The government has announced it will allocate funds in the upcoming budget to combat a longstanding tax-evasion scheme in the trucking sector, which industry representatives have labeled as a $1-billion fraud.
The Canadian Trucking Alliance (CTA), representing the nation’s trucking industry, refers to this issue as “Driver Inc.” This scheme involves companies misclassifying drivers as independent contractors instead of employees to reduce payroll tax costs.
In the federal budget scheduled for release on November 4, the Carney administration intends to invest $19.2 million annually starting from 2026-27 to tackle this issue. This funding will assist the Canada Revenue Agency (CRA) in enhancing compliance measures.
“Let me be clear: misclassification is a form of exploitation. It robs workers of their rights and creates an uneven competitive landscape for legitimate businesses,” said Jobs Minister Patty Hajdu during a parliamentary committee session. She noted that vulnerable workers, many of whom are newcomers to Canada, face the greatest impact, believing the system will shield them.
The funding will enable the CRA to lift a hold on penalties associated with unreported service fees on T4A slips and to initiate a program focused on non-compliance concerning personal service businesses and reporting service fees.
Trucking Alliance’s Alarm
Stephen Laskowski, president and CEO of the CTA, indicated that he has been advocating for federal action on this issue for nearly ten years. Earlier this month, Laskowski reiterated his concerns at a federal transport committee meeting.
“Since 2018, the CTA has alerted the federal cabinet and provincial governments about this matter,” he stated. “Issues identified in 2018 have escalated unchecked and, by 2025, have turned into a significant crisis regarding compliance, road safety, drug trafficking, human rights violations, and rampant labor law and tax fraud.”
Bloc Claims Political Progress
Tax reforms aimed at addressing the Driver Inc. issue were among 18 requests submitted by the Bloc Québécois to the federal government ahead of the current budget. Transport Minister Steven MacKinnon acknowledged that the government’s announcement directly aligns with one of the Bloc’s proposals.
In a news release, Bloc Québécois transport critic Xavier Barsalou-Duval expressed satisfaction with the government’s steps but emphasized that additional work is needed and called for a formal investigation into driver exploitation in the trucking sector. He highlighted that previous Liberal reforms have yet to yield significant changes.
