Whoever Invoices The Shipper

A load moves from Ontario to British Columbia. One carrier picks it up, another runs the linehaul, a third makes the final delivery. Three invoices are raised. Only one of them should carry tax, and in a great many cases all three do.

A Note On Currency

Everything here is stated as verified in August 2026 and requires confirmation before reliance.

Our principal CRA source is GST/HST Memorandum 28-2, Freight Transportation Services, dated August 2017, which replaced a version dated January 1999[1]. CRA states that the information in it does not replace the law found in the Act and its regulations[1].

We quote section 11 of Part VII of Schedule VI as reproduced in two commentary sources[2][3], and did not read Schedule VI directly.

Two definitions we rely on are truncated in the sources we obtained, being freight transportation service and continuous freight movement. We flag both where they appear.

One source is an industry association setting out its own interpretation, which we identify as a position rather than as authority[5]. One is a railway's customer tax overview from 2013[6], which is old and commercial.

A 1996 CRA interpretation we use refers to GST at 7 percent[7], which dates it plainly. We use it for reasoning, not for rates.

This is not tax advice.

This Is Not About Exports

The point to establish first, because it defeats the intuition most people bring. This section is our own analysis.

Zero-rating is generally associated with international trade. Goods leave the country, so Canada does not tax them, and the supplier still recovers its input tax.

The interlining rule is not that. Commentary states that the interline freight rules zero-rate interline settlements between freight carriers, whether the settlements are in respect of domestic or international movements[4].

So a load moving entirely within Canada, from a Canadian shipper to a Canadian consignee, generates zero-rated supplies between the carriers moving it.

Three consequences.

An operator who has concluded that zero-rating does not apply because nothing crosses a border has reached the wrong answer for the wrong reason.

The rule is structural rather than trade-related. Its purpose is to tax the freight movement once, at the point where it is sold to the customer, rather than at every handoff along the way.

And it means the analysis has to be done on every multi-carrier movement, not only on international ones, which is a much larger population of transactions.

Commentary dates the rules to the inception of the GST in 1991[4]. They are not new, and that is part of the difficulty: a practice established decades ago is rarely revisited.

The Provision

The rule itself, quoted as commentary reproduces it.

Section 11 of Part VII of Schedule VI provides for a supply of a freight transportation service made by a carrier of the property being transported to a second carrier of the property being transported, where the service is part of a continuous freight movement and the second carrier is neither the shipper nor the consignee of the property being transported[2][3].

Commentary describes the definition of a freight transportation service as including the transportation of tangible personal property, including mail, but not including baggage transportation provided as part of a passenger transportation service[2].

A CRA interpretation gives the opening of the statutory definition as a particular service of transporting tangible personal property, with an inclusive list following[7]. That definition is truncated in the source we obtained and we do not complete it.

On continuous freight movement, commentary gives the definition as a freight transportation service provided by one or more carriers, to a destination specified by the shipper[2]. That too is truncated in our source.

Our own observation on the part we have: the definition contemplates one or more carriers expressly, and anchors the movement to a destination specified by the shipper. The shipper's instruction is what makes a sequence of legs into one movement.

Three Conditions

Breaking the provision down. This breakdown is ours.

Carrier to carrier. Both parties must be carriers of the property being transported. A supply to someone who is not a carrier is outside the rule.

Part of a continuous freight movement. The service must form part of a single movement to a shipper-specified destination, rather than a separate engagement.

The second carrier is neither the shipper nor the consignee. This is the condition that does the real work, and it is expressed negatively.

Two observations.

All three must hold. Commentary and CRA both describe the rule as applying where these circumstances exist, and the failure of any one takes the supply outside it[2][3].

And the third condition is what stops the rule from zero-rating the sale to the customer. If the person you are billing is the shipper or the consignee, you are at the end of the chain, and that is the taxable supply.

So the structure is: one taxable supply at the customer end, and zero-rated settlements behind it, however many carriers are involved.

