Licence Appeal Tribunal File Number: 17861/CVOR and 17862/CVOR

In the matter of an appeal under subsection 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8 from a Fleet Limitation Order of the Registrar of Motor Vehicles.

Between:

SMC Group of Companies Inc. o/a SMC Towing Group and D & M Tilt ’N Load Inc.

Appellants

and

Registrar of Motor Vehicles

Respondent

DECISION

ADJUDICATOR:

Colin Osterberg

APPEARANCES:

For the Appellants:

Robert Riddell, Paralegal

For the Respondent:

Patrick Moore, Counsel

Heard by videoconference:

January 19 and 20, 2026

OVERVIEW

1SMC Group of Companies Inc. o/a SMC Towing Group (“SMC”) and D & M Tilt ’N Load Inc. (“D&M”) (together, the “appellants”) appeal under s. 50(1) of the Highway Traffic Act, R.S.O, 1990, c. H.8 (the “Act”), from an order of the Registrar of Motor Vehicles (the “Registrar”) issued on October 9, 2025, to impose a Fleet Limitation Order containing six conditions on both companies. (the “Order”).

2The appellants filed appeals with the Licence Appeal Tribunal (the “Tribunal”) pursuant to section 50(1) of the Act. The appeals have been ordered to be heard at the same time.

3In accordance with section 50(2) of the Act, the Tribunal may confirm, modify or set aside the Order.

ISSUES

4The issues to be determined are:

1. Whether the Registrar has established that it has reason to believe, having regard to the safety record of the appellants or of a person related to the appellants, that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and any other laws relating to highway safety pursuant to s. 47(1)(f) of the Act; and

2. If so, should the Order be confirmed, modified, or set aside.

RESULT

5I find the Registrar has established that it has reason to believe, having regard to the safety record of the appellants or of a person related to the appellants, that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and any other laws relating to highway safety. The Order is confirmed.

ANALYSIS

6Pursuant to s. 47(1)(f) of the Act, the Registrar may suspend or cancel the plate portion of a permit and a CVOR certificate if the Registrar has reason to believe, having regard to the safety record of the holder or of a person related to the holder, and any other information that the Registrar considers relevant, that the holder will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety. Section 47(2) of the Act provides that, as an alternative to a suspension or cancellation, the Registrar may restrict the number of commercial motor vehicles that may be operated by a holder of a CVOR certificate during the period that the Registrar stipulates.

7Section 17(4) of the Act states that an applicant is related to a person if:

1. the applicant and the person are related individuals:

2. either the applicant or the person is a partner of the other or was a partner of the other or they have or have had partners in common;

3. either the applicant or the person, directly or indirectly, controls or controlled or manages or managed the other; or

4. the applicant and the person have or have had common officers or directors, or they are or have been controlled, directly or indirectly, by the same shareholders.

8Section 47(2.1) of the Act provides that section 17(4) applies with the modifications necessary for determining “related persons” for the purposes of s. 47(1)(f) and by extension s. 47(2).

9SMC and D&M have common officers and directors and are controlled directly or indirectly by the same shareholder and are related to one another in accordance with s. 17(4) of the Act. Pascal Loyer (“Loyer”) is the sole officer and director of both companies and both companies are controlled and managed by Loyer.

10Paul Boileau (“Boileau”) is Loyer’s father and is related to SMC and D&M. Loyer has operated commercial motor vehicles under Boileau’s CVOR in the past and represented Boileau dealing with the Ministry of Transportation (“MTO”) including at a show-cause hearing with respect to Boileau’s safety record in 2021. The appellants did not argue that Boileau is not related to SMC and D&M for the purposes of s. 17(4) of the Act.

11The Registrar and the Tribunal are required under s. 47(1)(f) to have regard to the safety record of SMC, D&M, and Boileau when determining whether each of the appellants’ CVOR certificates ought to be subject to the restrictions authorized by s. 47(2). The Tribunal owes no deference to the Registrar in arriving at its decision.

