Heavy Traffic: Trucking Deregulation, Federalism, and Canadian-U.S. Trade

Abstract

Trucking deregulation, in the interest of competition and efficiency, removes rate controls and grants free entry to the market. When the United States deregulated trucking in 1980, it opened the interstate market to Canadian carriers. Heavy volumes of trade by trucking between the two countries make entry conditions an important bilateral issue. Deregulatory symmetry between the two countries would produce a de facto regime offree trade in trucking services. In 1987 the Canadian federal government adopted deregulatory measures similar to those of the United States, but with more complex and problematic results. The reasons, broadly characteristic of the evolution of Canadian federalism, lie in the ability of the provinces to thwart federal initiatives. Trucking regulation is under provincial control, and to achieve a practical effect, the federal government depends upon the provinces to bring their practices into accord with its policy. Because of differing provincial views about deregulation and pressures from Canadian truckers for continued protection from American competition, much diversity and contention have delayed and compromised the federal government's purpose. Regulatory reciprocity is also a question of the provinces and states, with a mixture of strict and easy entry policies complicating the achievement of bilateral balance and equity. The larger implications of deregulation and transborder trucking for Canada lie in the ability of a decentralized federal system to pursue necessary initiatives coherently.