The ATA–CTA proposal stalled in 1997 because of Canada's insistence that US carriers not be exempt from goods and services tax
on their cabotage activities within Canada. By contrast, the US
government's 12% federal excise tax, not being a value-added tax,
would not apply to a Canadian carrier's cabotage activity in the
United States. Revenue Canada wished to apply the GST in two ways:
first, to the value of the service rendered—which was not a grave
concern for the ATA—but, second, to the full market value of the
US equipment to be used in cabotage. This would likely have been
assessed as a one-time levy at the border. Given that the tax base
would be around $500,000 per tractor-trailer, all talk of reform
was shelved. The purpose of such a levy would have been to