12With respect to the standard of proof, it is “reason to believe.” In applying similar wording in another regulatory statute, that is, “reasonable grounds for belief,” the Ontario Court of Appeal in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (“Famous Flesh Gordon’s”), 2013 ONCA 157 at 18-19 stated as follows:

The standard of proof provided by s. 6(2)(d) of the Act is that of “reasonable grounds for belief”. As applied to this case, s. 6(2)(d) of the Act required the Registrar simply to show that Mr. Barletta’s past or present conduct provides reasonable grounds for belief that he will not carry on business in accordance with law and integrity and honour. The Registrar does not have to go so far as to show that Mr. Barletta’s past or present conduct make it more likely than not that he will not carry on business as required.

13I find there is no meaningful difference between the words “reason to believe” and “reasonable grounds for belief.” According to the Supreme Court of Canada in Mugesera v. Canada (Minister of Citizenship and Immigration), 2005 SCC 40 at para.114, the standard of proof must be more than “mere suspicion” and will be found to exist “where there is an objective basis for the belief which is based on compelling and credible information.” Further, as set out in CS v. Registrar, Real Estate and Business Brokers Act, 2002, 2019 ONSC 1652 at para. 32, there must be a nexus between the appellants’ past safety records and their ability to operate a commercial vehicle safely.

The CVOR System

14Kevin Kirkham is the senior regulatory compliance administrator with the MTO and gave evidence with respect to the Commercial Vehicle Operator Registration program run by the MTO. In his evidence, he explained the CVOR monitoring system and the historical performance of the appellants in relation to that system.

15The CVOR system is part of the carrier safety rating program whereby the MTO monitors operators and assigns each a safety rating based on several factors including collisions, inspections, and convictions. The purpose of the CVOR system is to promote the safe operation of trucks and buses on Ontario’s roadways.

16Each operator is assigned a “threshold” number of points by which to assess the operator’s performance. The threshold is set based on the number of kilometers the operator is expected to travel in a twelve-month period. Infractions are tracked in a computer database which collects data from various sources including police reports and road safety officer reports. Infractions are assigned points which the computer system expresses as a percentage when compared with the assigned threshold. This percentage is referred to as a violation rate (“VR”).

17VRs are maintained with respect to the three safety factors noted above – collisions, inspections, and convictions – using the assigned threshold and the violation record for the previous two years. The CVOR system keeps track of the violation rates with respect to the three safety factors both individually and combined as an overall violation rate (“OVR”). The OVR is calculated based on a weighted average of the three safety factors with the collision VR contributing 40% toward the OVR, the conviction VR contributing 40%, and the inspection VR contributing 20% of the total.

18Infraction points remain on an operator’s record for two years resulting in a rolling average which is accessible to the Registrar and the operator at any given time. Operators can obtain CVOR Abstracts which provide detailed information with respect to its VRs and OVR, and the Registrar recommends that operators review the abstracts at least twice a year so that they can determine whether there are any problem areas which need attention.

19When an operator’s OVR reaches certain trigger points, the system will flag that as an issue which may need the Registrar’s attention. Generally, when an operator’s OVR reaches 35%, the Registrar will issue a warning letter advising the operator that it needs to take corrective action. When the OVR reaches 50%, a facility audit may take place. At 85%, there may be an interview and at 100% the Registrar will consider sanctions ranging from suspension to cancellation.

20Prior to imposing sanctions, it is the Registrar’s practice to invite the operator to a meeting to discuss its safety record and any remedial measures the operator proposes to employ to improve its performance. This meeting is called a Show Cause Meeting and is conducted by the Deputy Registrar. Following that meeting, the Registrar may issue a Cancellation and Seizure Order, issue a suspension notice, or take no action, giving the operator an opportunity to improve its safety record based on the remedial measures the operator puts forward.

