On the front line: Keeping supply chains moving despite COVID-19

March 31, 2020 | Jaclyne Reive, Louis Amato-Gauci, Syed Rizvi

Canada’s supply chains must continue to move across the country and around the world, and our clients in the transportation and logistics industries are on the front line in this endeavour. We salute their efforts, recognizing that they face unprecedented challenges as a result of the COVID-19 pandemic.  This bulletin is being written in line with the rapidly changing responses to the ongoing situation. The aim is to provide a high level overview of key developments and our analysis of the complexities and nuances involved. For further details and guidance, we invite readers to contact any member of Miller Thomson’s Transportation & Logistics team.

Canada – United States Border Closure

As of midnight on March 21, 2020, the Canada-United States border became closed to “non-essential travel”. This order will remain in effect for 30 days and can be renewed prior to its expiry if needed. On March, 25, 2020 Canada further announced that it will be invoking the Quarantine Act S.C. 2005, c.20 to impose mandatory self-isolation for all travellers entering the country, including those entering Canada from the United States. Although the definition of what is considered “non-essential”  for the purposes of this shut down had been worded quite broadly, the Prime Minister’s Office has stated quite clearly that supply chains and the movement of freight will not be effected by these measures:

“The United States and Canada recognize it is critical we preserve supply chains between both countries. These supply chains ensure that food, fuel, and life-saving medicines reach people on both sides of the border. Supply chains, including trucking, will not be impacted by this new measure.”[1]

This exemption is further reflected in the Notification of Temporary Travel Restrictions Applicable to Land Ports of Entry and Ferries Service Between the United States and Canada, a rule invoked by the U.S. Customs and Border Protection on March 24, 2002, which states that “Individuals engaged in lawful cross-border trade (e.g. truck drivers supporting the movement of cargo between the United States and Canada.)” are considered “essential”.[2] Workers in the transportation industry are required to practice physical distancing and enhanced personal hygiene. They are encouraged to self-monitor closely, and must self-isolate upon exhibiting any symptoms.

State of Emergency Declarations and Priority/Essential Businesses

By March 27, 2020, all Canadian provincial and territorial governments had enacted state of emergency or state of public health emergency legislation. Many of these jurisdictions subsequently ordered restrictions on public gatherings and travel, and ordered the closure of all businesses providing non-essential services, in an effort to “plank the curve” on the transmission of COVID-19, to borrow an expression from Canada’s Chief Public Health Officer, Dr. Theresa Tam.

In general terms, transportation, logistics, supply chain and distribution companies do qualify as “essential” or “priority” businesses, and as such they are exempt from these shut-down orders. However, the lists of exempt businesses and services vary dramatically from one province or territory to another, and they are constantly subject to further amendments, as governments struggle to anticipate and respond promptly to new developments and emerging issues in the fight against COVID-19.

There have been missteps along the way.  For example, when the Province of Québec originally  released its list of priority businesses on March 23, 2020, it restricted the exemption solely to those companies engaged in the transportation, storage and distribution of essential goods (transport, entreposage et distribution de marchandises essentielles).   This was presumably intended to restrict the exemption to carriers and 3PLs who were involved in moving foodstuffs, pharmaceuticals and medical supplies.  However, the list was amended the following day to read: transportation storage and distribution of goods (transport, entreposage et distribution de marchandises), without qualification.[3]

In addition to the above, New Brunswick, Newfoundland & Labrador, Prince Edward Island, Nova Scotia, Nunavut and the Northwest Territories have all closed their domestic borders to non-essential travel, and have ordered residents returning from other parts of Canada or foreign jurisdictions to self-isolate for 14 days. Those engaged in essential services – including truck drivers – may enter these jurisdictions to deliver goods, without being required to self-isolate, provided that they remain healthy and practice social distancing and sanitary practices.

The closure of provincial domestic borders is unprecedented, and may not be immune to a constitutional challenge, given that extra-provincial transportation undertakings fall within federal jurisdiction, pursuant to subsection 92(10)(a) of the Constitution Act, 1867.[4] It is also worth noting that Canada’s federal, provincial and territorial governments have committed themselves, through the Canadian Free Trade Agreement, to “reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services, and investments within Canada and to establish an open, efficient, and stable domestic market”; however, they also reserved the right to take any measures necessary to protect human, animal, or plant life or health within their respective territories, provided they take into account the objective of minimizing negative trade effects.[5]

