Everyone quotes “two dollars a pound”. Fewer people can say which law puts it there, which shipments it binds, and how a declared value on the bill of lading displaces it.
Key takeaways
There is no single national figure. Canada’s federal regulation on the point says that for an extra-provincial truck undertaking, the conditions of carriage and limitations of liability are those set out in the laws of the province in which the transport originates. Where a province has no such enactment, they are those agreed to by the undertaking. So the honest answer to “what is the limit in Canada” is: name the province where the load originated, then read that province’s conditions of carriage — and if it has none, read your own contract.
British Columbia publishes its conditions in regulation, which makes it the cleanest worked source in the country. Under the Specified Conditions of Carriage in Schedule 3 to Division 37 of the Motor Vehicle Act Regulations, the amount of any loss or damage must not exceed $4.41 per kg ($2 per lb), computed on the total weight of the shipment, unless a higher value is declared on the face of the bill of lading by the consignor. That is the $2-per-pound number everyone repeats, and it is a British Columbia number, not a Canadian one.
Two articles work together, and reading only the second one is where operators go wrong. The first sets the measure of damages: the amount for which the carrier is liable, whether or not the loss results from negligence, is computed on the basis of the value of the goods at the place and time of shipment, including freight and other charges if paid and duty if paid or payable and not refundable. The second is the ceiling on that figure — $4.41 per kilogram of total shipment weight.
So the sequence is: value the goods at origin, then test that value against weight × $4.41. The cap only does work when the value of the shipment exceeds $4.41 for every kilogram on the truck. Below that density, the cap is invisible and the shipper recovers the value of what was lost.
The detail that surprises people
The cap is computed on the total weight of the shipment, not the weight of the damaged portion. Damage 900 kg out of an 8,000 kg load and the ceiling is still 8,000 × $4.41 = $35,280. That is generous to the claimant, and it is why partial-loss claims on heavy freight almost never hit the limit.
Packaged food, 3,200 kg, invoice value $14,000. The ceiling is 3,200 × $4.41 = $14,112. That is more than the goods are worth, so the cap never engages and the claim is measured by value at origin. The carrier’s exposure is $14,000.
Laptops, 1,100 kg, invoice value $180,000. The ceiling is 1,100 × $4.41 = $4,851. Unless a higher value was declared on the face of the bill of lading, that is the number — under three per cent of the invoice. This is the case the shipper’s insurer, not the carrier’s, is really carrying.
Mixed grocery, 8,000 kg total, 900 kg water-damaged, damaged goods worth $19,000. The ceiling is computed on the whole 8,000 kg: $35,280. The claim is measured at $19,000.
The pattern is worth internalising because it drives which loads need a conversation before dispatch. Anything above roughly $4.41 of value per kilogram is a load where the default limit and the shipper’s expectation are far apart.
The cap yields to a higher value declared on the face of the bill of lading. British Columbia builds the mechanism into the document itself: a bill of lading must contain a space to show the declared value of the shipment and a statement in conspicuous form indicating whether or not the carrier’s liability is limited by a term or condition of the carrier’s applicable schedule of rates or by any other agreement with the consignor.
Two things follow. First, a declaration is not free — it changes the risk the carrier is carrying and should change the rate. Second, a declared value can exceed the carrier’s own cargo insurance limit, which converts an insured exposure into a balance-sheet exposure. Whoever accepts the load has to see the declared value before the truck moves, not when the claim lands.
The limit is a ceiling on liability, not the whole liability rule. The starting position is that the carrier is liable for any loss or damage to the goods accepted by the carrier or the carrier’s agent except as provided in the Articles, and then the exceptions bite. A carrier is not liable for loss, damage or delay caused by an act of God, the King’s or public enemies, riots, strikes or a defect or inherent vice in the goods, nor for loss or damage resulting from the act or default of the consignor, the owner of the goods or the consignee, the authority of law, quarantine, or differences in weights of grain, seed or other commodities caused by natural shrinkage.
Interlined freight is joint. The originating carrier and the delivering carrier are jointly and severally liable with any other carrier in whose custody the goods were lost or damaged, with a right of recovery against whichever carrier had custody. That is the provision that makes a broker’s choice of underlying carrier a real exposure rather than a paperwork detail.
