Ontario’s roadbuilding construction sector is paying close attention to the progress of an Ontario Ministry of Transportation proposal to change the definition of a roadbuilding machine under the Highway Traffic Act.
The proposal has been posted on the province's regulatory registry since September and the comment period, which includes responding to a survey, closes Dec. 31.
The revision could mean some companies will encounter hefty new costs if their equipment no longer qualifies under the definition and must instead meet commercial vehicle standards, explains Ashley De Souza, Ontario Road Builders' Association government relations director.
"We're quite worried of the impact it's going to have on certain companies," he says. For some suppliers and contractors it could mean five to 35 per cent of their fleets will face a commercial designation.
The provincial government announced plans to revamp the definition in its March budget.
Currently, the act describes roadbuilding vehicles as "a self-propelled vehicle of a design commonly used in the construction or maintenance of highways."
Vehicles that fall under the classification are exempt from the many requirements commercial vehicles must meet under the act, such as: obtaining licence plates, registration and insurance, a driver's licence to operate; meeting provincial vehicle equipment standards and submitting to safety inspections; paying fuel tax; and enrolling in Commercial Vehicle Operator's Registration (CVOR), a provincially managed system that tracks and rates the on-road safety performance of buses and trucks over a certain weight.
By moving some vehicles that currently fall under the road building machine, such as mobile cranes, concrete pumpers and hydrovacs, into the commercial class the province estimates it will raise $25 million in its 2016/2017 fiscal year when the change is slated to come into effect.
But shifting to a new definition without making some other adjustments could pose several challenges for the industry, De Souza says, and the Road Builders' plan to file comments on the proposal.
Not only is there a significant jump in cost for companies, but the vehicles themselves don't align well with the terms of the province's current CVOR system, especially those which might travel short distances on roads but, because of other considerations, be lumped into the same risk category of a long-haul truck which spends long hours on highways.
He uses the example of a hydrovac.
"At a quarter capacity, they will already be over the weight limit under the CVOR system, so if you are taking it on the road and you even go half way to capacity, you're already under violation," he explains.
Problems with a CVOR rating could detrimentally affect a company's insurance rates and also its ability to compete on contracts where a safety rating is a factor in assessing bids, he notes.
"We are happy to participate in the process but want a review of the CVOR system first," says De Souza. "It's something that is long overdue and it is something that we have been advocating for about four or five years now."
The system has been a long simmering issue for the industry and other operators of vehicles at lower speeds and mileage since changes were introduced in 2007.
Industry is working on trying to find a solution, he says, and would like to see that in place before more vehicle types are streamed into the CVOR system.
Giovanni Cautillo, Ontario Sewer and Watermain Construction Association executive director, points out that vehicles that no longer qualify for the road building exemption would also have to pay the MTO's fuel tax. "Those costs literally escalate overnight," he says. "This is all going to be a significant hit for the contractors."
Cautillo says his organization, which has filed comments, is calling for the province to introduce the changes gradually and to add another classification under the CVOR for the vehicles removed from the road building machine category.
Like anyone else, government bodies have to consider their bottom line and the revision is essentially a quick way to increase the coffers, he says. "We can live with that as long as it's implemented in a systematic format that allows our contractors to see it come down the pipeline."
David Bradley, Ontario Trucking Association president, which has pushed for the change in definition, says all trucks, regardless of vocation, should pay for their use of the highways. "You can't base the tax system on what industry you have to be in," he says.
Many of his association's members also haul construction materials for the industry and two years ago the province imposed a 70 per cent increase in plate fees. "That really motivated us to say, 'hey, wait a minute now, if we're going to see these sorts of increases, then everybody should be paying their fair share.'"
His organization has submitted comments about the proposed change and estimates that the move will generate an extra $50 million for the province annually in registration fees and the provincial fuel tax. It will also ensure greater safety on the road, he says.
Bob Nichols, MTO spokesperson, says by email that by the end of November, the ministry had received 14 responses to the survey accompanying the proposal.