A number of trailer manufacturers in the U.S. have been contacted by Transport Canada regarding their pre-clearance authorization. Many other manufacturers have been contacted by private companies soliciting business as designated importers. Transport Canada has been working to address the large number of “Importers of Record” (Dealers) in an effort to reduce the number of applications for pre-clearance. Because of this there has been a lot of confusion as to what they are changing. Part of this confusion has been prompted by companies attempting to gain business and not fully disclosing all the options to U.S. trailer manufacturers. Hopefully, this will help provide more detail so manufacturers can make fully informed decisions. In a recent communication from Transport Canada they summarized the following:
•   Transport Canada’s Appendix ‘G’ pre-clearance
program was originally intended as a tool to list elite
professional companies (foreign manufacturers and
their Canadian importers), that are capable of
consistently manufacturing and importing Canadian
certified vehicles to the point where scrutiny from
Transport Canada is not required, hence the term ‘pre-clearance’.

•   The use of the pre-clearance program by foreign
manufacturers to list retail dealers is not what the pre-
clearance program was intended for, as most retail
dealers do not qualify for pre-clearance.

•   If the foreign manufacturer wishes to export vehicles
into Canada using the pre-clearance program, the
preferred solution is the establishment by the foreign
manufacturer of a Canadian branch of their company to
deal with regulatory issues, compliance, recall matters,
etc.

•   Transport Canada is aware that some entities are                                  
offering a service to foreign manufacturers to act as the
‘Designated Importer’ of the company for pre-clearance
purposes.

•   For Transport Canada to accept this arrangement, a
Designated Importer must be able to act in the same
capacity as a branch of the foreign manufacturer in
order to qualify for the pre-clearance program.

•   Whether the foreign manufacturer chooses to establish a
branch of the company or delegate a Designated
Importer to act in this regard, retail [dealers] do not and                       
should not be involved in the importation process.
The retail dealers should simply place orders and
receive trailers. Issues regarding billing, taxes, duties,
etc., must be resolved between the foreign manufacturer
and the Designated Importer.

•   If Designated Importers cannot meet these and other
conditions of pre-clearance, they will not be eligible for
inclusion in the pre-clearance program.

For the most part, Transport Canada is not adding retail importers onto Transport Canada’s pre-clearance list. Instead, one option is for these importers to import compliant vehicles on a case-by-case basis by supplying the following information:

•      A list of VIN numbers included in the shipment

•      Front side and back photographs or drawings of the
trailer models in the shipment showing the required
lamp locations

•      Photographs of the compliance label and tire label as
affixed by the manufacturer to the trailers in the
shipment

•      Photographs of the tire and rim markings and
evidence of conformity to the applicable sections of
TSD 110 - Tire Selection and Rims for Motor Vehicles
With a GVWR of 4536 KG or Less, and/or subsection
S5.5 of TSD 120 – Tire Selection and Rims for Motor
Vehicles With a GVWR of More Than 4536 KG. 

To avoid delays, importers using the case-by-case importation method should provide the requested compliance information to Transport Canada at least two to three weeks prior to vehicle importation. If the information supplied demonstrates the conformance of the vehicles to the applicable safety standards, an importation authorization letter will be provided to the importer for the individual vehicle shipment for importation purposes.

Transport Canada has provided an explanation as to why they are making these changes. The following is an extract from an e-mail from Transport Canada:

“The Motor Vehicle Safety Act is the name of the law in Canada that regulates the importation of vehicles into Canada. Since this is domestic law, it applies to the Canadian based importer and requires knowledge of the applicable regulations and the ability to manage the other responsibilities associated with vehicle importation under the law.
The problem with retail dealers is that in general, they do not have the knowledge of the regulations to verify that the trailers they are importing comply with the regulations.  The Canadian importer has to be able to ‘check’ the manufacturer’s work and then consult with them if changes are needed. The Canadian importer is also supposed to be on top of any regulation changes so that the foreign manufacturer can be made aware of these changes. This knowledge is a prerequisite for an importer to be listed on the ‘trusted traders’ list which is known as the ‘pre-clearance’ list. To summarize, retail dealers generally do not qualify for pre-clearance and can use the case-by-case system of importation.

For foreign manufacturers wishing to sell vehicles in Canada under the pre-clearance program, the ideal solution, is to set up an arm of the foreign manufacturer in Canada to act as the manufacturer’s representative for vehicle importation and to assume the responsibilities associated with vehicle importation under the Motor Vehicle Safety Act (Canada).  This would also allow the manufacturer to maintain control over their vehicles in Canada. Of course, this arm in Canada would have to have the qualities of a qualified pre-clearance importer described above. Depending on the needs of the foreign manufacturer, another possible option may be the designation of a qualified importer such as the importing associations that we have provided below in this excerpt from a notice that we have been sending to other foreign manufacturers:

“If your company wishes to continue with its pre-clearance listing to sell its vehicles in Canada, you will need to designate a qualified pre-clearance importer. [Some foreign manufacturers have established a Canadian based division of their company for this purpose; some use importing companies or business; while others have appointed a few select dealers that have the capabilities described above to act as their designated importers.] Under any one of these scenarios, one (or a manageable few) Canadian based companies are listed as the importer of record on importation documents and Canadian retail dealers continue to receive product directly from the foreign manufacturer without the regulatory responsibilities associated with vehicle importation in Canada. Issues concerning the payment of the taxes, etc., are worked out between the foreign manufacturer and the importer of record.”

By Clint Lancaster
NATM Technical Director

NATM is continuing to work with Transport Canada in their efforts to realign their importation process. Transport Canada accepted our invitation to have an official speak at the NATM Annual Convention in February. This provided a good opportunity to learn first-hand directly from the source. Also, we are actively working with Transport Canada to align NATM’s ‘Compliance Verification Program’ with the requirements of subsection 5(1)(g) of the Canadian Motor Vehicle Safety Act.  While Transport Canada officials were at the NATM Annual Convention we met with them to move forward on this alignment of compliance. Further, both the compliance committee and the technical committee will be working on this during the upcoming year.