The Rule Turns On Who Invoices

The practical formulation, which is how the industry actually applies it.

Commentary states that under the rules, only the carrier who settles a domestic freight bill directly with the shipper or consignee, the first carrier, is required to collect GST on the bill. Where that carrier makes payments to other interline carriers to help move the property, the rules deem each interline carrier to have supplied freight transportation services to the first carrier, not to the shipper, and those services between carriers, and any other disbursements to the interline carriers, are zero-rated[4].

Another puts it from the owner-operator's side: where an owner-operator provides a freight transportation service on behalf of a carrier, and the carrier invoices the customer, the owner-operator's service is zero-rated[3].

Our own illustration of how counterintuitive the result is.

Carrier A picks up in Ontario and hands the load to carrier B for the run to British Columbia.

A invoices the shipper, so A charges tax on the freight bill.

B invoices A rather than the shipper, so B's supply is zero-rated.

Identical trucks, identical miles, opposite treatment. The variable is the commercial relationship, not the transport.

How CRA Describes It

The Agency's own framing, quoted from its memorandum through an industry source.

Paragraph 44 of the memorandum is quoted as stating that several carriers may participate in the supply of a freight transportation service in the course of a continuous freight movement from the origin of the freight movement to its destination, where only one carrier invoices the shipper or consignee. Where this occurs, the carriers participating in the movement are considered to be interlining, and that process is a common practice within the freight transportation industry and is subject to special treatment for GST/HST purposes[5].

CRA's own guidance for freight carriers lists among zero-rated supplies interlining, including the services that are part of a continuous freight movement, alongside a continuous inbound freight movement, a continuous outbound freight movement, and freight forwarders' services, each subject to conditions[8].

Two observations, ours.

CRA's description makes the single-invoice structure explicit: interlining is defined by the fact that only one carrier invoices the customer.

And the phrase common practice matters. This is not an exception for unusual arrangements. It describes how a large part of Canadian freight normally moves.

Zero-Rated, Not Exempt

A distinction that determines whether this is a benefit or a burden.

CRA's guidance sets out that for exempt supplies, you do not charge or collect the GST/HST and you cannot claim ITCs to recover the GST/HST paid or payable on expenses related to making those supplies[8]. Interlining is listed among the zero-rated supplies rather than the exempt ones[8].

Commentary states the consequence directly: because the relationship is a zero-rated supply, the interliner does not have to collect and remit GST/HST, but is nonetheless able to claim ITCs for expenses they incurred while interlining[2].

Two consequences, ours.

An interliner is in the best available position. It charges no tax, which simplifies its billing, and it recovers tax on fuel, repairs, equipment and everything else.

Which means an owner-operator working exclusively as an interliner may be in a persistent refund position, claiming credits against no collected tax.

That is worth naming because a persistent refund position attracts attention, and an operator in it should expect to be able to explain why. The explanation is straightforward, and it is much easier to give if the interlining analysis was documented at the time rather than reconstructed.

You Do Not Need A Truck

A definitional point that widens the rule considerably.

An industry source states that subsection 123(1) defines carrier to mean a person who supplies a freight transportation service within the meaning assigned by the Schedule VI definition, and that a person is not required to perform a freight transportation service in order to be considered a carrier; the person need only assume liability as a supplier of a freight transportation service[5].

Three consequences, ours.

A business can be a carrier without moving anything. What makes it a carrier is contracting as the supplier of the movement.

Which means the interlining rule reaches arrangers as well as haulers, provided they have taken on that supplier position.

And it explains a structure the industry uses constantly: a company that sells freight movement to shippers and buys it from truck fleets is a carrier at both ends, and the settlements behind it can be zero-rated.

We flag that this proposition comes from an industry association stating its own reading[5]. It is a reasoned one and it is consistent with the statutory definition as that source quotes it, but it is a position rather than authority, and the next section explains why that matters more than usual here.

