The government has allocated funds in the upcoming budget to address a tax-evasion practice known in the trucking industry as the “Driver Inc.” scam, which has been criticized as a $1-billion scheme. This practice involves companies misclassifying drivers as independent contractors instead of employees to save on payroll taxes.
As part of the federal budget scheduled to be presented on November 4, the Carney government plans to allocate $19.2 million annually starting in 2026-27 to combat this issue. The funds will support the Canada Revenue Agency in enhancing compliance efforts.
Jobs Minister Patty Hajdu emphasized the importance of addressing misclassification, stating that it exploits workers, deprives them of their rights, and creates an unfair advantage for companies that comply with regulations. The focus is on protecting vulnerable workers, including newcomers to Canada.
The Canadian Trucking Alliance (CTA) has been actively advocating for government action on this matter for nearly a decade. The CTA President, Stephen Laskowski, highlighted the urgency of the situation, citing concerns about compliance, road safety, drug trafficking, human rights violations, labor law breaches, and tax fraud within the industry.
The Bloc Québécois welcomed the government’s commitment to tax reform to tackle the Driver Inc. scam, one of the party’s 18 requests ahead of the budget. Transport Minister Steven MacKinnon acknowledged that the government’s response aligns with the Bloc’s concerns.
Despite the progress, Bloc Québécois transport critic Xavier Barsalou-Duval emphasized the need for further action and called for a formal inquiry into driver exploitation in the trucking sector. Conservative MP Philip Lawrence pressed for a timeline to resolve the issue, prompting Hajdu to attribute the problem to deregulation under a previous administration.
The government’s move to lift the moratorium on penalties for T4A tax slips is seen as a crucial step in combating fraudulent practices like the Driver Inc. scheme. Witnesses stressed the importance of regulatory measures in addressing these issues effectively.
