How to start a trucking business in Canada
Truckers play a very important role in Canada’s economy, helping get important goods and cargo to destinations across the country. There are many ways to work in the trucking industry in Canada, but for many people, running your own trucking business is particularly appealing. By running your own business, you get to choose which jobs you take on, set your own schedule, and expand your income as your company grows.
Before you hit the road, you’ll need to make sure your business meets the financial and legal requirements necessary to operate in Canada. You’ll also need to make sure you have an operations plan in place. If you’re looking to launch your own trucking company in Canada, here’s everything you’ll need to know to get started.
Start with a business plan
The first step to launching your trucking company is to write out a thorough business plan. Your business plan will serve as a guide as your business grows. You’ll also need a business plan to secure funding for your business, whether it’s by taking out a loan, winning a grant, or bringing on investors.
In your business plan, you’ll need to detail your trucking company’s operations from top to bottom, including the types of trucks you’ll be using, where you’ll be offering services, what type of cargo you’ll carry, and how you’ll find clients. Additionally, you’ll need to put together a cost breakdown, including permits, vehicles, fuel, additional driver salaries, marketing, and more. This will help you determine your broader financial strategy and set your rates. Finally, this is a great time to pick a name for your trucking business.
Choose your company structure
After you have your business plan in place, the next step is to choose your company structure. You may want to talk with a legal or tax expert during this step of the process, as your company structure will affect the way you pay taxes later on.
Canadian companies can be structured one of three ways: a sole proprietorship, a general partnership, or a corporation. Sole proprietorships have one owner responsible for operations, while a general partnership has two or more owners who split responsibilities.
A corporation is an incorporated business that serves as its own legal entity, thereby removing legal responsibility for the businesses’ operations from the individual owner or partners. Corporations can be incorporated at either the federal level or the provincial level.
Once you’ve chosen your company structure, you’ll need to register your business with the government. In particular, you’ll need to get your 9-digit business number and 15-digit CRA number, which you will use to pay your taxes. This registration can be done online. Some important taxes you’ll likely need to pay as a trucking business owner include fuel taxes, goods and service taxes, and import/expert taxes.
Register for necessary permits
It’s crucial to register for necessary licenses and permits before you hit the road. Each province has its own specific rules for trucking registration, so be sure to check your local requirements as well.
Your business will need to obtain a safety fitness certificate to comply with the National Safety Code. This can be done under provincial law or federal law, each of which have different requirements. You will also need to make sure that each truck has an Electronic Logging Device to comply with Hours of Service requirements.
Additionally, you’ll need to register for the International Fuel Tax Agreement (IFTA), which is an agreement between the US and Canada that standardizes fuel taxes across 10 provinces and 48 US states. If you’ll be operating in multiple jurisdictions, you’ll also need to sign up for the International Registration Plan, which standardizes truck licensing across the US and Canada.
Finally, if you’ll be operating in both Canada and the US, you’ll need to get your Canadian Carrier Code operating authority. This allows you to go back and forth across the US-Canada border.
Get insurance for your trucks
All trucking companies will need insurance for their fleet. At minimum, you’ll need to make sure you have liability insurance, but most trucking companies also opt for cargo insurance and business insurance as well. It’s important to note that the exact type of insurance you’ll need will depend on the size of your trucks, the type of cargo you carry, and where you’re operating. It’s best to talk to an insurance professional to identify what type of coverage you’ll need for your business.
Once your business is properly registered and you have a detailed plan in place, it’s time to start looking for your first shipping clients. Ready to streamline your trucking business even further? Be sure to check out Rose Rocket, the #1 rated TMS. Book a demo below to learn more.