Liability Is Not Defined

The soft joint in the analysis, and the source flags it themselves.

The same source notes, immediately after setting out the assumption-of-liability test, that there is no definition of liability[5].

Our own analysis of why that matters.

The whole extension of carrier status to non-hauling businesses rests on assuming liability as a supplier. If liability is undefined, the boundary of carrier status is undefined with it.

Three practical consequences.

Whether a particular arrangement confers carrier status turns on the contract: who is answerable to the shipper if the freight is late, damaged or lost.

A business that disclaims liability in its terms, describing itself as arranging transport rather than supplying it, is arguing against its own carrier status.

And the same business may present itself differently to different audiences, taking on liability commercially while disclaiming it in its standard terms. Those two documents will be read together.

We are not offering a conclusion about any particular arrangement. The point is narrower: an undefined term sitting at the centre of a widely used treatment is a place where positions are held by practice rather than by analysis.

The Load Broker Question

An application of the foregoing which one part of the industry states as settled and which we report as a position.

The association's stated interpretation is that the relationship between the Carrier and the Load Broker on a domestic shipment is zero-rated pursuant to the interlining interpretation, and that when the Load Broker invoices the shipper or the consignee on a domestic move, GST/HST must be applied, based on the rates of the province in which final delivery occurred[5].

It adds that since the inception of the GST it has been the association's position that invoicing between Load Brokers and Carriers is zero-rated[5].

We report that carefully, and this is our own framing.

It is an industry association's interpretation of CRA's memorandum, described by the association as its position, held consistently for a long time.

A long-held industry position is evidence of practice. It is not the same as a ruling, and the association does not present it as one.

The analysis it rests on is coherent: if a load broker is a carrier by virtue of assuming liability, and it rather than the hauling carrier invoices the shipper, then the hauler's supply is to a second carrier who is neither shipper nor consignee, which is the provision's own language.

The soft point remains the first step. A broker that is not a carrier is not within the rule at all, and that turns on the undefined liability question above.

A Truck With A Driver, Or A Driver

A distinction from a CRA interpretation that produces opposite answers on facts that look similar.

The interpretation addresses the difference between cases where a driver and truck are hired versus a driver only[7].

On the driver-only case, it states that the person providing the freight transportation provides the vehicle and hires the driver for his or her driver services, and that driver services are a business input[7]. The passage is truncated at that point in the source we obtained and we do not complete it.

What we can draw from the part we have, and this is ours.

Supplying a truck with a driver is capable of being a freight transportation service, because the supplier is transporting the property.

Supplying a driver alone is characterised as driver services, being an input to somebody else's transportation service rather than a transportation service itself.

If that is right, the two are on opposite sides of the interlining rule. One can be zero-rated; the other is an ordinary taxable supply of services.

On our own illustrative figures, $180,000 of such charges at 13 percent is $23,400 of tax that should either appear on the invoices or not, depending on which of the two the arrangement actually is.

We flag firmly that we did not obtain the conclusion of CRA's reasoning and are describing a distinction rather than stating a rule.

When The Carrier Is The Shipper

The condition that fails most often, illustrated by CRA.

The same interpretation states that the supply would qualify as an interline settlement if the recipient is not the shipper, and that if it were the shipper, for example because it was mailing its own promotional literature, then the supply would not qualify as an interline settlement under section 11, and the freight transportation would be subject to tax[7].

It adds that persons on contract to make the deliveries, who do not invoice the customer directly, are entitled to zero-rate their billing to a courier company as part of an interline freight settlement[7].

Two observations, ours.

The example is a good one because it is ordinary. A business distributing its own material is the shipper of that material, whatever else it does for other people.

So the same company can be a carrier on one load and a shipper on the next, and its subcontractors' treatment changes with it.

The practical instruction is that carrier status is not a permanent attribute of a business. It is a characterisation of a party in respect of a particular movement, and a business that moves its own goods alongside its customers' has both characters on its books in the same period.

