Trucking group says Canadian government has ‘fallen short’ in addressing ‘Driver Inc.’
The Canadian Trucking Alliance has launched a social media and public relations campaign aimed at raising awareness about the tax and labor scheme known as “Driver Inc.”
According to the alliance, the business model “opens the door to the possibility of widespread tax evasion and allows companies to sidestep the Canada Labour Code and all the rights and entitlements afforded to employees.”
The alliance alleges that Driver Inc. is a tax and employee misclassification scam in which a trucking company has its employees register as a corporation. Rather than giving their employees a paycheck, the company will pay the employees’ new corporation. Because the company is paying another corporation, they are not producing a normal paycheck, meaning the payments are free from tax deductions. Because of this, the company also doesn’t pay into social programs or workers’ compensation funds – significantly affecting the protections and government programs typically reserved for employees and not incorporated entities.
Teamsters Canada has also spoken out against the practice.
Victims of the scheme could lose access to some of the benefits, according to the Alliance. Among them:
- Group health and dental insurance plans.
- Compensation if injured while working.
- Paid parental leave.
- Employment insurance.
- Government pension upon retirement.
- Ability to claim overtime pay, paid sick days, vacation pay, severance pay, and the 10 paid statutory holidays.
The alliance calls the campaign their “largest push to date” in the fight against Driver Inc. – a fight they’ve been undertaking for more than five years.
“It is estimated that this scheme sees the siphoning away of over $1 billion a year in tax revenues from vital Canadian services and infrastructure, with that lost tax revenue being funneled into the underground economy,” the Alliance said in a statement. “As a result, Driver Inc. has produced an uneven playing field in the trucking industry as it puts labor and tax compliant companies at a severe competitive disadvantage.”
As part of the campaign, a website was developed to help educate the public as well as elected officials about the scheme and its effects in hope of spurring action from the Canadian government. Stephen Laskowski, president of the Canadian Trucking Alliance, says the scheme has pushed the trucking industry to its breaking point.
“As CTA has been warning, the industry is approaching the point of no return as upwards of 25% of the industry is estimated to be involved in some form of the Driver Inc. scheme already,” Laskowski said in a statement. “Without committed action by the end of the year, this model will likely become solidified as the dominant employment practice as the government moves ahead with the implementation of Bill C-3 – Paid Medical Leave and other planned Labour Code reforms, which Driver Inc. companies claim do not apply to them.”
The alliance claims the Canadian government has fallen short of its commitment to end the nefarious practice – noting a lack of progress since 2018, when then-Federal Minister of Employment, Workforce Development and Labour Minister Patty Hajdu introduced a bill to address the Driver Inc. scheme.
In its statement, the Alliance calls upon the Canadian government to take immediate action:
- Move to a robust and proactive national enforcement approach that sees all regional offices engaged in identifying and auditing suspected Driver Inc. companies.
- Have the Department of Finance and the Canada Revenue Agency commit to a coordinated approach with Employment and Social Development Canada to eliminate the widespread abuse taking place due to the practice.
The Canadian Trucking Alliance asks citizens to contact their elected officials and encourage them to take action against the illicit practice and share the campaign on their social media platforms. LL
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