Thank you, Chair and committee members, for the opportunity to speak today.
My name is Stacey Horlings, and I am a business owner in the transportation sector. I'm here today because Canada's trucking industry is facing a serious and growing problem. This issue is not theoretical. It's happening right now to real businesses in every province.
At its core, the problem is simple: Freight brokers and trucking companies that are brokering freight are not required to carry a surety bond when operating domestically. This gap has allowed anybody, regardless of experience and financial capacity or ethics, to open a freight broker business, hire a trucking company to do the work, then collect money from customers and disappear without paying the trucking companies that actually move the freight.
Trucking companies provide the service and pay for the fuel, insurance, registration and maintenance only to be left with an unpaid invoice and no recourse. While legal action is technically available, in practice, it is slow, costly and ineffective. In many cases, it requires interprovincial enforcement of judgments, forcing carriers to spend additional time and money transferring court orders from one province to another.
In numerous cases, by the time the judgment is secured, the broker has closed the business, dissolved the corporation and reappeared under a different company name, rendering the judgment effectively worthless. This creates a system in which bad actors face minimal consequences while legitimate trucking companies absorb the financial loss, the legal costs and the painful financial trickle-down effect these things have.
As an example, brokers in other industries are required to be licensed, regulated and financially accountable. Take insurance and real estate brokers as an example. They have strict licensing requirements, carry an errors and omissions insurance policy and, in many cases, maintain a bond or trust account to protect clients from financial loss due to fraud, misappropriation and misconduct. The same safeguards are desperately needed in the transportation industry.
In the United States, the FMCSA requires any company that brokers freight to carry a surety bond as a condition of operating. I might add that this has recently been updated to prevent unstable freight brokers from engaging in business that will financially harm the transportation companies.
A surety bond does three critical things. First, it establishes credibility. A broker must demonstrate financial responsibility before being allowed to operate. Second, it protects carriers and shippers. If a broker fails to pay, the bond ensures compensation. Third, it enforces accountability. Brokers who fail to comply lose their authority.
This is not excessive regulation, but basic financial responsibility. Canada currently lacks these protections, and bad actors know it. Requiring a surety bond would protect trucking companies and level the playing field for ethical brokers. More importantly, I believe this will help restore trust across our industry and prevent honest businesses from being unfairly punished.
I urge the committee to recommend a framework to be put into place that would require mandatory surety bonds for freight brokers. Trucking companies are not asking for special treatment. They're asking to be paid for the work already done. As a follow-up, if I'm allowed the time, I would like to share how I believe the safety on the road ties in with financial accountability.
Thank you for your time. I welcome questions.