Two more articles are worth knowing because they turn up in disputes. The carrier is not bound to carry documents, specie or articles of extraordinary value unless by special agreement — carry them without disclosure and liability is capped at the ordinary limit. And a consignor who ships explosives or dangerous goods without previous full disclosure to the carrier is liable for all loss or damage caused by those goods.
Most claims that fail do not fail on the limit. They fail on notice. The carrier is not liable unless written notice of the loss, damage or delay — with particulars of origin, destination, date of shipment and the estimated amount claimed — is given to the originating or delivering carrier within 60 days after delivery, or within 9 months after the date of shipment where delivery is not made. And the final statement of claim must be filed within 9 months after the date of shipment, together with a copy of the paid freight bill.
Those two dates should be diarised the moment an OS&D exception is noted at delivery, not when the claim file is opened. Sixty days from delivery goes quickly when the receiver’s paperwork takes two weeks to reach the shipper’s claims desk.
There is a related right on the carrier’s side. Where goods cannot be delivered through no fault of the carrier, the carrier may store them after giving notice and requesting disposal instructions, subject to a lien for all freight and other lawful charges, including a reasonable charge for storage. If no disposal instructions arrive within 10 days of that notice, the carrier may return the shipment at the consignor’s expense.
For an extra-provincial carrier the safety framework is national — a safety fitness certificate issued by a provincial authority is valid throughout Canada and the National Safety Code is a set of 16 standards developed by the member jurisdictions of the Canadian Council of Motor Transport Administrators. Liability is the opposite: it stays provincial by design, because the federal regulation deliberately points back at provincial law.
Practically, that means a Winnipeg-to-Calgary load and a Surrey-to-Calgary load can carry different default limits, and neither is governed by a “Canadian” rule. It also means the contract does real work in provinces without a published set of conditions, since the federal regulation defaults to the conditions agreed to by the undertaking. If you operate out of such a province, your standard terms are the limit — so they had better say what you think they say. Treadstone’s sister law firm covers the drafting side in its notes on limitation of liability and indemnity clauses in Ontario contracts and on whether a limitation of liability clause is enforceable.
A Surrey carrier moves 4,800 kg of consumer electronics to Calgary. The commercial invoice says $340,000. Nothing is declared on the face of the bill of lading. A pallet is dropped in a cross-dock and $61,000 of product is written off.
The ceiling is 4,800 × $4.41 = $21,168, computed on the whole shipment. The claim is $61,000. The carrier pays $21,168 and the shipper absorbs $39,832 — unless it can show a term of the contract, a declared value, or conduct that displaces the limit.
Now run it with a declaration. The shipper declares $340,000 on the face of the bill of lading. The cap is gone and the carrier is exposed to the measured loss of $61,000. If the carrier’s cargo policy is written at $100,000, the $61,000 sits inside it. If the same declaration had been made on a load where the whole trailer burned, the $340,000 exposure would exceed that policy by $240,000, and the difference is the carrier’s money. That is the arithmetic dispatch has to be able to do before accepting a declaration.
This is document work, which is where these tools earn their keep. Reading the weight and declared-value fields off an incoming bill of lading or rate confirmation and flagging any load where value per kilogram exceeds the default limit, so a human decides the rate before dispatch rather than after a claim. Extracting delivery dates from proofs of delivery and opening the 60-day and 9-month clocks automatically. Comparing a declared value against the cargo limit shown on the carrier’s certificate and raising an exception when the declaration is larger.
What it does not do is decide. Whether to accept a declared value, whether a claim is covered, what a shipment was worth at origin and whether an exception in Article 5 applies are judgements a person makes and signs. The software finds the numbers and starts the clock.
No. It is the figure in British Columbia’s Specified Conditions of Carriage. Federal law directs you to the law of the province where the transport originates, and where none exists, to the terms the carrier and shipper agreed. Always name the originating province before quoting a limit.
No — and this favours the claimant. The ceiling is computed on the total weight of the shipment, so a small loss on a heavy shipment almost never reaches it.
The regulation itself contemplates a higher value declared on the face of the bill of lading, and requires the document to say in conspicuous form whether or not liability is limited. Anything beyond that is a contract question rather than a regulatory one, and it is worth reading how Ontario courts treat limitation of liability clauses before signing a shipper’s terms that displace the default.
Delivery. Written notice with particulars of origin, destination, date of shipment and the estimated amount claimed must reach the originating or delivering carrier within 60 days after the delivery of the goods. Where delivery never happens, the clock is 9 months from the date of shipment.
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