Ontario’s towing task force: consultation and research

Overview

In June 2020, the government established a task force to improve provincial oversight of the towing industry. This was in response to concerns raised about incidents of criminal activity and violence in the towing industry.

About the task force

Mandate

The mandate of the task force was to help develop options for a regulatory model to:

• promote road user and tow operator safety to prevent deaths and injuries on Ontario's roads
• improve customer protection measures so drivers are treated fairly after they experience a collision or a breakdown (this could include ways to reduce inflated invoices and customer intimidation)
• create clear requirements that allow legitimate operators to prosper on a level playing field
• enhance intelligence gathering and enforcement and take action against unethical practices
• reduce crime and fraud throughout the towing industry

Membership and governance

The task force was co-led by the Ministry of Transportation (MTO) and the Ministry of the Solicitor General (SOLGEN), with representatives from:

• Ministry of Government and Consumer Services (MGCS)
• Ministry of Municipal Affairs and Housing (MMAH)
• Ministry of Labour, Training and Skills Development (MLTSD)
• Ministry of Finance (MOF)
• Ontario Provincial Police (OPP)
• municipal police services

Towing in Ontario

About the industry

Tow truck operators provide an essential service on Ontario's roads. Each day vehicles are towed, and possibly impounded, for breakdowns, illegal parking or collisions.

Towing services in Ontario typically consist of:

• tow service operators (who are required to hold a Commercial Vehicle Operator’s Registration (CVOR) certificate)
• storage facility operators
• tow truck brokers
• tow truck drivers

The towing industry features a mix of large companies with multiple vehicles and employees, as well as individual owner-operators.

There are approximately 1,600 tow truck companies registered in MTO’s CVOR program. Industry estimates indicate that there are approximately 3,000 tow truck drivers.

Current regulations

The towing industry is regulated through several different acts, such as:

Towing and Storage Safety and Enforcement Act (TSSEA)

• Sets out certificate and renewal requirements for tow operators, vehicle storage operators, and tow truck drivers.

Highway Traffic Act (HTA)

• Requires tow trucks to operate with a valid CVOR certificate to monitor safety.
• Establishes requirements and standards for commercial motor vehicles, including tow trucks.

Consumer Protection Act (CPA)

• Protects consumers with general and towing-specific requirements, including measures to increase transparency, such as mandatory disclosures of information to the consumer to better understand and make informed choices. The CPA defines a ‘consumer’ as an individual acting for personal, family or household purposes.

Repair and Storage Liens Act (RSLA)

• Provides rules for repairers and storage facilities to be able to claim liens on property, such as vehicles, that they have repaired or stored under certain circumstances.

Fighting Fraud and Reducing Automobile Insurance Rates Act

• Provides consumer protections to reduce insurance fraud.

Insurance Act

• Provides protection for consumers against specific actions that are considered as unfair or deceptive and would apply to vehicle repair shops, automobile storage facilities, and tow truck operators.

Some municipalities in Ontario have business licensing bylaws that set requirements for some aspects of towing services, such as tow operators, tow truck drivers and/or towing vehicles.

The customer experience

The following describes the customer’s journey through the towing experience for a breakdown, collision or self-initiated tow:

1. Trigger

The customer experiences an event that leads to the need for a tow, such as:

• a collision
• a breakdown
• repossession
• moving a vehicle from one place to another

A vehicle could also be lawfully seized, meaning it is towed to a storage facility for parking illegally, causing an obstruction, or because a driver commits an offence, such as impaired driving.

2. Engaging tow truck services

Towing services may be engaged in a variety of ways, including:

• The customer may contact a towing service based on preference or use the services offered at the side of the road.
• Upon request from the driver/owner, the insurance provider or police may suggest a towing service.
• The police may instruct the customer to use a service that arrives on the scene or they may call on the customer’s behalf due to traffic or safety concerns, or if the customer is unable to call due to an injury.

3. Discussing and agreeing on towing needs

Once the towing service arrives, the customer should be provided with details related to the towing of their vehicle by the tow truck driver, such as fees or location. The customer would then sign the agreement with the tow truck driver that outlines the fees and location to tow the vehicle.

If the tow truck driver refers the customer to other service providers, such as repair facilities (for example, auto body shops), or health care providers, the consumer is not required to follow this advice, and the tow truck driver is required to disclose if they have any affiliations or relationships with the businesses, under the CPA.

Police may require the vehicle be taken to a collision reporting centre or impound lot.

4. Towing the vehicle

The tow truck driver would then initiate the recovery of the vehicle.