21Mr. Kirkham presented industry averages for all operators in Ontario. As of February 2025, there were 61,773 registered operators in Ontario. 97.75% of those had a OVR of less than 35%, 98.9% had an OVR of less than 50%, 99.43% had an OVR of less than 70%, 99.56% had an OVR of less than 85%,and only 0.17% of operators had an OVR over 85%.

The Registrar’s grounds for issuing the Order

22I find the Registrar has proven there were grounds under the Act to issue the Order.

23The Registrar argues that the safety record of SMC and Boileau are of sufficient concern that the Order limiting the size of the fleets of SMC and D&M for one year is reasonable. It notes that the fleets of those companies are only being limited to their current numbers according to the records it has been provided.

24The appellants argue that they have already taken actions to address the safety concerns raised by the Registrar, that some of the convictions which resulted in SMC’s high OVR should not have been assessed against it or have been addressed by SMC in an action plan it has implemented. The appellants also point out that SMC does not have any, or any significant, history of at-fault collisions included in the OVR and that this should be taken into consideration with respect to its record of safe operations. Finally, the appellants point to the fact that its OVR has been improving, it says significantly, and that the appellants should be given the further opportunity to prove that they can operate safely.

SMC safety history

25The Registrar presented evidence which establishes that in the monitoring period September 2022 to September 2024, SMC’s OVR was 95.7% including 74.7% for convictions and 21% for inspections. This is extremely high with 99.83% of operators in Ontario performing better than SMC. As a result, SMR was given a conditional safety rating in October 2024. As of July 15, 2025, the OVR for SMC was still at 95.7% but by July 31, 2025 it was down to 85.5%.

26The evidence presented was that as of July 31, 2025, SMC’s OVR was made up of 18 pointable convictions, which included seven for speeding, seven for red light camera infractions, two for driving with a defect, and one for an expired permit. All of these convictions are ones which carry with them concerns with respect to the safe operation of motor vehicles on the highway.

27The inspection violations at that time included ones for load security, brake defects, loose wheel fasteners, improper class of licence, lighting defects, and tire defects. Six of the 13 inspection violations were with respect to out-of-service defects which indicate defects which were serious enough that the vehicle could not be driven on the highway. Again, the inspection violations were ones which on their face indicate concerns with respect to the safe operation of SMC’s motor vehicles.

28As a result of the above, on July 31, 2025 a Notice of Cancellation and Seizure was delivered to the appellants and a Show Cause Meeting was held on August 28, 2025. Loyer attended the Show Cause Meeting on behalf of the appellants.

29At the Show Cause Meeting it was noted that Loyer and SMC had been involved in an interview in January 2023, which took place in the context of high OVR results involving Boileau. At that time Loyer attended the interview on behalf of Boileau and SMC. At that time, many of the vehicles operating under Boileau’s CVOR were in fact being operated by Loyer. This was because Loyer was under 25 years old, and he could not obtain insurance if the vehicles were being operated under his own CVOR. At that time, Boileau’s CVOR, which was significantly attributable to SMC and Loyer, showed an OVR of 65.5%. SMC’s OVR at that time was 8.6%

30After the January 2023 interview, Loyer submitted an action plan which included a number of items including:

1. Installing Raven cameras to monitor speed, GPS and to monitor driver and road conditions;

2. Installing Fleetio for daily inspections and maintenance;

3. Semi-annual mechanical inspections;

4. Two-weeks training for new drivers;

5. Quarterly staff meetings.

31In addition, Loyer provided the MTO with its preventative maintenance policy.

32Loyer testified at the hearing that, during 2022, his company was experiencing significant growth and that this caused its safety ratings to suffer. He said that after the interview in January 2023, he implemented the action plan and maintenance plan and this, along with the use of Fleetio, had a significant positive result in the company’s CVOR ratings.

