The Canadian Trucking Alliance has launched a national campaign to combat what it calls widespread payroll fraud and safety violations in Canada’s trucking sector, warning the schemes cost governments over $5 billion annually in lost revenue.
The Stop Illegal Trucking campaign targets a practice known as Driver Inc., where trucking companies misclassify employee drivers as independent contractors to avoid payroll taxes, employment insurance, Canada Pension Plan contributions and workers’ compensation premiums.
“This isn’t just an industry fight – it’s a public safety and fiscal crisis,” said Greg Arndt, chair of the Canadian Trucking Alliance. “When companies hide behind the Driver Inc. model, lives and livelihoods are put at risk and vital public services lose billions.”
Impact on workers and compliant businesses
According to the alliance, misclassified drivers lack workers’ compensation coverage and statutory benefits typically provided to employees. Companies using the Driver Inc. model operate with payroll costs up to 35% lower than compliant businesses, the organization said.
Marco Beghetto, vice-president of communications at the alliance, said companies that avoid tax and labour compliance also compromise safety standards. “We know that companies that routinely cuts corners when it comes to tax and labour compliance, will most definitely do the same in all areas of their operation, including disregarding public safety by carelessly putting unfit equipment and untrained or poorly qualified drivers on the road,” Beghetto said.
Enforcement concerns
The alliance said the Canada Revenue Agency’s moratorium on T4A enforcement has allowed the practices to spread unchecked. The organization argues existing laws could address the problem without new regulations if properly enforced.
The campaign evolved from an earlier effort called Stop Tax and Labour Abuse. According to the alliance, Driver Inc. schemes have expanded to involve immigration fraud, training and licensing fraud, and in some cases human trafficking and cross-border smuggling.
The organization is calling on the federal government to enforce existing tax and labour laws. Supporters can visit the campaign website to learn more about the initiative.
