The upcoming budget will allocate funds to combat a tax evasion scheme known as “Driver Inc.” in the trucking industry, which has been criticized as a billion-dollar scam. This scheme involves misclassifying drivers as independent contractors instead of employees to avoid payroll taxes. The government plans to invest $19.2 million annually starting in 2026-27 to address this issue effectively.
The allocated funds will support the Canada Revenue Agency in enhancing compliance efforts. Jobs Minister Patty Hajdu emphasized the importance of preventing misclassification, stating that it exploits workers, deprives them of their rights, and creates an unfair advantage for companies following the rules. The focus is on protecting vulnerable workers, many of whom are newcomers to Canada.
Stephen Laskowski, the President and CEO of the Canadian Trucking Alliance (CTA), has been advocating for government action on this matter for nearly a decade. The CTA has been alerting federal and provincial authorities about the problem since 2018, which has now escalated into a crisis involving compliance, road safety, drug trafficking, human rights violations, labor law infringements, and tax fraud.
The Bloc Québécois, in its pre-budget requests to the federal government, highlighted the need for tax reforms to address the Driver Inc. issue. Transport Minister Steven MacKinnon acknowledged that the government’s response aligned with one of the Bloc’s demands. While the Bloc welcomed the government’s initiative, it called for further action and urged for an official inquiry into driver exploitation in the trucking sector.
During a parliamentary committee session, Conservative MP Philip Lawrence pressed Minister Hajdu for a definitive timeline to eliminate the Driver Inc. problem. Hajdu linked the misclassification of truck drivers to a deregulation policy implemented during the tenure of former Prime Minister Stephen Harper. According to witnesses, lifting the moratorium on penalties for incomplete or missing entries on T4A tax slips could help identify and deter those involved in the Driver Inc. scam.
Overall, the government’s commitment to addressing the Driver Inc. scheme signifies a significant step towards ensuring fair labor practices and combating tax evasion within the trucking industry.