Moving Empty Equipment

A specific case worth isolating, from a carrier's own customer guidance.

A railway's tax overview states that a carrier becomes a shipper when the transportation service is for empty equipment, and that these domestic movements will be assessed the GST unless the movements represent the domestic segment of a continuous inbound or outbound freight movement and a declaration to this effect is provided[6].

We note that this source is a railway's commercial customer guidance dated 2013 and is not authority.

The reasoning it reflects is straightforward and is ours to draw out.

When equipment moves empty, there is no customer's property being transported. The party wanting the equipment moved is the owner of it.

So that party is the shipper of its own equipment, and the third condition of section 11 fails, because the recipient of the transportation service is the shipper.

The practical consequence for a fleet is that repositioning moves are not interline settlements. A carrier paying another carrier to reposition trailers is buying transportation of its own property, not participating in a customer's freight movement.

The Mirror Error

The failure this article exists to describe. This section is our own analysis.

The interlining rule is unusual among the classification questions in this series because getting it wrong is easy in the direction that looks safe.

A small carrier subcontracting to a larger one raises an invoice. Charging tax feels correct, cautious and normal. Nobody complains, because the recipient claims it back.

Except that on the analysis above, the supply was zero-rated, and no tax was properly payable on it.

So two things have happened at once.

The interliner has charged and remitted tax it should not have charged.

The prime carrier has claimed an input tax credit for tax that was never payable.

Only the second of those is a problem CRA has an interest in finding, which is the subject of the next section.

Tax Charged In Error Is Not Recoverable

The consequence, and it lands on the party that did nothing wrong. This section is our own analysis.

An input tax credit is a credit for tax paid or payable on an acquisition. CRA's own description of exempt supplies uses that formulation, referring to the tax paid or payable on expenses[8].

Where a supply is zero-rated, no tax is payable on it. An amount charged and described as tax on such a supply is not tax that was payable.

So the prime carrier's credit rests on an amount that does not meet the condition, and it is deniable.

Three consequences.

The party assessed is the one that received the invoice, not the one that raised it. The prime carrier did not decide how the interliner would bill.

CRA is not out of pocket, because the interliner remitted the amount. The assessment recovers a credit rather than unpaid tax.

And the prime carrier's loss is real cash. It paid the amount to its subcontractor and cannot recover it from the Agency.

This publication has described the same structure elsewhere in the intermediary context, where an over-charging supplier imposed unrecoverable cost on its customer. The freight version is the same mechanism operating across an entire industry practice rather than in a single relationship.

What That Costs

The magnitude, computed by us on illustrative figures.

Take a prime carrier subcontracting $2,000,000 of linehaul a year.

If interliners charge 13 percent on those settlements, roughly $260,000 of tax appears on their invoices in a year.

Over four years, roughly $1,040,000 of credits claimed on supplies that on this analysis were zero-rated.

Two cautions. The rate is assumed and varies by province, and we did not research penalties or interest, which would be additional.

Two observations, ours.

The exposure scales with subcontracting, which means the carriers most exposed are the ones running asset-light models with large owner-operator or interline networks.

And it accumulates invisibly, because every element of it looks ordinary. An invoice with tax on it, a credit claimed, a return filed. Nothing in the ledger signals a problem.

Our own view is that this is the largest single dollar exposure described in this series that arises from doing something that feels cautious.

The Recovery Route Is Commercial

What a carrier in that position can actually do about it. This section is our own analysis.

The prime carrier's money is with its subcontractors, not with CRA. It paid them an amount described as tax; they remitted it.

So recovery means going back to each interliner and asking for a refund of tax charged in error, which each of them would then have to address in its own returns.

On our own figures, a carrier with 40 subcontractors and $260,000 of tax charged in a year is chasing an average of roughly $6,500 from each of them.

Three practical difficulties.

