Compliance requirements for the trucking industry

• Transportation of goods
  • Carriers (cartage, interlining)
  • General freight
    • Consumer goods (food, beverages, clothing)
    • Furniture
    • Livestock
    • Lumber
    • Machine parts
    • Plants
    • Raw materials
    • Refrigerated goods
    • Roofing materials
    • Windows
  • Specialized freight
    • Construction materials
    • Hazardous materials
    • Heavy machinery
    • Oversized items
• Freight transportation arrangement for trucking (establishments primarily engaged in acting as intermediaries (brokers) between shippers and carriers)
  • Intermediaries/brokers
  • Staffing agencies

• Air transportation
• Rail transportation
• Water transportation
• Transit and ground passenger transportation
  • Charter bus transportation
  • School and employee bus transportation
  • Taxi and limousine services
  • Urban transit systems
• Pipeline transportation
• Scenic and sightseeing transportation
• Support activities for transportation (excluding freight transportation arrangement for truck)
• Postal service
• Couriers and messengers
• Warehousing and storage

123 Distribution Co., a company who distributes packaged food products across Canada and whose primary source of business income is more than 50% from trucking activities, contracts ABC Haulage Inc., a CCPC in the trucking industry, to transport shipments from its Ontario warehouse to retail markets. ABC Haulage Inc.’s primary source of income is also more than 50% from trucking activities.

123 Distribution Co. paid a combined total of $8,000 to ABC Haulage Inc. for transportation services provided during July and August.

In this situation:

• Because the total of all payments made to ABC Haulage Inc. exceeds $500 in the calendar year, 123 Distribution Co. must complete a T4A slip and report $8,000 in box 048, Fees for services.
• 123 Distribution Co. must provide the completed T4A slip to ABC Haulage Inc. by the last day of February of the following calendar year to which the slip applies, and must include this amount in its T4A summary.
• 123 Distribution Co. must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.

In October, Heavy Duty Moving Ltd., which specializes in transporting industrial machinery and earns 90% of its income from trucking activities, contracts three CCPCs in the trucking industry to assist with moving oversized generators within Ontario, paying each CCPC $50,000 for services provided in October and November. The primary source of business income of the three CCPCs is also more than 50% from trucking activities.

In this situation:

• Because the total payments made to each CCPC in the trucking industry exceed $500 in the calendar year, Heavy Duty Moving Ltd. must issue three separate T4A slips – one for each CCPC. Each slip must report the respective amount of Heavy Duty Moving Ltd. paid to that CCPC in box 048, Fees for services.
• Heavy Duty Moving Ltd. must provide the completed T4A slips to each CCPC by the last day of February of the following calendar year to which the slips apply, and must include these amounts in its T4A summary.
• Heavy Duty Moving Ltd. must send both the completed T4A slips and the T4A summary to the CRA by the last day of February of the following calendar year.

Note: This example outlines the use of an intermediary (broker). Intermediaries are primarily engaged in arranging and coordinating the transportation and storage of goods between a shipper and a carrier without themselves providing actual transportation and storage services.

LMN Carrier Brokerage Ltd., a freight brokerage that earns 90% of its income arranging freight transportation via truck transportation, is contracted by XYZ Furniture Co., a company whose primary business activity is furniture production, to arrange and coordinate the delivery of freight from Vancouver to Calgary. XYZ Furniture Co. pays $2,500 to LMN Carrier Brokerage Ltd. for its services. LMN Carrier Brokerage Ltd. in turn contracts Haulage Inc., a CCPC that earns most of its income from trucking activities, to make the delivery via truck for a payment of $2,100.

In the case of XYZ Furniture Co.:

• The lift of the moratorium on assessing penalties for failure to report fees for service in the trucking industry does not apply because XYZ Furniture Co.’s primary business activity is furniture production, not trucking activities.
• Under the Income Tax Act, XYZ Furniture Co. is still required to report the fees it paid to LMN Carrier Brokerage Ltd. in box 048 of the T4A slip, even though its primary source of income is not from trucking activities, and it must provide the completed T4A slip to LMN Carrier Brokerage Ltd. by the last day of February of the following calendar year to which the slip applies.
• XYZ Furniture Co. must also include this amount when it completes its T4A summary. It must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.

In the case of LMN Carrier Brokerage Ltd.:

• Because both LMN Carrier Brokerage Ltd. and Haulage Inc.’s primary sources of income are from trucking activities and the payment made to Haulage Inc. exceeds $500 in the calendar year, LMN Carrier Brokerage Ltd. must complete a T4A slip and report $2,100 in box 048, Fees for services.
• LMN Carrier Brokerage Ltd. must provide the completed T4A slip to Haulage Inc. by the last day of February of the following calendar year to which the slip applies and must include this amount in its T4A summary.
• LMN Carrier Brokerage Ltd. must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.

In August, Speedy Z, a courier service with 95% of its income earned from parcel delivery and messenger services, hired Quick Shipping Inc., a CCPC in the trucking industry, to transport office supplies between its distribution centers. Speedy Z made payments totaling $6,000 for services rendered in August.

In this situation:

• The lift of the moratorium on assessing penalties for failure to report fees for service in the trucking industry does not apply to Speedy Z because its primary business activity is courier activities, not trucking activities.
• Under the Income Tax Act, Speedy Z is still required to report the fees it paid to Quick Shipping Inc. in box 048 of the T4A slip and must provide the completed T4A slip to Quick Shipping Inc. by the last day of February of the following calendar year to which the slip applies. It must also include this amount when it completes its T4A summary.
• Speedy Z must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.

In September, Fruits & Vegetables Ltd., a frozen goods warehousing facility that earns its income primarily from storing temperature-controlled goods, hires ABC Freez Inc., a CCPC in the trucking industry, to transport its frozen products from the warehouse to multiple retail locations.

Fruits & Vegetables Ltd. made a total payment of $12,000 to ABC Freez Inc. for transportation services it provided in September and October.

In this situation:

• The lift of the moratorium on assessing penalties for failure to report fees for service in the trucking industry does not apply to Fruits & Vegetables Ltd. because its primary business activity is temperature-controlled goods, not trucking activities.
• Under the Income Tax Act, Fruits & Vegetables Ltd., is still required to report the fees it paid to ABC Freez Inc. in box 048 of the T4A slip, and must provide the completed T4A slip to ABC Freez Inc. by the last day of February of the following calendar year to which the slips apply. It must also include this amount when it completes its T4A summary.
• Fruits & Vegetables Ltd. must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.