The vehicle should then be towed to the location identified in the agreement, such as a repair facility, collision reporting centre, or storage facility. There may be additional tows of the vehicle required after the initial tow, such as if the vehicle was brought to a collision reporting centre and then to a repair facility. In this case, additional agreements may be required.

5. Payment and recovery

The customer, or their insurance provider, would pay for the tow, storage and/or repair services provided to recover the vehicle. If the vehicle was impounded by police for an offence such as impaired driving, the customer may have to wait a certain period to recover the vehicle. Depending on the damage sustained, some vehicles may not be able to be recovered.

The consumer can file complaints with Consumer Protection Ontario if they feel that the tow provider has failed to comply with the requirements of the CPA. Drivers may also file complaints with the relevant municipality if it has a towing bylaw.

Other types of tows

The towing experience will vary for those vehicles that were lawfully seized for illegal parking or repossessed.

Overview of our consultations

The task force partnered with the Ontario Public Service’s Policy Innovation Hub to engage industry stakeholders in September and October 2020. This included an exploratory survey, consultations and interviews. The task force also engaged with the public on their experience with towing in a survey from December 2020 to January 2021.

The purpose of the consultations was to:

• explore challenges and opportunities in today’s towing industry from the perspectives of all actors within the towing experience
• define the vision of success for a new regulatory framework
• capture industry partners’ feedback and refine regulatory options developed by the task force

The task force also considered previous research and consultation with the towing sector that introduced towing-related requirements to the CPA and the RSLA. Information gathered from ongoing conversations with the industry was also reviewed, including a survey conducted in March 2020 relating to proposed changes to the CPA.

Stakeholder consultation

The task force consulted stakeholders including:

• automobile insurance companies
• municipalities
• law enforcement agencies
• towing industry representatives
• consumer groups
• commercial business representatives

Overall, there were:

• 77 survey responses from consultation participants and additional towing industry partners
• 20+ hours of virtual consultations with 70+ industry partners
• 5 group consultations
• 6 one-on-one consultations

Feedback on current towing framework

The task force asked industry partners about the benefits and challenges of the current state of regulations for the towing sector. Key themes that emerged include:

• regulations overseeing the towing industry provide a valuable foundation, however, there are gaps in coordination and enforcement
• municipal bylaws, such as business licensing, may address some issues at the local level, but only a small proportion of municipalities (18 out of 444) regulate only some aspects of towing
  • varying bylaws among municipalities also lead to a patchwork approach across the province
• many towing businesses uphold high standards, take pride in their work, and operate professionally
• having several operators available helps clear highways quickly and safely in collision scenarios

Challenges and opportunities

The task force asked industry stakeholders and the public about the challenges and opportunities for improvement in the towing industry.

Protection for customers

Participants identified challenge areas for customer protection, including:

• protections for commercial vehicles: commercial vehicles are not protected by the requirements of the CPA, which may leave them vulnerable to unethical towing companies that may charge excessively high fees
• protections for consumers: existing towing-focused protections in the CPA do not account for the stressful situations that consumers may encounter when they need a tow and do not provide protections for all services involved in the towing experience, especially storage services
• access to a towed vehicle: customers may have difficulty trying to access a vehicle taken to a repair service facility or storage facility and may find that their vehicle has been taken to a location without their authorization
• pricing and insurance claims: some unethical tow services and storage facilities operators use confusing billing practices, hold vehicles for extended periods, and inflate invoices
• customer information: as most people do not need a tow regularly, customers often have a limited understanding of the towing experience, their rights, and any recourse that may be available if they have a dispute with a service provider
• point of contact: tow service operators and insurance providers may provide customers with conflicting information about who they should contact leading to confusion for the customer
• systemic collision-related fraud: the possibility to make an automobile insurance claim throughout the towing experience has been abused by a complex fraud network, most often observed in collision tows. This contributes to higher auto insurance premiums for customers

Participants identified potential opportunities to enhance customer rights and provide information, including:

• creating a Customer Bill of Rights or other tool that outlines a customer’s rights and provides information about the rules
• requiring approval by the insurer prior to starting secondary tows and repairs
• eliminating the ability to take out a lien on a vehicle until payment is received
• eliminating the opportunity to charge additional storage fees when there is a delay in notification of the vehicle location during the 15-day notification period
• distributing information on customer rights when a car is brought in for service, newly sold, or at an auto repair shop
• establishing a provincial fee schedule (for example, controlled rates for initial tow and caps for storage rates, with considerations for regional differences)
• implementing a payment system available only to registered operators to bill insurance providers for services

Road user and tow operator safety

Participants identified challenge areas for towing operators and drivers:

• industry standards: there is no legislated requirement for operators to complete training on the skills and equipment needed to safely perform a tow
• first to the scene chasing: many tow truck operators race to the scene of a collision in order to secure a towing contract before their competition. This creates or contributes to unsafe road conditions and puts pressure on drivers to hire an initial operator without considering other options
• unsafe environment: recent increases in violence and crime in the sector have created unsafe work environments for people who work in or interact with the towing sector (for example, customers, enforcement officials, other tow operators). This has led to legitimate towing businesses intentionally avoiding collision tows where the threat of violence is high

Participants provided suggestions to improve safety by improving industry standards, including:

• adding specialized driver’s licences for each class of tow trucks
• requiring background checks for tow truck drivers, operators and brokers
• establishing equipment standards for tow trucks
• requiring standard operating procedures when towing or removing a vehicle
• providing apprenticeship or baseline training for towing operators on topics such as safe towing practices, customer service and customer protection requirements, and considering continued education over time
• reducing the use of first to the scene practices, possibly through technology such as the development of an application or a rotating system

Oversight and enforcement

Participants identified challenge areas for oversight of the towing industry and enforcement, including:

• patchwork of requirements: the towing industry is subject to requirements that are housed under several different acts, and bylaws that may vary between municipalities. This can make the requirements difficult for customers and legitimate operators to understand and provides opportunities for unethical operators to avoid accountability
• insufficient oversight: the patchwork of requirements spread across multiple acts and jurisdictions and the lack of a regulator dedicated to addressing issues in the towing sector has resulted in an unequal playing field for towing operators, and inadequate protection for customers
• inefficient dispute system: the current dispute resolution system for RSLA claims burdens court services, creates delays, and exposes customers and insurers to significant expenses
• regulations with a narrow scope: current regulations are not equipped to address the complexity of the towing market, which enables unethical actors to exploit parts of the experience including towing, storage, repair, and insurance claims
• limitations in records requirements for tracking: limited requirements for tracking records for business owners have allowed unethical businesses to avoid accountability for their past actions

Participants suggested opportunities to increase and support enforcement, such as:

• increasing enforcement capacity, including on the ground police presence
• providing dedicated enforcement staff to document collision scenes to identify potential HTA charges and fraudulent injury claims
• requiring companies to meet strict guidelines to be able to provide a tow for the OPP
• screening and conducting licence-checks of towing services operators on-scene
• introducing clear and escalating penalties for violations (for example, financial penalties, truck seizures, or revocation of licences)

Participants also suggested opportunities for more consistent oversight, such as:

• creating a provincial legislative framework to standardize requirements across municipal jurisdictions
• developing consistent standards for tow truck drivers and tow trucks
• creating a central data collection system to provide reliable and current information for customers and enforcement officials to access when seeking knowledge about drivers and operations

They also suggested opportunities to improve the reporting and complaint processes through providing a standardized, fast, and simple dispute and resolution system under an independent administrative body or dedicated tribunal hearing board for issues related to towing, collision repair body shops, and insurance claims.

Protections for industry competitiveness

Participants identified challenge areas for businesses, including:

• unfair competition: legitimate operators in the towing sector are losing business to unethical operators who break the rules or use intimidation tactics
• limited growth opportunities: a few municipalities have restricted the number of new licences they offer, blocking market access to new entrants. Meeting the requirements of various municipal bylaws makes it difficult for some operations to adapt
• limited new towing operators and drivers: the sector is unable to attract new talent due to some of the current challenges in the industry. In some areas, this may leave customers or police services without access to a critical service
• receiving payments for services: tow operators sometimes have difficulties receiving payment for services when a vehicle has been abandoned or damaged
• preferred providers: some police officers and municipal bylaws favour certain towing services operators over others in a collision scenario. This practice is considered unfair by other operators as it limits business opportunities, especially when there is no clear way to be added to the preferred list of providers

Participants provided ideas for opportunities to regulate the entirety of the towing industry, including:

• considering towing, storage, and repair services in any regulatory changes
• creating a regulated definition and licence for repair and storage facilities
• operating storage and repair facilities through an industry and provincial partnership
• requiring insurance providers to be in contact with customers before a tow is authorized
• considering all parties a customer may be referred to through the towing experience (repair shops, storage facilities, medical practitioners, etc.) to ensure that ethical practices are followed at each step
• considering location when developing regulations to recognize longer distances travelled in rural areas, or smaller operators who may tow, repair and store vehicles in more rural areas
• identifying areas for the industry to self-manage within the framework

Conditions for success in a new regulatory model

Industry partners agree that the current regulatory model does not result in a positive customer experience and that there are many opportunities for change. The consultation identified conditions for a successful regulatory model, including:

• balancing urgent actions and longer-term transformations
• regulatory changes to address reasonable fees
• regulatory changes to allow for fair open market competition and profitable industry for small and independent operators
• raising industry standards while not creating unnecessary burdens
• providing clear lines of authority, enforcement responsibilities, and resourcing
• collaborating with industry to define elements of the licensing requirements

Public consultation

From December 11, 2020, to January 15, 2021, more than 1,400 people shared their experiences and challenges with the towing industry. This feedback helped inform the development of a provincial oversight model that will increase safety, outline protections for customers, improve towing industry standards and consider tougher penalties for violators.