Some of those businesses will have ceased trading, which in owner-operator networks over a four-year period is not a remote possibility.

Others will have no incentive to cooperate, since correcting their own returns is work for no benefit to them.

And the amounts are individually small enough not to litigate and collectively large enough to matter, which is the worst combination.

The instruction that follows is prospective rather than remedial: this is a problem to prevent by getting the invoicing right, because the cure is fragmented and slow.

The International Rules Are Separate

A boundary on this article.

CRA's guidance lists a continuous inbound freight movement and a continuous outbound freight movement, being an international freight service, as separate categories of zero-rated supply, each subject to conditions, alongside interlining and freight forwarders' services[8].

Two observations, ours.

These are different provisions with different conditions. A movement can be zero-rated because it is international, or because it is an interline settlement, and the analysis is not the same.

And a single movement can engage both: an international movement handled by several carriers has an international question at the customer end and an interlining question behind it.

We have not worked through the international conditions and this article does not describe them. A carrier moving freight across a border needs those provisions rather than this one, and the two sections below touch only the documentary features we encountered.

The Declaration And The Processing Trap

Two documentary points from a commercial source, reported with its limitations.

A railway's customer guidance refers to a declaration by the shipper under a specified paragraph of Part VII, notes that the declaration can be stamped on the shipper's bill of lading, and states that movements to reloading and storage facilities can be zero-rated when the shipper provides a declaration that the property is for export[6].

It also states that a transportation service cannot be zero-rated if the property is further processed, transformed or altered in Canada after a shipper transfers the property to a carrier[6].

We note again that this is a railway's customer guidance dated 2013, not authority, and we did not verify either proposition against the legislation.

Two observations, ours, offered as prompts rather than conclusions.

The declaration is a document the carrier does not control. It comes from the shipper, and a carrier zero-rating without it is relying on a fact it has not evidenced.

And the processing point is a substantive condition dressed as a documentary one. Goods that are worked on in Canada after being handed to a carrier may take the movement outside export zero-rating, which is something the carrier will not observe and the shipper may not mention.

Freight Forwarders And Customs Brokers

An adjacent question we raise without resolving.

A CRA interpretation states that it must first be determined if the customs broker is arranging the freight movement as an agent or has assumed liability for the transportation, and refers to a further section of Part VII zero-rating certain international freight forwarding services provided by an agent to an unregistered non-resident client where the service is to purchase an otherwise zero-rated freight transportation service for the client[9].

Two observations, ours.

The first sentence is the same question as the carrier definition, approached from the other side: has the intermediary assumed liability for the transportation, or is it arranging as agent.

Which connects this directly to the agency analysis this publication has addressed separately in the disbursements context. Whether a person acts as agent or as principal decides both what they are supplying and how they should bill it.

We did not obtain the further section referred to and do not describe its conditions. A forwarder or broker whose position depends on it needs the provision itself, and needs to answer the agency question first.

What The Auditor Actually Examines

The enquiry in practice. This section is our own analysis.

Input tax credits claimed on subcontracted linehaul, which is where the exposure sits.

Whether the supplier invoiced the shipper or the prime carrier, on each settlement.

Interline agreements and contracts of carriage, showing who assumed liability to the shipper.

Whether the business was ever the shipper, including of its own goods and its own empty equipment.

Driver-only arrangements, which on CRA's reasoning may be a different supply.

Shipper declarations supporting any export zero-rating.

Persistent refund positions, which are consistent with genuine interlining and should be explicable.

The first item deserves emphasis because it inverts the usual enquiry. The auditor is not looking for unremitted tax; the tax was remitted. They are looking for credits claimed on supplies that carried no tax, which is a review of purchase invoices rather than of sales.

What Records Survive

Interline agreements, establishing the carrier-to-carrier relationship and who is liable to the shipper.

Bills of lading and contracts of carriage, showing the movement and its specified destination.

