Over the Road July 2024

1189694 Ontario Ltd. C.O.B. as Over The Road

Publisher Peter Charboneau peter@otrgroup.ca

Director of Operations & Editor-in-Chief Cathryn Charboneau cathryn@otrgroup.ca

Account Executive Luke Zentil luke@otrgroup.ca

Account Executive Earle Madden earle@otrgroup.ca

Graphic Design & Advertising lennykuiper.com lennykuiper@gmail.com

Controller Estela Navarrete estela@otrgroup.ca

Office Manager Mary Charboneau mary@otrgroup.ca

All advertisements, and/or editorials are accepted and published by Over the Road on the representation that the advertiser, its advertising company, and/or the supplier of the editorials are authorized to publish the entire contents and subject matter thereof. The advertiser, its advertising company, and/or the supplier of the editorials will defend, indemnify and hold Over the Road harmless from and against any loss, expense or other liability resulting from any claims or suits for libel, violation of privacy, plagiarism, copyright or trademark infringement and any other claims or suits that may rise out of publication of such advertisement and/ or editorials. Press releases are expressly covered within the definition of editorials.

Robert D. Scheper

Don’t negotiate your taxes with an Accountant; they don’t have the authority!

I have interviewed several hundred operators in the last couple of months. Too many of them simply did not understand the basics of personal income taxes. I had several who stated that if the taxes are too high, they argue with the accountant until they reduce it. Others say, if it’s too high, they just move to another accountant who gives them a lower amount. That’s not how Canadian income taxes work. It’s not like haggling with a vendor on the beach in Jamaica… well… not at the initial filing level anyway. Sometimes, when someone goes through an audit and there are a bunch of discrepancies, for the sake of simplicity, a “compromise” can be made with the auditor. However, it’s never that way year after year.

When someone “haggles” with their accountant to reduce their taxes, they do not understand what they are doing. Firstly, what saves taxes as an operator is not the accountant, it’s the system the accountant uses. For instance, the TL2 simplified method produces a certain result while the non-taxable benefit system will produce a very different

(lower) taxable amount. What is necessary is to interview the accountant to find out what system they use BEFORE you hire them. Too many tax preparers who serve operators have no idea about the nontaxable benefit system. The TL2 and the NTB system both use some of the same terminology such as “Per Diem” which is simply Latin for “Per Day”.

If you have two accountants and they both use the TL2 system, they should get the same dollar figure (if both their calculators work properly). If there is a difference it has to do with missing documents or documents in dispute.

Historically (meaning in the 1970’s and prior) there were many more discrepancies between accountants. It was BEFORE most desktop computers and software used standardized methods. I remember my parents’ Accountant coming to their business and clickity-clickclicking an adding machine to spit out a narrow roll of paper with numbers on it. Accountants used to defend most or all tax returns as a professional policy. So, when

they were liable, they tended to have their own standards of expenses. If they didn’t want an audit, they were very conservative. One Accountant I know always held back a few thousand dollars of invoices so that when an audit came, they produced more deductions and the auditor had to start from a negative position. In effect that Accountant had the client pay for his own tax insurance policy by not using legitimate invoices. It is a very old and cruel system Accountants used to use. The idea that Accountants guard the tax gate is still out there, but the reality is (especially towards an independent operator) there is basically nothing to “negotiate”.

What happens when a client “haggles” with an accountant to lower the amount owing is assuredly some form of fraud. I wish it wasn’t but I’m afraid it probably is. Especially based on the amount that it’s reduced. Maybe a few hundred dollars is “negotiable” through home expenses, auto expenses or so… but a few THOUSAND dollars? That requires the re-engineering of major expenses. Since most operators use private, home-based tax preparers, the operator will be carrying all the liability in case of reassessment. In effect, if the client pressures the tax preparer to falsify the return on their behalf… they do it to themselves. From an ethical perspective, it makes no difference. Not knowing how someone lies for them

doesn’t absolve them of the lie; they are still complicit.

If someone wants to be an independent operator they must understand at least the basics of taxes. Taxes for an independent operator are one of the simplest businesses to prepare. Revenue, less expenses equals taxable income. Understand what expenses can be used. Make sure you understand how non-taxable benefits work, and then use them… save taxes. Blindly delegating is a very poor business model.

About the Author:

Robert D. Scheper is a leading Accountant and Consultant exclusively serving the Lease/ Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His second book “Choosing a Trucking company” is the most in-depth analysis of the independent operator industry today. He has a Master degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars. You can find him at www.makingyourmilescount. com or 1-877-987-9787.

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Chris Harris

Navigating the Pitfalls of Facility Insurance

If you are based in a province that offers facility insurance and you are using facility insurance, you are or were likely in trouble.

If you use facility insurance, it will either slowly or quickly put your company into bankruptcy. What makes the facility insurance market so problematic? Facility insurance is often 3 to 5 times what you would pay in the regular insurance market. Depending on the province you are based in, the insurance coverage is not as comprehensive as the regular market. Insurance brokers in Alberta have reported that facility insurance rates are increasing significantly this year, potentially reflecting the disastrous facility insurance rates seen in Ontario.