Issues and challenges with towing

The government asked people about their satisfaction with towing in Ontario and any issues they might have experienced.

• More than half of the respondents (57%) indicated they experienced no issues and were neutral to very satisfied with their towing experience. However, responses varied significantly across the province.
• Torontonians were the most likely to report issues (53%), while respondents living in Northern Ontario were the least likely to report issues (20%).

Issues also varied significantly by how the tow truck operator was selected. The percentage of respondents who reported issues was:

• 78% among those who hired a tow truck that showed up at the scene when the truck was not explicitly called
• 65% among those who hired a tow truck as directed by police
• 15% among those who called a tow truck operator directly
• 10% among those who called an automobile association or roadside assistance program such as the Canadian Automobile Association (CAA), Canadian Tire Roadside Assistance, TD Auto Club, etc

The most common issues that respondents experienced included:

• experiencing predatory sales tactics (33%)
• being charged an unreasonably high fee (29%)
• being unclear about rights and responsibilities in a towing scenario (26%)

Respondents indicated that the following issues had the largest negative impact on their towing experience:

• being charged too much (65%)
• being pressured to use a particular service (64%)
• unclear, misleading or incomplete paperwork (43%)

Opportunities for action

The government asked people about the actions Ontario should take to improve the experience of requesting and receiving a tow.

Respondents indicated Ontario should prioritize the following actions:

• improve enforcement of unethical conduct in the towing industry (68%)
• set mandatory caps for rates to help ensure reasonable prices (67%)
• standardize billing practices for towing and storage services (51%)
• implement mandatory training and licensing for tow truck drivers (50%)

Recommendations for next steps

The task force identified actions based on consultations and research that will help to:

• increase safety and enforcement
• clarify protections for customers
• improve industry standards
• strengthen penalties for violators

Joint forces operation

The task force recommended the creation of a joint forces operation between the OPP and municipal police services. The joint forces operation:

• is intelligence-led (uses data and analytics to support decision-making)
• investigates criminal activity in the towing sector and promotes information sharing between police
• helps police take actions against those responsible for serious crimes in the industry
• helps to level the playing field for lawful operators
• helps to reduce rates of roadside intimidation and violence

Tow zone pilot

The task force recommended that the Ministry of Transportation implement a two to four-year pilot to introduce restricted tow zones on highways. The tow zone pilot launched in December 2021.

The goals of the pilot are to:

• ensure tow operators have the training, experience and proper equipment to clear highways safely and efficiently
• reduce congestion and delays on provincial highways by clearing the highway more quickly
• help ensure reasonable tow rates for drivers by providing standard pricing and invoicing for towing services in the restricted tow zone

Licence condition or endorsement

The task force recommended that the province develop a licence condition or endorsement that tow truck operators would need to obtain before they operate a tow truck for commercial purposes.

This would help to:

• ensure that all tow truck drivers have the skills and knowledge necessary to safely and efficiently provide roadside towing services, including in collision scenarios
• professionalize the sector and deter criminal activity

Tow vehicle and equipment standards

The task force recommended that the province better define the types of vehicles that can be used as a tow truck for commercial purposes.

This action would help to ensure that vehicles being used to provide tows for commercial purposes are capable of safely performing a tow.

Technical advisory group

A technical advisory group of key stakeholders was established to provide ongoing feedback to the government throughout the development of regulations for the towing and storage sectors.

Clarifying customer protections

The task force recommended that education and awareness materials are updated to clarify current consumer protections with appropriate contact information.

New certification and customer protection standards

The task force recommended the province develop new legislation to establish a comprehensive provincial oversight model for the towing and storage sectors.

In June 2021, Ontario passed the Towing and Storage Safety and Enforcement Act, 2021 to make the towing industry safer and more consistent across the province.

Under the Towing and Storage Safety and Enforcement Act:

• tow operators, tow truck drivers and vehicle storage operators will need to be certified and meet requirements and standards beginning in 2024
• standards for customer protection and roadside behaviours will be established including penalties for non-compliance beginning in 2024

In preparation for bringing the Towing and Storage Safety and Enforcement Act into force, we will continue to consult with industry, stakeholders and the public to identify requirements to support the towing industry and customers.