Settlement statements distinguishing carrier-to-carrier settlements from supplies to shippers.

A written position on carrier status where the business arranges rather than hauls.

Records identifying own-goods and repositioning movements, where the business is the shipper.

Shipper declarations for export movements, retained per movement.

Terms distinguishing truck-and-driver from driver-only arrangements.

What To Do

Do not assume zero-rating means international. Commentary states the interline rules zero-rate settlements on domestic movements as well.

Ask who invoices the shipper. That carrier charges tax; carriers behind it in the chain do not.

Check all three conditions. Carrier to carrier, part of a continuous freight movement, and the recipient is neither shipper nor consignee.

Review purchase invoices, not just sales. The exposure is in credits claimed on interline settlements that should have carried no tax.

Settle your carrier status in writing. The extension to non-hauling businesses rests on assuming liability, and the source setting out that test notes liability is undefined.

Separate own-goods movements. A business shipping its own material is the shipper, and its subcontractors are not interlining.

Treat repositioning separately. On one industry description, a carrier moving empty equipment is the shipper of it.

Distinguish hiring a truck from hiring a driver. CRA's reasoning suggests driver services are a business input rather than a transportation service.

Collect shipper declarations for export movements. The carrier cannot evidence the export without them.

Expect to explain a refund position. A dedicated interliner claims credits against no collected tax, which is correct and worth being able to demonstrate.

The Limits Of This Analysis

Several caveats matter. This is not tax advice. Everything is stated as verified in August 2026 and requires confirmation. We did not read Schedule VI directly and quote section 11 as reproduced in commentary. Two statutory definitions we rely on are truncated in our sources, being freight transportation service and continuous freight movement, and we do not complete either. We did not obtain the conclusion of CRA's reasoning on driver-only arrangements and describe a distinction rather than stating a rule. Our principal CRA source is a memorandum dated August 2017 which states that its information does not replace the law. The proposition that a person need only assume liability to be a carrier, and the load broker application of it, come from an industry association stating its own interpretation, which we report as a position rather than as authority; that source itself notes that liability is undefined. Two documentary propositions come from a railway's commercial customer guidance dated 2013, which is neither authority nor current, and we did not verify them. A CRA interpretation we rely on refers to GST at 7 percent, dating it plainly. We have not worked through the conditions for inbound or outbound international movements at all, and this article does not describe them. We did not obtain the freight forwarding provision referred to. We did not research penalties or interest, place of supply rules, the Quebec Sales Tax, or provincial rate determination beyond noting one source's statement about final delivery. All arithmetic is our own, uses an assumed rate and hypothetical volumes, and is illustrative only. The mirror error analysis, the input tax credit consequence, the commercial recovery difficulty and the audit examination structure are our own.

Related Reading

Compliance & Reporting Three Tests, All Of Which Must Hold The other claim CRA examines closely in road transport, on the driver's side of the business. Sales Tax Whose Expense Was It The agency question that decides whether an intermediary is supplying or merely arranging. Sales Tax Recovering Input Tax Credits Why a credit needs tax that was actually payable, and what happens when it was not.

Frequently Asked Questions

We only move freight within Canada. Does interlining apply to us?

Yes. Commentary states the interline freight rules zero-rate settlements between carriers whether the movements are domestic or international. Concluding that zero-rating cannot apply because nothing crosses a border is the most common way of getting this wrong.

Which carrier charges the tax?

The one that invoices the shipper or consignee. CRA's memorandum describes interlining as occurring where several carriers participate in a continuous freight movement but only one invoices the customer. Settlements between the carriers behind that invoice are zero-rated.

Our subcontractors charge us GST. Is that a problem?

It can be a serious one, and it falls on you rather than them. If the supply was zero-rated then no tax was payable, and an input tax credit requires tax that was payable. On our illustrative figures, $2,000,000 of subcontracted linehaul a year puts roughly $260,000 of credits at risk annually.

