Towing and Storage Safety and Enforcement Act (TSSEA) Regulations
Bill or Act:
Towing and Storage Safety and Enforcement Act; Highway Traffic Act
Summary of Decision:
Some administrative provisions of the Towing and Storage Safety and Enforcement Act (TSSEA) were approved to come into force on July 1, 2022, while some substantive sections of TSSEA were approved to come into force on July 1, 2023. A new TSSEA regulation, O. Reg. 417/22 (General), was also approved to come into effect on July 1, 2023.
These TSSEA provisions set out certificate entry and renewal requirements, and the appeal mechanisms for three certificate types (tow operator, vehicle storage operator, and tow truck driver).
Amendments to Highway Traffic Act (HTA) regulations: O. Reg. 199/07 (Commercial Motor Vehicle Inspections), Reg. 611 (Safety Inspections), Reg. 587 (Equipment), O. Reg. 424/97 (Commercial Motor Vehicle Operators' Information), O. Reg. 174/22 (Classes of Vehicles Requiring Annual and Semi-Annual Inspections), were also approved to come into effect on January 1, 2023.
These HTA amendments remove most exemptions for tow operators under the Commercial Vehicle Operator's Registration (CVOR) program and set minimum requirements for tow trucks.
Analysis of Regulatory Impact:
Ongoing issues plague the towing and storage sectors due to a subset of nefarious actors who might engage in insurance fraud, inflate invoices, or threaten and intimidate customers. There have been incidences of crime, including arson, assault, and homicide. Tow operators have been found stunt driving and driving on highway shoulders, posing significant road safety risks for Ontario road users. Combined, these issues have damaged the sector's reputation and undermined market competitiveness.
The Ministry has heard that, without intervention, these issues might lead to:
• Tow operators going out of business due to an uncompetitive market, difficulty attracting new talent, and potentially being bought by nefarious actors in the sector;
• Nefarious actors growing in number and expanding across the province;
• Escalation of violence; and
• Rising costs for insurers and customers.
To address these challenges, the Towing and Storage Safety and Enforcement Act (TSSEA) received Royal Assent on June 3, 2021. MTO is now proposing a series of regulations under the TSSEA and the Highway Traffic Act to:
• Identify certificate requirements and the process to obtain and maintain a certificate (e.g., requiring background checks, driver training);
• Set out industry and customer protection standards, including procedures for consent forms, estimates, notification, and invoices, ensuring rates are charged in accordance with rate schedules (TBD), and record keeping requirements; and
• Remove most tow operator exemptions from existing Commercial Vehicle Operator's Registration requirements.
The existing municipal licencing system creates an annual average present value cost of $1.5 million for the towing and storage industry. The proposed regulations under the TSSEA and the HTA are estimated to result in additional annual average present value compliance costs for the sector of up to $5.0million, of which $1.5 million are administrative costs. These costs result from certificate fees, training and education, vehicle inspections, and the time required to complete the application process, keep records, notify the Ministry, and cooperate with inspections. To minimize financial impacts to the industry, the Ministry is considering multiple certificate fee options which will be the subject of future consultation.
The proposed regulations are expected to significantly reduce fraud and overbilling in the sector, improve competition, improve road safety, increase customer confidence, reduce the potential for vehicles being held hostage, and reduce intimidation, violence, and crime, among other benefits. The annual average present value of these benefits is estimated at approximately $12.0 million (pending further ministry analysis). The Ministry used all currently available data sources to estimate this value. The Ministry is continuing to engage stakeholders to help further identify the extent of cost savings and fraud reduction that could be achieved through the proposal.
All cost and benefit estimates are preliminary and subject to change as the Ministry refines its analysis and receives additional input.
March 2, 2022
Summary of Proposal:
Tow operators provide an essential service on Ontario's roads. Each day, vehicles are towed for breakdowns, illegal parking, or motor vehicle collisions.
The Ministry is proposing regulations under the TSSEA and the Highway Traffic Act that outline requirements for industry to follow and how the TSSEA will be overseen. The proposed regulations apply to Ontario-based operators and drivers and will:
•Identify certificate requirements and the process to obtain and maintain certificates
•Set out customer protection standards, including procedures for consent forms, estimates, and invoices, and ensuring rates are charged in accordance with rate schedules
•Set out industry standards, including requirements for photographs and record keeping, restrictions at collision scenes, and notification procedures
•Remove most tow operator exemptions from existing CVOR requirements, e.g., daily inspection and annual vehicle inspections for smaller vehicles, record keeping, assuming responsibility for drivers
•Introduce minimum vehicle requirements for tow trucks
•Specify how the Ministry will oversee the TSSEA
The TSSEA is anticipated to replace the current oversight requirements under municipal regimes.
If approved, the proposed requirements would be rolled out in three phases to help transition the sector to the new oversight model:
Phase 1 - effective January 1, 2023: Application of CVOR requirements that apply to other commercial motor vehicles. There will be no change to the Hours of Service exemptions.
Phase 2 - effective July 1, 2023: registration will be required for tow operators, tow truck drivers, and vehicle storage operators to obtain a certificate required to operate in the sector. The Ministry will be authorized to revoke, suspend or cancel a certificate under the TSSEA for non-compliance. An application and renewal fee will be applied Entities that provide more than one of the regulated services (tow operation, tow truck driving, vehicle storage) will be required to hold a separate certificate for each service. The ministry will consider options for reduced fees for multiple certificate holders.
Phase 3 - effective January 2024: modernized customer protection requirements and standards of practice for the sector.
On June 29, 2020, in response to growing violence, corruption and criminal activity in the towing industry, the province announced the establishment of a task force to develop a comprehensive provincial regulatory regime for Ontario's towing industry. The task force identified the following policy objectives for a new regulatory framework:
1.Promote road user and tow operator safety to prevent deaths and injuries on Ontario's roads
2.Improve customer protections to ensure drivers are treated fairly after they experience a collision or a breakdown
3.Create a level playing field with clear requirements that allow legitimate operators to prosper
4.Enhance intelligence gathering and enforcement and take action against unethical actors
5.Reduce crime and fraud throughout the towing cycle
Resulting from the towing task force's work, the government introduced the Towing and Storage Safety and Enforcement Act, 2021 (TSSEA), as part of the Moving Ontarians More Safely Act, 2021. The Act received Royal Assent on June 3, 2021.
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January 1, 2023