How to Start a Trucking Company in Canada: Step-by-Step Guide [2022]

In the year 2018, 312k truck drivers were employed in Canada and the trucking industry did a business of CAD 39.55 billion with 63.7 million shipments.

If you also want to start a trucking company and you want to know how to start a trucking company in Canada in 2022 then you have come to the right place.

Canada ranks 23rd in the world in terms of ease of doing business, so starting a business here is quite easy.

In the trucking business, you have to transport goods from one place to another. If you want to open a company by starting a trucking business in Canada, then this can be a profitable business idea for you.

So let’s know how to start a trucking company in Canada in 2022.

How to Start a Trucking Company in Canada

Along with Goods Transportation, trucks are also manufactured in Canada in large quantities, for this, it is a little easier to start a truck business here than in other countries.

There are more than 700,000 trucks across Canada that work to transport goods from one place to another.

Let us first know how much it will cost to start a truck company first.

How much will it cost to start a trucking company?

If you want to start a trucking company in Canada then you should have a good budget because to start a trucking company you have to incur many expenses such as:

  • trucks
  • to take office space
  • License
  • permit
  • Staff

That’s why it is important that before starting a trucking business in Canada, you should make a business plan so that you know how much and when to spend.

If you want to raise money to start a trucking company then you have 3 ways:

1) Leasing the truck through a full-service lease agreement

2) Taking a truck on loan

3) Buying a truck from the Lease to Buy program

The average price of a truck in Canada is around $38,000.

Why start a trucking company?

Almost all the truck drivers in Canada have a dream to start their own trucking company because the money in the business of trucking is very high and the owner of the trucking company does not have to drive the truck by himself.

According to a report, the owner of a truck company in Canada earns on an average $125,875 per year i.e. earns about $10,489 per month.

If you want to start a trucking company in Canada then this can be a profitable business idea for you

What is the experience needed to start a trucking company?

If you already have 2 years of experience as a truck driver and owner operator then you can start a trucking company easily.

There are many provinces in Canada where no experience is required to start a trucking company.

1) Make a plan to start a trucking company

You cannot start any business without a plan, you must have a plan for your trucking business.

In the business plan, you plan about market research, business structure, income generation, and operation.

Define your niche

It is important that before starting a trucking company, you have to decide on the niche of your business such as:

  • Industries: It is important that you choose your industry like oil & gas, paper mill, agriculture, etc.
  • Operation A Geographic Range: You also have to make sure how far you will be transporting the goods in a particular area
  • Clients and Shippers: You need to identify your Clients and Shippers like what are their traits? What are their strengths and weaknesses? and so on.

Make a business plan for a trucking company

Now it is time to plan your trucking business, many things are worked out in a business plan such as:

  • company’s goals
  • strategies
  • target market
  • financial predictions

You also plan this thing in your business plan that how you will find investors so that your company can get funds.

If you want to make a good business plan, then you should take the advice of industry experts, along with this, it will work even if you give maximum time to make your trucking business plan.

Decide the ownership of your trucking business

Now you have to make sure that what will be the ownership type of your business and if you are starting a business then it is important to decide the type of ownership.

There are essentially four forms of business ownership:

  • The sole proprietorship: There is only one owner who looks after all the functions of the company.
  • The partnership: In this, more than 1 person is the owner and takes care of the different functions of the company.
  • The corporation: In this type of business there are many shareholders and stakeholders who handle the business.
  • The cooperative: This type of business is maintained by its members.

The two ways of doing business above are much easier than the ways of doing business below. You have to determine the ownership of your business and register it legally

2) Specify your business name

Once you have your trucking business plan in place, it is important to think of your business name.

The name of your business should be something unique and easy enough to remember but you don’t copy others’ business names.

Research on the internet and social media and name your business accordingly and register its trademark.

3) Register your business

Now that you have named your business, it is time to register the business. You must register your business name with the Canadian government.

If you are doing sole proprietorship or partnership then you have to register your company’s trademark, get a tax number, and then open your bank account.

Even if your business type is a corporation, you still have to register the company name, get a tax number, and open a bank account.

If your business type is a corporation, then you will need the following documents and this process can be a bit complicated.

Business number & CRA number

The business number is a special 9-digit number assigned to your company that can be used for transactions of taxes, payroll, and export/import.

Register to receive a CRA number or business number online, by fax, or by mail. Registration requirements and costs vary from province to province.

4) Apply for Permit, License, and Industry Law Requirements

After applying for a business number, you will have to apply for many other government-related documents.

National Safety Code/motor carrier safety fitness certificate regulations

According to the National Safety Code (NSC) and the Vehicle Transportation Act, a federally regulated vehicle that crosses a Canadian province or an international border will require a National Safety Code.

If you qualify according to the criteria mentioned below, then apply for a safety fitness certificate:

  • If the vehicle capacity is for 11 or more people
  • If you operate in your base province
  • If the weight of your vehicle is 11,794 kg

International Fuel Tax Agreement (IFTA)

The International Fuel Tax Agreement (IFTA) is a cooperative agreement between 10 Canadian provinces and 48 American states to simplify fuel tax reporting.

Any Canadian trucking companies operating in IFTA-covered locations in Canada and the United States must apply for IFTA.

The entire fuel tax is divided according to the province in which you operate.

The following are the jurisdictions not covered by IFTA and, therefore, do not require IFTA credentials:

Canada: Yukon Territory, Nunavut, and Northwestern Territories; and 

United States: Hawaii, and District of Columbia.

To register your trucking company for IFTA, you can go to your local jurisdictions and fill out the required application forms and licensing fees

Carrier insurance

Canadian provinces offices such as Alberta and Manitoba require commercial motor carriers to obtain insurance coverage when applying for a safety fitness certificate.

Cargo insurance of $15,000 to $32,000 will be required depending on the maximum weight of your vehicle.

Canadian ELD and Hours of Service rules

If you are starting a trucking business in Canada, then you have to plan your compliance according to the Hours of Service (HOS) and the use of Electronic Logging Devices (ELDs).

How much commercial drivers can drive is determined according to Canadian Hours of Service rules.

The job of Hours of Service is to prevent accidents that happen when a driver gets tired of driving too much and hits the car.

Specific permits by province and territory

The Canadian province can impose any requirements on your trucking business, so visit BizPal to check your required permits and documents according to your operated province.

If you want to start a trucking company in Canada in 2022 then you have to understand all the above-mentioned steps carefully and apply.

If you start a trucking company in Canada with the right planning then you can earn a lot of money in the trucking business.

Essential reads:

19+ Businesses to start with $100k in Canada: Profitable Business

9+ Profitable Business to Start with $50k in Canada

We hope that after reading this blog post, you have got the answer to your question easily.

FAQ

Q: Is the trucking business profitable in Canada?

Ans: In the year 2019, trucking companies in Canada had a business of $67.8 billion, out of which they made a profit of $7.9 billion, so you can understand how profitable it is to start a trucking business in Canada.

Out of what was earned in the trucking companies, $59.8 billion was spent on operating the total business.

Q: How much cash do you need to start a trucking company?

Ans: If you want to start a trucking business in Canada then you can start by investing $50,000.

Q: How much do truck owners make per month?

Ans: According to a report, the owner of a truck company in Canada earns on an average $125,875 per year i.e. earns about $10,489 per month.