Community Cars driving the highway at night.

Published on August 25th, 2015 | by Elliott Silverstein

Shaping the Future of Ontario’s Towing Industry

Bill 15, also known as the “Fighting Fraud and Reducing Automobile Insurance Rates Act”, was passed by MPPs at Queen’s Park nine months ago. The Bill, which focused heavily around reforms to assist the provincial government reach its average 15% reduction in auto insurance rates, also included efforts to regulate the towing industry in Ontario. This blended two previous pieces of legislation into one.

While much of the media spotlight has concentrated on auto insurance, the ongoing discussions around towing regulations is equally as important and, when it comes into effect, has the potential to impact all motorists across the province.

In this blog, we will provide insight into the subject and what it may mean for motorists. CAA is eager to continue discussions with government representatives. As an organization advocating for over 2 million members across the province, we want to highlight that it is vital for consumers to be protected on Ontario’s roads. Similarly, regulations need to be implemented in a way that ensures the towing industry is able to continue operating in a manner to help safely service its clients – Ontario motorists. With regulations yet to be finalized, CAA aims to ensure that any new requirements will protect consumers, focus on service standards, and ensure that consumers are protected.

A vehicle breakdown or collision can be a very traumatic and stressful time for motorists who are often in a vulnerable state. Not only will towing regulations help motorists understand their rights when using a towing service (including receiving an itemized bill and being able to pay by credit card), these changes are designed to also enhance training and safety for tow operators.

Beginning last January and over the course of three months, the Ministry of Government and Consumer Services held a series of meetings with key stakeholders to discuss what towing regulations should look like, focusing on a number of key issues. Along with select municipalities, law enforcement and the insurance industry, CAA was one of the organizations that participated in the sessions, ensuring that the Association and our members had a voice at the table during these critical discussions. Download the entire report here.

As the government prepares to draft regulations in the near future, a number of issues remain, with some potentially posing a significant impact on the industry and motorists. They include:

  • Hours of service requirements – a proposal where tow operators are limited in the number of hours they can work. This proposal could limit the number of tow trucks available to provide service which could result in longer wait times, especially in peak periods
  • Vehicle inspection stations – a proposal to have tow trucks be inspected at highway inspection stations, which could delay tow trucks from arriving on scene and/or forcing a motorist to be delayed in queue with other long-haul trucks after their vehicle gets picked up
  • Incident scene management – establishing protocols at the scene of a breakdown or accident to ensure safety and proper practices are maintained
  • Provincial licencing of tow trucks – tow trucks would be licenced to operate by the provincial government instead of by each municipality they’re operating in. If licencing were to be addressed in each municipality, this could result in significantly higher costs for operators, which in turn could result in increased charges for towing services

Both provincial licencing and incident scene management were issues raised by panel members as critical issues in regulating the towing industry. While government officials may be reluctant to currently investigate both issues, CAA feels that if regulations are instituted without them, it could pose a long-term negative impact for both the towing industry and motorists.

Currently, there are less than two dozen municipalities in Ontario that regulate towing, mostly in urban areas. With provincial licencing of tow trucks not high on the government’s priority list, it is likely that any licencing and enforcement would need to be administered by municipal governments. Since Ontario is home to 444 municipalities, it is possible that we could see different towing requirements among neighbouring municipalities. This happens in the existing areas with by-laws, which is confusing for both motorists and towing operators. On top of the confusion is cost. Currently, municipalities that regulate towing licencing require an annual licence renewal that can cost several hundred dollars per truck. When you multiply that by a network of tow trucks in a particular area, and by over 400 municipalities across Ontario, the costs can be quite significant to be compliant with municipal rules.

Under the Ministry of Government and Consumer Services’ plan, it could soon become more challenging, as the current model would expand to all municipalities. These additional and repetitive costs will not just sit with tow operators – some operators may find the costs too excessive and either scale back the areas they service, close their operations, or look to raise rates and pass the additional costs onto the motorist and/or insurance company.

As an advocate for our Members and Ontario motorists, along with being an auto club that actively works with towing industry operators and companies, these recent developments are highly concerning for CAA. While auto insurance reforms were the principal focus of Bill 15, regulation of the towing industry will likely not impact the government’s efforts to reach a 15% reduction for motorists. The towing industry is at a crossroads and needs a long term solution where changes do not impose undue financial burden or adversely affect the industry, but help it achieve the standard that motorists deserve and expect while ensuring that services are available for motorists when needed.

Other stakeholders in the process have raised similar concerns. If the regulations take effect without heeding the warning of stakeholders like CAA, chances are we will see longer wait times with motorists stranded in a time of need, higher costs, and no true solution to systemic issues like “chasing” to scenes of collisions and other undesired tow practices.

CAA’s perspective remains the same. We are continuing our discussions with government representatives and highlighting that any regulations that are introduced must consider the impact on both motorists and the industry. It is vital for consumers to be protected on Ontario’s roads, and it is equally important for the towing industry to remain strong and operate in a manner to help safely service motorists. We are at a critical stage in the process and will continue to update on further developments in future postings.

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