33Loyer was asked in cross-examination why, if he alleges improvement following the January 2023 meeting, SMC’s OVR increased to over 95% by September 2024. Loyer said that although the company’s vehicle maintenance issues had improved, his drivers experienced a number of red-light camera violations and that this was the cause of the OVR increase.

34Loyer initially testified that he did not consider the red-light camera infractions a concern until he found out that those resulted in points being applied to the CVOR certificate. He then changed this evidence and said that he was concerned before that, but did not pinpoint it as a significant issue until approximately July 2023 when he started receiving tickets for those violations. He then spoke to the drivers but they continued to incur red-light camera infractions in September 2023, November 2023, July 2024, and June 2025.

35As noted above, there have been a number of other convictions for safety-related offences since 2023 which have resulted in a very high OVR. The poor safety record as reflected in the high CVOR in July 2025, precipitated a Show Cause Meeting on August 28, 2025. At that meeting, Loyer attended along with James MacKinnon (“MacKinnon”), a compliance consultant who had been hired by the appellants in February 2025. MacKinnon also testified at the hearing. Loyer attributed the increase in OVR to significant increases in the size of his operation, the installation of more red-light cameras, and an insufficiently strict culture of compliance among the drivers.

36After this Show Cause Meeting, the appellants submitted another Action Plan. This time the Action Plan contemplated the use of new Apps including Geotab App for hours-of-service compliance, daily inspection monitoring, and driver behaviour monitoring; Fleetio for maintenance scheduling; Drive Wise for driver training; and the installation of dash cams in all vehicles for the purpose of monitoring driver behaviour.

37In addition, the Action Plan contemplated a progressive discipline policy, more driver training, drug and alcohol policy, and mandatory driver reporting of collisions. According to the Action Plan, by the time of the submission of the Action Plan, the OVR of SMC had reduced to 65.69%.

38According to Loyer’s testimony at the hearing, SMC’s OVR has continued to decline and was in the mid-50% range at the time of the hearing. He attributes this to the retaining of MacKinnon, the hiring of a full-time mechanic, the hiring of a new compliance officer, Stephanie Howsen, and stricter expectations in terms of adherence to rules of the road and significant consequences for poor driving behaviour including termination of non-compliant drivers.

39Stephanie Howsen gave evidence at the hearing and presented as a sincere and competent person. She has been with SMC for four months and is responsible for ensuring that licensing and permitting requirements are complied with as well as monitoring the company’s various software which monitors driver behaviour. She testified that she had not seen the company’s discipline policy and that she was fairly new to the job and to the towing industry. She said that there had been improvements in driver behaviour since her hiring.

40MacKinnon testified that he was hired as a consultant in February 2025 and was aware that SMC’s CVOR record was a problem at that time. MacKinnon has taken a software approach to track behaviours and has tried to integrate the software that SMC is using in order achieve better results. He points out that, since his arrival, the CVOR rates have improved. He has been retained to work 20 hours a week with SMC and expects to remain with the company for the foreseeable future.

41Daniel Bienias is the appellants’ insurance broker. He testified that the appellants’ fleet insurer has a program in which preferred contractors get good insurance rates based on past claims experience and operational protocols. Mr. Bienias testified that the appellants’ claims history is excellent and they are among the most favourably rated companies who are part of the preferred contractor program.

Conclusions regarding SMC

42I find that the Registrar has satisfied the onus on it to show that it has reason to believe that SMC will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other law relating to highway safety.

43SMC’s safety record is poor. It was poor in January 2023 when Loyer undertook to take significant steps to improve its record, it was worse by September 2024, and it was no better by July 2025 when the Notice of Cancelation and Seizure was issued. While the CVOR record had improved by the end of August 2025, it was still terrible. By the time of the hearing, SMC’s safety record as reflected in its CVOR at the time was around 55%, which is still worse than 98.9% of the commercial operators in Ontario.

