“Doing the right thing isn’t always easy, in fact sometimes its real hard but just remember that doing the right thing is always right.”
The above quote precisely describes the ongoing struggle of the trucking associations and human rights activists towards rectifying the practices under the “Driver Inc. Scheme”.
Driver Inc. Scheme
Driver Inc. Scheme has invited a lot of attention from the Trucking Industry as well as from outside the industry. Some associations and organizations have created furore in recent years referring to the scheme as a faulty practice, which according to them has not just resulted in repeated exploitation of the truck/trailer drivers but has also caused massive loss to Canada’s exchequer.
A large number of trucking companies register their employees as a corporation and make the remuneration not as an employee but as a corporation or a contractor. To be precise, there is no paycheck in the name of the employee and this gives the companies the liberty to save the tax deductions. It is also being alleged that these companies exploit the employees by depriving them of various rights and entitlements provided by the Canadian government under the Labour Code.
CANADA LABOUR CODE
Cross section of media has highlighted numerous complaints over the years made to the Canadian government about the Labour Code Violations carried out by the Trucking Companies under the Driver Inc. Scheme.
These include Canada pension plan, health and safety standards, paid sick leave, employer contribution to Employment Insurance, and workplace injury compensation according to the province.
It is noteworthy that in wake of ongoing protests and submissions by various organizations/associations fighting for the rights of employees in Trucking industry, the government of Canada is seriously considering of discontinuing Driver Inc. Scheme. In November 2022, Government of Canada released its Fall Economic Statement which had a specific mention of safeguarding the rights of road transportation workers, categorically pointing towards the companies using Driver Inc. Scheme.
In November 2021, Government initiated a pilot enforcement project with an aim to apprise transportation employers about the amendments in Labor Code and it was found that more than 60% of drivers were working in stark violation of the misclassification rules.
CTA and Teamster Canada
Canadian Trucking Alliance (CTA) and Teamsters Canada have stood for the rights of the workers. Over the years, the associations have given repeated representations to the government demanding an immediate discontinuation of the Driver Inc. Scheme.
It was their coordinated efforts that drew the attention of the Canadian government towards the practices of the scheme and its repercussions on the Trucking Industry.
In November 2021, the Federal Labour Minister Seamus O’Regan met the representatives of CTA and Teamsters Canada promising that the Government is committed to put an end to the scheme. The interactions also pointed towards the “Labour shortage” which can only be dealt with if they are promised a safe and secure place to work.
The above associations also recommended audits, penalties and forced payback for the companies violating Labour Code. In addition, the alliance made recommendations for strict action against the companies functioning under the Driver Inc. Scheme.
THE RIGHT APPROACH
Manitoba Trucking Association (MTA) on its website has referred to the right approach under Driver Inc. stating that if you are a carrier who employs self-employed individuals, owner-operators or independent contractors but are refraining from taking source deductions, then it becomes mandatory to issue T4As to those contractors, just like you issue T4s to employees. It further says that the T4A will include all amounts paid to the self-employed individual and he/she can then use this slip to file taxes and submit necessary remittances. Issuing of T4As to the employees will mean compliance with CRA regulations.
POINTS TO PONDER OVER
- Under Driver Inc. Scheme, there is alleged siphoning of more than $1 Billion of tax revenue which according to the government data causes major loss to Canada’s Exchequer.
- Trucking Companies complying to the labour and tax laws cry foul stating that the Scheme creates an uneven field in the trucking industry.
- Canadian Government has proposed to provide Employment and Social Development Canada (ESDC) with $ 26,3 million over five years starting from 2023-24 to act against defiant employers.
Undoubtedly, the truck drivers play a significant role in Canadian economy as they are responsible for moving goods across the country. Their growth is imperative to the overall growth of the country which makes it all the more important to safeguard their rights.
