Canadian Cabotage and Immigration: A brief summary for foreign motor carriers

Foreign motor carriers entering Canada to deliver freight are subject to Canadian cabotage and immigration rules that restrict the carriage activities they are permitted to engage in while in Canada.

Generally, there are rules that apply to both:

• The equipment of foreign carriers entering Canada
• The drivers operating that equipment

This article provides a brief overview of Canadian cabotage and related immigration rules.

Canadian cabotage rules also apply to marine vessels and airlines, although this summary only addresses rules from a motor carrier perspective.

​Part 1: Equipment

Canadian cabotage rules form a protectionist framework that generally reserves domestic point‑to‑point transportation to Canadian‑based carriers, with only narrow exceptions for movements that are strictly incidental to international traffic. In trucking, the regime operates through customs/tariff rules administered by the Canada Border Services Agency (CBSA) that restrict foreign carriers from participating in Canada’s internal transportation market except in tightly controlled circumstances.

Concept and legal architecture

Cabotage in Canada is understood as the right to provide intra‑national transportation services, and the corresponding restriction on foreign operators performing domestic movements between points in Canada. In trucking, the concept is implemented through customs and tariff rules that govern temporary, duty‑free admission of foreign‑based trucks and trailers and define when a domestic leg is considered part of an international movement rather than prohibited domestic service.

​Jurisdictionally, the Federal government of Canada legislates extra‑provincial and international undertakings, while Provincial governments regulate intra‑provincial operations and safety, often by enforcing federal National Safety Code standards through provincial carrier licensing and Safety Fitness Certificates. The CBSA administers the “international commercial transportation” tariff regime, controlling what foreign‑based motor carriers may do in Canada in the course of delivering freight originating outside of Canada to a delivery point within Canada.

​General prohibition on foreign domestic service

As a starting point, foreign‑based commercial vehicles that enter Canada duty‑free to perform international transportation are prohibited from engaging in purely domestic point‑to‑point moves between two Canadian locations. The policy objective is to protect Canadian carriers from foreign competition in the domestic market, while still permitting efficient cross‑border and international carriage.

​In trucking, this prohibition captures:

• Carriage of domestic freight between Canadian origin and destination by a foreign‑based truck, even where that truck is otherwise engaged in international movements
• “Topping up” an international load with purely domestic freight between Canadian points

​​Incidental domestic use: Narrow trucking exception

In Canada, there is a narrow window for “transportation incidental to the international movement of the goods,” under which a foreign‑based conveyance, container or trailer admitted duty‑free may perform a limited domestic move between Canadian points. “Transportation incidental to the international movement of the goods” is defined as transportation between points in Canada that occurs immediately before or after the vehicle is used for international commercial transportation. This exception is deliberately constrained and is treated as an overlay on the general prohibition.

​The key constraints are:

• Temporal proximity – the domestic leg must occur immediately preceding or immediately following the international movement
• Route consistency – the incidental move must follow a route that is “similar and consistent” with the destination in Canada where the export load will be picked up or where the international movement begins or ends
• One‑move rule – a foreign‑based conveyance is limited to one incidental domestic movement per international journey
• Purpose‑based limits – the conveyance must not have entered Canada for the purpose of an in‑transit move through Canada, and the domestic leg cannot be justified where the primary movement is Canada–U.S.–Canada or U.S.–Canada–U.S. in‑transit; in those cases, incidental domestic use is expressly prohibited

As discussed below, it is also important that the driver be permitted to perform the delivery between the two Canadian points in accordance with applicable Canadian immigration laws.

​​Enforcement, penalties and practical compliance

Enforcement of cabotage rules is primarily front‑line. CBSA officers review conveyance documentation, cargo control documents and itineraries at ports of entry and may challenge domestic movements that appear inconsistent with an international itinerary. For trucking, non‑compliance can lead to assessments of duties and taxes, seizure or forfeiture of conveyances and cargo and administrative monetary penalties under the customs regime.

​From a compliance standpoint, carriers must rigorously document the international nature of trips, the scheduling and routing of export loads and the use of the one‑move incidental exception, recognizing that CBSA will interpret cabotage exceptions narrowly. Shippers and logistics providers should build cabotage analysis into routing and contracting decisions, ensuring that foreign‑based carriers are not asked to perform domestic Canada‑to‑Canada moves except where the strict incidental conditions are met.

​Part 2: Drivers

Foreign truck drivers who enter Canada as part of delivering an international cargo load are subject to Canadian immigration laws with respect to their work in Canada. Such drivers are usually treated as temporary business visitors rather than as foreign workers, so long as they meet specific conditions under Canadian immigration law and the Canada-United States-Mexico Agreement (CUSMA) (for U.S. and Mexican citizens). They are exempt from needing a work permit if their activities are limited to cross‑border carriage of goods in international traffic and they are not entering the Canadian labour market.

​Status and work‑permit exemption

Truck drivers from the United States or Mexico can enter as CUSMA business visitors when they are transporting goods in international commerce (for example, from the U.S. to a consignee in Canada).

​Business visitors do not require a Labour Market Impact Assessment (LMIA) or a Canadian work permit if they only perform eligible international transportation activities and are in Canada for a temporary period.

​Core eligibility conditions (CUSMA business visitor)

Canada will allow temporary entry, without a work permit, for CUSMA business visitors who meet Canada’s entry requirements and show:

• Proof of U.S. or Mexican citizenship
• Documents describing the business purpose
• Evidence the activity is international and not entry into the Canadian labour market (i.e. pay, principal place of business and profits are primarily outside Canada).

To confirm international activity, an oral declaration is normally accepted – if further proof is needed, an employer letter usually suffices.

​General immigration/border requirements

All foreign truck drivers must be admissible under the Immigration and Refugee Protection Act (Canada) (i.e. no serious criminality or medical inadmissibility) and must satisfy the border officer that they will leave Canada at the end of their temporary stay.

​Depending on nationality, they may require a temporary resident visa or electronic travel authorization in addition to satisfying business‑visitor criteria.

​Participants in CBSA’s Commercial Driver Registration Program must comply with the Immigration and Refugee Protection Act (Canada) and carry appropriate identification and immigration documents at all times.

​Interaction between Cabotage and Immigration

Immigration authorization is separate from cabotage. Even when admitted as business visitors, foreign drivers cannot lawfully perform domestic point‑to‑point moves in Canada that would amount to entering the Canadian labour market.

​Their activities must stay within international movements or they risk non-compliance with both customs rules (in respect of their equipment) and immigration laws (in respect of themselves).

MLT Aikins provides comprehensive service for the rail, air and trucking transportation industries, acting for carriers, shippers, airports and various levels of government. For more information about navigating cabotage or immigration rules and requirements, feel free to reach out to Sean MacLachlan, Reis Pagtakhan or any other members of our leading transportation or immigration practice groups.

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