Can we be a carrier if we do not own trucks?

An industry association's stated position is that a person need only assume liability as a supplier of a freight transportation service, without performing it. That is a reasoned reading rather than authority, and the same source notes that liability itself is not defined, so the answer turns on your contracts.

We hired a driver but supplied our own truck. Same treatment?

Possibly not. A CRA interpretation distinguishes hiring a driver and truck from hiring a driver only, and describes driver services as a business input. We did not obtain the conclusion of that reasoning, but the distinction is real enough that the two arrangements should be documented differently.

We are always in a refund position. Is that a red flag?

It is the expected result for a dedicated interliner, which charges no tax on zero-rated settlements while recovering tax on fuel, equipment and repairs. It is worth being able to explain, which is far easier if the interlining analysis was documented at the time rather than reconstructed under enquiry.

References

1. Canada Revenue Agency. GST/HST Memorandum 28-2, Freight Transportation Services, August 2017, replacing the version dated January 1999, on the memorandum explaining how the GST/HST applies to supplies of freight transportation services and other related supplies, including zero-rated supplies listed in Part VII of Schedule VI to the Excise Tax Act; and on the information in the publication not replacing the law found in the Act and its regulations. Note: a CRA primary publication; we obtained its scope statement and rely on a quotation of one paragraph through reference 5. canada.ca
2. Rotfleisch & Samulovitch PC. Interlining Transportation Services and Input Tax Credits, GST/HST, on Schedule VI listing zero-rated supplies with Part VII dealing with transportation services; on section 11 of Part VII providing for a supply of a freight transportation service made by a carrier of the property being transported to a second carrier of the property being transported, where the service is part of a continuous freight movement and the second carrier is neither the shipper nor the consignee; on a freight transportation service being defined to include the transportation of tangible personal property including mail but not baggage transportation provided as part of a passenger transportation service; on continuous freight movement being defined as a freight transportation service provided by one or more carriers to a destination specified by the shipper; on interlining describing a relationship whereby a shipping or delivery company contracts with a separate delivery company to deliver goods on behalf of a shipper; and on the interliner not having to collect and remit GST/HST because the relationship is a zero-rated supply, while nonetheless being able to claim input tax credits for expenses incurred while interlining. Note: a tax law firm publication. The definitions quoted are truncated in the source we obtained. mondaq.com
3. SpenceDrake Tax Law. Interlining and GST/HST, on the text of section 11 of Part VII of Schedule VI; on the example of a Canadian trucking company picking up a shipment in Ontario and transferring it to another carrier in Manitoba for delivery to British Columbia; and on CRA guidelines providing that where an owner-operator provides a freight transportation service on behalf of a carrier and the carrier invoices the customer, the owner-operator's service is zero-rated, allowing input tax credits to be claimed for GST/HST paid on expenses incurred to provide the interlining services. Note: a tax law firm publication dated June 2026. sdtaxlaw.ca
4. Canadian Bar Association, Commodity Tax, Customs and Trade Section. Big Trouble for Little Carriers?, on the zero-rating rules for interline freight going back to the inception of the GST in 1991 and to sections 1 and 11 of Part VII of Schedule VI; on the interline freight rules zero-rating interline settlements between freight carriers whether the settlements are in respect of domestic or international movements; on only the carrier who settles a domestic freight bill directly with the shipper or consignee being required to collect GST on the bill; and on the rules deeming each interline carrier to have supplied freight transportation services to the first carrier rather than to the shipper, with those services and any other disbursements to the interline carriers being zero-rated. Note: a professional association member article. cba.org