But what exactly is facility insurance? It is insurance for those who do not qualify for the “regular market”

insurance. The regular market is when you go to an insurance broker and request insurance for your trucking company, and the broker can provide you with competitive quotes. This is the norm and how the insurance industry should function. However, many trucking companies, for one reason or another, do not have access to the regular market.

The reasons can be many. New companies just starting up may not be able to prove that the management team has at least three years of prior trucking management experience. This is perhaps the most common reason companies are forced into the facility market. Regular insurance companies want to ensure that the management team of a new startup company has the necessary experience to run a safe and successful trucking enterprise.

Many new Canadians who wish to start a trucking company cannot prove they have previous experience, and this will often force them into the facility market.

Another common reason that trucking companies are forced into the facility insurance market is that they have poor safety scores. Insurance companies closely monitor a company’s national safety code profile (called CVOR in Ontario) and, if the company operates in the US, their SMS scores. They also closely watch for any crashes or driver errors. Insurance companies are in the business to make a profit, and as publicly traded entities, they must ensure a return on their investments. This can sometimes lead to the perception that the insurance industry is profiting excessively from the trucking sector.

How can a company escape the facility insurance market? The solution depends on the reason for being in that market. If it’s due to a lack of experience, the company may seek a co-owner with the required experience. If it’s because of poor safety scores and too many crashes,

the company must address those underlying issues.

It’s important to note that not all companies in the facility insurance market deserve to be there. If you are in the facility insurance market and want more information about what you can do and perhaps how you can get out, you may want to reach out to me for assistance. I may be able to provide guidance and support to help you navigate this challenging insurance landscape.

Safe driving,

Chris Harris

Top Dawg, Safety Dawg Inc. 905-973-7056

chris@safetydawg.com @safety_dawg (twitter)

WOMEN IN TRUCKING

Ellen Voie

What Happened to Civility?

The word civility is defined as formal politeness and courtesy in behaviour or speech. Its origin is the word “civilitas” which relates to citizens. Words aligned with civility include courtesy, politeness, good manners, graciousness, and respect.

The Institute for Civility in Government goes beyond this definition to include “disagreement without disrespect.” What does that mean? It means we can hold opposing views while still recognizing the other person’s opinions as valid and deeply held.

For those who have studied language in some capacity, you may be familiar with some of the arguments people use to discredit others. One of them is called the Ad hominem argument, which is a personal attack. You can see this tactic used in politics every day. Instead of addressing the statement, the speaker instead denigrates the other person’s character or motive to undermine the statement.

Children use the Ad hominem argument all the time. I recall my niece choosing the name Rose for her doll and another

little girl told her she was stupid for her selection. With children, we can teach them to be more respectful, but once we’re adults, we should already hold these values to create a more pleasant environment.

Visit any Facebook group and you’ll see some nasty comments directed at other posters. It’s called keyboard courage when you are an anonymous icon hiding behind a long line of bitter and angry people. I’ve never understood the attraction to hurting another person, even if you don’t know them personally. What satisfaction does a person get from being mean?

Many of us learned the adage, “If you can’t say something nice, say nothing at all.” I have bitten my lip to keep in some of the negative thoughts I would like to share, so I am not lowered to the level of those who enjoy shooting electronically charged daggers.

The trucking industry is a close community. Drivers really are good at connecting with one another, both in person and through technology. In the past, the CB radio was the most common method of interaction. Now, drivers use

apps and websites and especially social media to find common ground with others.

Unfortunately, that same venue can be viewed by those outside of our industry and more importantly, many who are considering becoming a part of the supply chain. Yet, what they are seeing is bickering, attacking, denigrating and profanity. What happened to a sisterhood or brotherhood?

Are you looking out for your fellow drivers on the road or at loading docks? Are you being supportive and helpful to encourage and validate others? If so, then I thank you from my bottom of my heart, as we need more civility these days.

If you are quick to share a verbal barb or comment on another person in a negative way, why are you doing it? Wouldn’t you prefer to give someone a compliment and see a smile than to hurt someone and make them unhappy?

Our first President, George Washington, hand-wrote a list of 110 rules of civility and decent behaviour. Many of these rules involve physical etiquette, such as not sneezing on people and others include table manners. However, the first rule is, “every action done in company ought to be with some sign of respect, to those that are present.”

Civility begins with you. The next time you are at a truck stop or a loading dock and you hear a person make a negative comment, ask them to please stop.

Many times, people don’t realize how destructive their words can be. Think about how the trucking industry could return to the “Knights of the Road” image that the public used to see.

Let’s make the trucking industry more civil, more accepting, kinder and more welcoming. Let’s bring back the sisterhood and brotherhood that trucking was founded upon nearly a century ago. It’s up to you.

Ellen Voie Founder

of Women in Trucking, Inc. ellen@womenintrucking.org www.womenintrucking.org

Mission: Women In Trucking was established to encourage the employment of women in the trucking industry, promote their accomplishments and minimize obstacles faced by women working in the trucking industry.