Given that there is currently no uniform federal definition of essential and non-essential services and products, questions continue to arise in various parts of the country with regard to certain types of shipments.  We see this most commonly in connection with e-commerce, and the final-mile delivery of non-essential consumer goods.  This lack of clarity prompted the Canadian International Freight Forwarders Association to write directly to the Premiers of Ontario and Québec, highlighting the confusion, uncertainty, and difficulties caused by varying definitions around essential and non-essential services, and reminding them how deeply integrated Canada’s supply chains are:

“If a company is closed because they are deemed non-essential, they will not be able to receive the freight that is currently in transit to their warehouse. Ocean ports, rail yards, and trucking terminals will quickly become overwhelmed with the business of undeliverable non-essential freight, which will greatly hamper the delivery of essential products that Canadians need during this crisis.”[6]

We can expect to see further developments in this critical area.  Here are some key takeaways for our transport and logistics clients:

  • Carriers, warehouse operators and freight forwarders should carefully review, and frequently check for updates to, the lists of essential businesses and services in their home provinces and territories, and in all jurisdictions that their cargo must transit, from the point of origin to its destination.
  • Manage customer expectations by keeping them fully-apprised of changes in the regulatory landscape and health and safety protocols that may affect service levels, and change the ways in which they interact with delivery personal.  Consider asking customers to waive liability for delays or missed deadlines due to the heightened risk of enforcement activity while the state of emergency remains in effect across Canada.
  • Assist police and other enforcement officers, by providing your personnel with a “safe passage” letter on company letterhead, confirming that they are engaged by the company, specifying the role played by the individual, and identifying the basis upon which the services being provided are essential, priority services.

Trusted Traders

In addition, to promote social distancing and relieve some of the burden, all Trusted Traders and Partners in Protection members who are up for re-evaluation will maintain their status during this time as long as they remain compliant.[7] Similarly, commercial drivers holding a Free and Secure Trade (“FAST”) card who submitted an application for renewal prior to the expiry of their card will maintain their membership and remain in active status for 18 months beyond the current expiry date.[8] All FAST interviews schedules between March 19, 2020 and May 1, 2020 have been postponed.

Service Canada Closure and Provincial Extensions

Similar to the above, on March 26, 2020, the federal government announced the closure of all physical Service Canada centres in order to promote social distancing and limit the spread of COVID-19.[9] All services still remain accessible through the online website. In addition, Ontario announced the closure of all full-time DriveTest Centres and part-time Travel Point locations on the advice the province’s Chief Medical Officer. All drivers licenses, vehicle registrations and carrier products and services that expired on or after March 1, 2020 will continue to remain valid and legal past their expiry until further notice.[10] The approaches taken by the other provinces vary but most are making similar sorts of accommodations in order to promote social distancing. For example, Québec has also asked the police forces to show administrative lenience and avoid penalizing drivers whose driver’s licenses have expired.

Some notable developments in the other provinces are as follows:

  • British Columbia has suspended all commercial and passenger road tests until further notice. In addition, they have temporarily suspended Driver Medical Examination Reports. As of March 25, 2020, all customers whose BC Driver’s licenses are nearing expiry or expired, are being asked to renew or replace their licenses by phone to limit the need for in-person contact. Although the Service BC offices and ICBC Driver Licensing offices remain open, they have limited the in-person offerings to core services only and have imposed health screening requirements and capacity restrictions.[11]
  • As of March 19, 2020, Alberta suspended all commercial and passenger road tests. No new appointments are being scheduled but they are developing an emergency process for road tests in order to support Class 4 tests that align with providing essential services. They have also extended all upcoming expiry dates for driver’s licenses, identification cards, vehicle registrations, other permits and certificates until May 15, 2020.[12]
  • Saskatchewan suspended all commercial and passenger road tests starting March 18, 2020 and no new appointments are being scheduled at this time. Medical extensions are being granted on a case by case basis. Written tests continue, but they are rescheduling some tests and booking new tests with fewer customers to ensure adequate spacing between customers. Customers are being asked screening questions to determine if they’re well enough to continue with their appointment. [13]
  • Québec has suspended all commercial and passenger road tests until further notice but exceptions are being granted if the license is related to an “essential” service. In addition they have suspended all medical assessments.[14]
  • New Brunswick has discontinued all government services, with the exception of essential services, until further notice. [15]
  • Nova Scotia has suspended all commercial and passenger road tests and has extended all dates for driver licenses and vehicle registrations expiring in March, April and May to August 31, 2020.[16]
  • Prince Edward Island has suspended all commercial and passenger road tests and has granted a 60 day extension for all medicals, driver licenses and vehicle registrations. [17]
  • Newfoundland and Labrador has suspended all written and practical driver examinations until further notice and have moved all renewal requests to be submitted online. No automatic extensions are being given at this time.[18]
  • The Northwest Territories have suspended all commercial and passenger road tests and have moved all vehicle registration and driver’s license renewals online.[19]

This publication is intended to be a high level overview of the applicable legal considerations and not legal advice for any specific business. Businesses are encouraged to contact a member of Miller Thomson’s Transportation & Logistics team for specific advice.