5. National Transportation Brokers Association. GST/HST Reporting Requirements, quoting paragraph 44 of CRA's memorandum to the effect that several carriers may participate in the supply of a freight transportation service in the course of a continuous freight movement where only one carrier invoices the shipper or consignee, in which case the carriers participating are considered to be interlining, a common practice subject to special treatment for GST/HST purposes; on subsection 123(1) defining carrier as a person who supplies a freight transportation service within the meaning assigned by subsection 1(1) of Part VII of Schedule VI; on a person not being required to perform a freight transportation service in order to be considered a carrier, needing only to assume liability as a supplier of one; on there being no definition of liability; and on the association's interpretation that the relationship between a carrier and a load broker on a domestic shipment is zero-rated, that GST/HST must be applied when the load broker invoices the shipper or consignee based on the rates of the province in which final delivery occurred, and that invoicing between load brokers and carriers has been zero-rated since the inception of the GST. Note: an industry association setting out its own interpretation, which we report as a position rather than as authority. ntba-brokers.com
6. Canadian National Railway. GST/HST/QST and Freight Transportation Service: Overview of Taxes, 2013, on a declaration by the shipper under a specified paragraph of Part VII of Schedule VI, which can be stamped on the shipper's bill of lading; on a transportation service not being zero-rated if the property is further processed, transformed or altered in Canada after a shipper transfers the property to a carrier; on movements to reloading and storage facilities being zero-rated where the shipper provides a declaration that the property is for export; and on a carrier becoming a shipper when the transportation service is for empty equipment, with those domestic movements assessed GST unless they represent the domestic segment of a continuous inbound or outbound freight movement supported by a declaration. Note: a railway's commercial customer guidance dated 2013, which is neither authority nor current; we did not verify its propositions against the legislation. cn.ca
7. Canada Revenue Agency GST/HST Interpretation 11995-3, 1 March 1996, Interlining of Flyer Delivery and Driver Services, as reproduced by a tax publication service, on the supply qualifying as an interline settlement between carriers if the recipient is not the shipper, with the consequence that the freight transportation would be zero-rated; on the supply not qualifying under section 11 if the recipient were the shipper, for example where it was mailing its own promotional literature; on persons on contract to make deliveries who do not invoice the customer directly being entitled to zero-rate their billing to a courier company as part of an interline freight settlement; on the opening of the statutory definition of freight transportation service as a particular service of transporting tangible personal property; and on the distinction between hiring a driver and truck and hiring a driver only, with driver services described as a business input. Note: accessed through a secondary reproduction; it refers to GST at 7 percent, dating it plainly. The passage on driver-only arrangements is truncated and we do not complete it. taxinterpretations.com
8. Canada Revenue Agency. GST/HST Information for Freight Carriers, on services supplied to another carrier under an interlining agreement and part of a continuous freight movement; on zero-rated supplies including a continuous inbound freight movement subject to conditions, a continuous outbound freight movement being an international freight service subject to conditions, interlining including services that are part of a continuous freight movement, and freight forwarders' services subject to conditions; and on exempt supplies meaning that no GST/HST is charged or collected and that input tax credits cannot be claimed to recover GST/HST paid or payable on related expenses. Note: a CRA primary publication. canada.ca
9. Canada Revenue Agency GST/HST Interpretation 11645-3-4/11640-3/11995-1, 21 August 1995, as reproduced by a tax publication service, on it first being necessary to determine whether a customs broker is arranging the freight movement as an agent or has assumed liability for the transportation; and on a section of Part VII of Schedule VI zero-rating certain international freight forwarding services provided by an agent to an unregistered non-resident client where the service is to purchase an otherwise zero-rated freight transportation service for the client. Note: accessed through a secondary reproduction; we did not obtain the provision referred to and do not describe its conditions. taxinterpretations.com

This article is provided for general informational purposes and is not tax advice. Schedule VI was not read directly, and two statutory definitions relied on are truncated in the sources obtained. The carrier-status proposition and the load broker application come from an industry association stating its own interpretation, which itself notes that the key term is undefined. Two documentary propositions come from a railway's 2013 customer guidance and were not verified. The conditions for inbound and outbound international movements are not addressed at all. All arithmetic is the authors' own and is illustrative only.