Is Driver INC. Ungluing Canada’s Trucking Industry?
Once again, we are hearing concerned voices from the trucking industry for the Federal Government to help end the Driver INC practice. Last week Teamsters Canada, the Canadian Trucking Alliance (CTA), and the Association du Camionage du Quebec (ACQ) all joined with a request for action to help end the ongoing problem of Driver Inc.
Driver Inc has been festering and growing over the decades and continues to grow. Repeat governments have been unable to close it down, and now the trucking industry wants to end it.
Last Tuesday (May 16, 2023), a group of officials representing Canada’s trucking industry spoke at a news conference in Ottawa, calling on the government to “stop the atrocities being inflicted on thousands of drivers” through a business model known as Driver Inc.
Driver Inc is a tax scam as well as an employee misclassification scam. It is a way for dubious truck enterprises to have drivers working “off the books”. Under this model, the trucking company pays less for a driver and can underbid legitimate trucking companies paying for all these driver benefits. “Driver Inc.” companies who cheat the system don’t have to pay for employment insurance, sick and vacation pay, health insurance and more. Drivers do not benefit from these plans and risk not receiving benefits if and when they need them.
This illegal operation fools drivers, many of who are newly arrived in Canada and don’t know all the rules and regulations; they just see getting a paying job. But, they miss out on health benefits, sick pay, employment insurance, Canada Pension, and other plans that legitimate trucking companies provide for their employees. Plus, they have to pay their taxes as self-employed incorporations. For drivers, it is a crapshoot, especially for the informed or newcomers to the industry.
François Laporte, President of Teamsters Canada, said, “Truckers engaged in Driver Inc are not only missing out on essential protections like workers’ compensation and employment insurance but are also being duped into believing they’ll have higher earnings”. Many new Canadians and temporary foreign workers don’t necessarily know their rights and privileges and are vulnerable to companies offering this scam. “None of this is legal; they could lose tens of thousands if audited.”
Strong words came from the President of the CTA, Stephen Laskowski, who said, “The trucking industry is facing an existential crisis due to a labor abuse and tax avoidance scheme. We need the Canada Revenue Agency and the Labor Program to tackle these issues with the enforcement resources this crisis needs. We need substantial audits on carriers involved in the Driver Inc scam. The laws are already in place and need to be enforced before it’s too late!”
President of the ACQ, Marc Cadieux, told the press conference, “The Driver Inc scam is costing governments at least $1 billion annually. That money should be going to build our infrastructure and secure our social safety net, but instead is going into the pockets of crooked businesspeople. It has to stop!”
Claude Robert, President of Groupe Robert, was also at the press conference. He shared his concerns about the trucking industry’s future: “There are hundreds of honest carriers in Canada who offer great working conditions to experienced drivers, in accordance with legislation. Reach out and get out of that trap! We need you, and you are more than welcome to work with us.”
The Driver INC scam takes two to tango. The instigator is almost always the crooked trucking company that proposes this fraud by offering the driver money under the table as a “self-employed” contractor. The driver is often unaware of his rights or is a newcomer to the country and the industry and is easily duped into the plan. That’s when the company gets off the hook for paying the driver all the benefits a regular employee would receive.
Sadly, the drivers who participate in the “Driver Inc” scam have difficulty claiming employment insurance, overtime pay, vacation pay, severance pay, up to ten paid sick days, and other employee benefits provided under labor legislation. They would have difficulties accessing group health and dental insurance plans, with employers claiming these entitlements are normally reserved for employees – not incorporated entities.
The trucking industry and labor unions are asking the federal government to increase investment in enforcement and penalties for those in the Driver Inc scam. Plus, they are calling for a coordinated effort between the CRA, the Labor Program, and provincial governments to protect truck drivers and the integrity of the trucking industry.
The trucking industry has repeatedly asked the government for help to end “Driver Inc.” It’s time to hear the cry. Billions of dollars are at stake, money that is not going into the government revenue stream or to bolster legitimate trucking enterprises. That means the health of the industry is weakened, and so too is our economy.
Our supply chain needs to be strong and healthy, as does our tax structure. “Driver Inc.” compromises our tax structure and our corporate well-being and puts all Canadians at risk of a weakened, compromised system.