44That said, the Registrar recognized the improvements that have been accomplished by SMC and in October 9, 2025, rather than cancelling the appellants’ CVOR, it instead issued a Fleet Limitation Order which effectively froze the number of vehicles the appellants could operate under their CVOR certificates at the level that existed at the time, a level which was determined by a review of vehicles in their fleets as provided in a list prepared by the appellants.

45I acknowledge that the appellants have improved their safety record and accept, for the sake of argument, that the improvements have been the result of real changes that have been implemented in the companies’ operations.

46However, I note that Loyer has a history of making improvements in the safety of his operations when confronted by the MTO and then later allowing his safety record to decline. His company’s record improved with an Action Plan, that was reasonably similar to the current Action Plan, after the MTO interview in January 2023, but by July 2025, it deteriorated significantly.

47In my view, SMC’s current safety record, while improved, does not provide sufficient assurance that its motor vehicles will be operated safely and that the Fleet Limitation Order should be set aside. In other words, I find that, despite the recent improvements, the Registrar has proven that there continues to be reason to believe that SMC will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

D&M

48As noted above, D&M is related to SMC. They have the same officer, director, and management personnel. As a result, the safety record of SMC, in addition to any other relevant information, must be considered when determining whether there is reason to believe that D&M will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety and whether its CVOR certificate should be subject to the Fleet Limitation Order.

49I have found that SMC’s safety history provides reason to believe that it will not operate a commercial vehicle safely. The evidence is that Loyer was the person in charge of the operations of both companies and that he bears significant responsibility for the MTO’s concerns about SMC’s safety record. I also have some concerns about Loyer’s insight into the MTO’s safety concerns and how that reflects on Loyer’s commitment to highway safety. At the hearing, Loyer consistently tended to downplay the seriousness of SMC’s safety record by: failing to address red-light camera violations until realizing that those violations might impact SMC’s OVR; downplaying the seriousness of tie-down failures which appear on the inspection reports; suggesting that the companies had improved since 2023 when, in fact, their safety records had significantly deteriorated; and suggesting that the recent improvements, almost all of which have occurred since the Notice of Cancellation and Seizure was issued, should be satisfactory to assure the MTO of SMC’s commitment to operating safely despite several years of poor safety performance.

50In addition, I find Loyer’s intention to continue to grow his companies at this time concerning. Loyer testified that a significant cause of SMC’s poor safety record was the fact that it had grown significantly. He cited that as a reason for his poor performance up to January 2023, and he cited that as a reason for SMC’s poor performance in 2024 and 2025. That Loyer does not see the value in refraining from further growth in the circumstances, at least until he can achieve and sustain an acceptable OVR, is concerning.

51Considering all the evidence, I find that the Registrar has satisfied the onus on it to show that there is reason to believe that D&M will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

Remedy

52While I am not bound by the sanction imposed by the Registrar, I find that it is appropriate in the circumstances. The Order limiting the fleets of SMC and D&M to 21 vehicles and 9 vehicles respectively represents a reasonable balance between the Registrar’s concerns relating to the appellants’ safety records and a recognition that the appellants have taken serious actions to address those safety concerns.

53I also find that the remaining conditions imposed by the Registrar in the Fleet Limitation Order are reasonable. They call for the maintenance of violation rates at reasonable levels, a requirement that the MTO be notified of on-road events and actions taken with respect to involved drivers, and timely payment of fines, failing which the CVOR certificates, plate portion of permits and numbered plates of the appellants may be subject to a Cancellation and Seizure. The Registrar would continue to be required, by the terms of these conditions, to exercise its discretion to take that action reasonably.

54In my view a Fleet Limitation Order as issued by the Registrar is reasonable in the circumstances.

Conclusions

55I find that the Registrar has proven that there is reason to believe, having regard to the safety record of the appellants, and other relevant information, that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

56I find that the Fleet Limitation Order as issued by the Registrar is reasonable.

ORDER

57I confirm the Fleet Limitation Order dated October 9, 2025.

Released: February 10, 2026

__________________________

Colin Osterberg

Adjudicator