over and over and over again,” said Aaron Dolyniuk, executive director of the Manitoba Trucking Association.

A business will receive a poor safety rating from provincial inspectors and may be suspended from operating. Instead of making changes to improve the rating, its owners abandon ship and start a new company with the same trucks, employees and practices.

New firms begin with a “satisfactory unaudited” ranking on their safety fitness certificate. They’ll continue with the label until their first audit.

It’s hard to know how many chameleon carriers Manitoba holds, but it’s “a large issue in our industry,” Dolyniuk said.

It goes beyond semi-trucks. Commercial bus carriers NCN Thompson Bus Ltd. and Thompson Bus & Freight Ltd., who’ve been accused in past years for running buses without adequate heat in the winter, had the same founders and operated at different times.

Manitoba’s new rules began Jan. 1.

Now, Manitoba Transportation and Infrastructure (MTI) can check for similarities between new and old transportation companies before issuing a safety fitness certificate.

New firms wanting a certificate apply to government. Officials can then check if the fledgling company’s officers and directors control or have controlled another transport business over the past 12 months.

MTI can also check if the new directors and officers are closely related to people running other trucking and bus companies — spouses, common-law partners, children, parents and siblings.

New companies will be flagged if 50 per cent or more of their regulated vehicles and/or drivers are used by another firm during registration or over the past 12 months, among other things.

Companies deemed chameleon carriers can be assigned a “conditional” safety rating, which brings heavier government scrutiny than the “satisfactory unaudited” label previously given automatically, an April 2024 document on the then-proposed regulation outlines. Manitoba uses National Safety Code ratings found throughout Canada.

“It’s a good step,” Dolyniuk said. “I think by looking at close relatives and looking at equipment, by being able to track where that equipment goes, that’s really going to draw that connection.”

It’s not enough to Mike Jones, a former president of a major Manitoba-based trucking company. (The Free Press agreed not to name the company because, Jones said, there have been repercussions, such as vandalism, against businesses who speak out.)

The net hasn’t been cast wide enough to catch chameleon carriers, Jones said: “It could be a cousin … everybody seems very interconnected around this underground economy.”

Further, it’s hard to know who’s driving for such companies when many avoid paying employee costs by labelling staff as contractors, Jones stated.

“(These regulations are) certainly going as far as any other province has been prepared to go,” said Sven Hombach, a regulatory partner with Fillmore Riley LLP who specializes in the transportation industry. “It reflects that there needs to be a balancing act to protect safety but still allow companies to incorporate businesses.”

For example, the regulation puts the onus on a company to “explain away” why its directors are related to directors of a poorly rated operation, but it doesn’t immediately block the new business from a safety certificate, Hombach outlined.

Trucking companies violating safety regulations often do so to cut costs. Many are caught with their drivers working longer hours than legally allowed, Dolyniuk said.

“It’s sometimes cheaper to simply start over and reincorporate as a new company rather than meeting those safety requirements,” Hombach noted.

Chameleon carriers are dotted throughout the country. It makes total abolition much harder, Dolyniuk noted. Industry members have been sounding alarm bells over companies shuttering in one province only to open under a new registered number in another.

Both Dolyniuk and Hombach believe regulations like Manitoba’s will eventually be found in every province. Ontario and British Columbia have similar legislation.

The 2018 semi-truck and bus crash in eastern Saskatchewan that killed 16 people linked to the Humboldt Broncos junior hockey team led to a Canada-wide look at safety in the transportation industry, Hombach relayed.

The United States created a national program to identify chameleon carriers more than a decade ago. In 2019, a Manitoba auditor general report advised the province to take measures to prevent chameleon carriers.

The Progressive Conservatives proposed legislation to crack down on chameleon carriers in 2023; it included assigning conditional safety ratings to businesses suspected of being chameleons. The NDP government has enacted the current regulations under the Highway Traffic Act. Neither party responded to questions and interview requests by print deadline.

Manitoba Public Insurance won’t see immediate changes due to the regulations, spokeswoman Kristy Rydz wrote in a statement.

gabrielle.piche@winnipegfreepress.com