Ever heard of Driver Inc.? Canada's trucking industry is calling it a $1B scam

The nationalist dependable of the trucking manufacture successful Canada is renewing calls for the national authorities to pump the brakes connected what it says is simply a $1-billion scam.

The scam, which the Canadian Trucking Alliance (CTA) has coined "Driver Inc.", occurs when companies incorrectly classify drivers arsenic autarkic contractors, alternatively of employees to save money connected payroll taxes. 

"We judge that successful immoderate parts of Canada at slightest a 3rd of the companies and the drivers are participating successful this, and it's hurting america twofold arsenic a society," said Stephen Laskowski, CTA president and CEO.

"Those are taxes that aren't going into our [economy], and connected the flip broadside of it, it's astir a 30 per cent vantage successful the marketplace."

Laskowski described Driver Inc. as a taxation evasion strategy and says immoderate trucking companies are purposely misclassifying drivers to prevention money. He says drivers besides suffer labour protections including fair pay, overtime and abrogation pay, arsenic good arsenic wellness and information protections.

In 2021, the authorities made it amerciable for federally regulated employers to misclassify employees, and added penalties for non-compliance.

In a connection to CBC, Employment and Social Development Canada (ESDC) said that prohibition was strengthened successful 2024 by placing the load on employers to beryllium a idiosyncratic is not an employee.

However, Laskowski said much needs to beryllium done, identifying Driver Inc. arsenic the biggest existent menace to the industry — including the ongoing Canada-U.S. commercialized war.

"We person worked and pleaded with governments to code it, and the world is they are starting to, but obscurity adjacent to the level that needs to beryllium done. Nowhere near," helium said.

Companies people newcomers

Driver Karanveer Singh agrees there's a deficiency of enforcement against companies that break the law.

Singh came to Canada from India's bluish Punjab state as an planetary pupil erstwhile helium was 18 years old.

"I'm trying to pursuit the Canadian dream," helium said.

But Singh's travel took a detour soon aft helium got his commercial trucking licence. He said the archetypal 2 companies helium worked for misclassified him arsenic an incorporated driver, and besides ne'er paid him.

Singh was capable to beryllium to the Canadian Labour Board that helium had been misclassified and the companies were ordered to wage what helium was owed.

While helium was capable to cod from 1 of the companies, Singh said it's improbable he'll ever spot the astir $40,000 owed by the 2nd company.

"Until the authorities enforces it, it is useless," helium said, referring to the tribunal order. "These companies, they cognize what they are doing…. Most of the clip they volition find caller immigrants, caller motortruck drivers to people due to the fact that they are truthful casual to people due to the fact that each caller migrant is hopeless for a job."

A hard problem

Part of the CTA's solution involves lifting a moratorium connected assessing penalties for failing to implicit the fees for work container of the T4A taxation slip.

Laskowski said that would assistance the CRA place and audit companies that trust heavy connected incorporated drivers.

However, it could besides further dilatory an already sluggish system, according to Ottawa taxation lawyer Dean Blachford.

"With penalties comes disputes and punishment alleviation requests that clog up the system even if they are for tiny amounts," helium explained successful an email to CBC.

"Meanwhile, the companies that are pushing the limits the astir with Driver's Inc. inactive mightiness not comply with the T4A request and alternatively instrumentality further evasive means (such arsenic utilizing ammunition companies) to creditor impervious themselves from having to wage the punishment if CRA ever identifies them."

In a connection to CBC, the CRA said it's moving toward lifting the moratorium earlier enforcement commences.

It besides said the bureau is not alert of the investigation underlying Laskowski's assertion that Driver Inc. has resulted successful astir $1 cardinal successful mislaid taxation revenue, and "therefore cannot comment."

Driving down business

The proprietor of Kriska Transportation Group successful Prescott, Ont., is besides urging the national authorities to act, saying the Driver Inc. exemplary is driving companies that do comply with taxation regulations retired of business.

The unfairness makes proprietor Mark Seymour's humor unit rise.

"It's wide known, it's not a soiled small secret. It's retired of control," helium said.

Seymour has been successful the concern much than 4 decades, taking implicit Kriska from his precocious begetter successful 1994.

"I person competed arsenic galore of america person for galore years based connected terms and work wherever terms should beryllium established from the aforesaid crushed rules arsenic everyone," helium said.

"That's paying due taxes, treating radical arsenic employees and successful the mode that the authorities would expect."

Ron and Francie Langevin own P.A. Langevin Transport successful Carleton Place, Ont., and accidental they, too, interest astir the future.

"There's truthful overmuch incorrect with this manufacture close now," Ron Langevin said, adding helium suspects the companies that run nether the Driver Inc. exemplary are truthful focused connected profits that they besides fto information standards slip.

"These issues are falling done the cracks, and the adjacent clip you're driving connected a road with a transport motortruck beside you I privation you to look astatine it and I privation you to wonderment however harmless americium I, really," Francie Langevin said.

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Singh said in his experience, that appraisal is true. He recalled being trained by a precise inexperienced operator who got them into occupation astatine the Port Huron borderline crossing.

"He deed the factual partition implicit determination astatine the border, and I was truthful surprised. Like, this is expected to beryllium my trainer and helium conscionable similar damaged the truck," Singh said.

On his adjacent trip, Singh said he was asked to beryllium the trainer.

"They did not [tell] me a azygous happening and conscionable gave maine a caller grooming operator for maine to train," helium said. "They privation their worldly delivered, they privation their occupation done.

"I deliberation erstwhile these companies are allowed to operate, Canadians are not safe," helium said.

ESDC said it is taking action, precocious entering into an information-sharing statement with the CRA to assistance with enforcement and compliance.

It besides pointed to a dedicated squad of inspectors focused exclusively connected the roadworthy proscription manufacture crossed Canada. Since 2023, ESDC said the squad has conducted astir 540 inspections and held 320 acquisition sessions crossed the country.