[1] Office of the Prime Minister, “U.S.-Canada joint initiative: Temporary restriction of travellers crossing the U.S.-Canada border for non-essential purposes”, March 20, 2020. Online: <https://www.cbsa-asfc.gc.ca/agency-agence/pm-covid19-eng.html>

[2] Federal Register, “Notification of Temporary Travel Restrictions Applicable to Land Ports of Entry and Ferries Service Between the United States and Canada”, online: <https://www.federalregister.gov/documents/2020/03/24/2020-06217/notification-of-temporary-travel-restrictions-applicable-to-land-ports-of-entry-and-ferries-service>

[3] Gouvernement du Québec, “Minimization of non-priority services and activities”.  Online:  <https://www.quebec.ca/en/health/health-issues/a-z/2019-coronavirus/essential-services-commercial-activities-covid19/#c48428>

[4] 30 & 31 Victoria, c. 3 (U.K.).

[5] Online: https://www.cfta-alec.ca/wp-content/uploads/2020/03/CFTA-Consolidated-Text-Final-English_March-19-2020.pdf

[6] “CIFFA calls for uniform federal definition of essential and non-essential services and products.”  Canadian International Freight Forwarders Association, 25 March 2020. Press release. Online: https://www.ciffa.com/ciffa-seeks-definition-of-essential-services/

[7] Canada Border Services Agency, “Free and Secure Trade”, online: <https://www.cbsa-asfc.gc.ca/prog/fast-expres/menu-eng.html>

[8] Ibid.

[9] Government of Canada, “COVID-19: In person Service Canada Centres to be closed”, online: <https://www.canada.ca/en/employment-social-development/news/2020/03/covid-19-in-person-service-canada-centres-to-be-closed.html>

[10] Ministry of Transportation, “Extended validation periods for driver, vehicle and carrier products and services”, online: <https://www.ontario.ca/page/extended-validation-periods?_ga=2.217560150.1112353554.1585431363-713900977.1585315633>

[11] Insurance Corporation of British Columbia, “March 30: Our update on ​COVID-19 (coronavirus)”, online: <https://www.icbc.com/about-icbc/contact-us/Pages/covid-19.aspx>

[12] Alberta Transportation, “COVID-19 info for Albertans”, online: <https://www.alberta.ca/coronavirus-info-for-albertans.aspx#toc-6>

[13] Saskatchewan Government Insurance, “COVID-19 response”, online: <https://www.sgi.sk.ca/news?title=covid-19-response>

[14] Société de l’assurance automobile du Québec, “COVID-19: FREQUENTLY ASKED QUESTIONS”, online: <https://saaq.gouv.qc.ca/en/newsroom/covid-19-frequently-asked-questions/>

[15] New Brunswick Department of Public Safety, “SNB Service Centres are closed at this time”, online: <https://www2.snb.ca/content/snb/en.html>

[16] Nova Scotia Transportation and Infrastructure Renewal, “Closures, cancellations and service changes”, online: <https://novascotia.ca/closures/#offices>

[17] Prince Edward Island Department of Transportation, Infrastructure and Energy, “Drovers License Fees”, online: <https://www.princeedwardisland.ca/en/information/transportation-infrastructure-and-energy/drivers-licence-fees>

[18] Service Newfoundland and Labrador, “Online Services (eServices)”, online: <https://www.gov.nl.ca/snl/online-services/online-services/> and <https://www.thetelegram.com/news/local/newfoundland-and-labrador-covid-19-related-cancellations-and-postponements-423745/>

[19] Northwest Territories Department of Infrastructure, Compliance and Licensing, “Driver and Vehicle Services”, online: <https://www.inf.gov.nt.ca/en/services/driver-and-vehicle-services>

 

Miller Thomson is closely monitoring the COVID-19 situation to ensure that we provide our clients with appropriate support in this rapidly changing environment. For articles, information updates and firm developments, please visit our COVID-19 Resources page.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at privacy@millerthomson.com.

© 2020 Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting newsletters@millerthomson.com.