The Canadian Trucking Alliance (CTA) and Teamsters Canada jointly wrote federal officials with suggestions on how to combat the illegal misclassification scheme in trucking known as Driver Inc.
Ottawa, December 19, 2022 – The president of Teamsters Canada, François Laporte, and the president of the Canadian Trucking Alliance, Stephen Laskowski, issued the following joint message to the Government of Canada on the issue of Driver Inc. :
The Driver Inc. scheme sees truck drivers illegally misclassified as corporations. As a result, drivers lose out on labour protections, like vacation time and paid sick days, and receive less total compensation. Governments also lose over $1 billion in lost revenue since incorporated drivers and their employers are not making deductions or otherwise evading taxes.
As the largest voices in Canada’s trucking industry, representing both labour and ownership, Teamsters Canada and CTA expect vigorous enforcement action to be taken against those non-compliant with Canada’s labour and tax laws. A level playing field, where everyone abides by a fair set of labour laws and tax obligations, is key to creating good jobs and maintaining an efficient supply chain. That’s why enforcing current rules and cracking down on Driver Inc. is so important.
To date, both Employment and Social Development Canada (ESDC) and the Canada Revenue Agency (CRA) have launched various forms of enforcement and education campaigns to tackle the issue. But the problem has only grown recently, and it is becoming clear that more action is needed from Ottawa.
Consequently, Teamsters Canada and the CTA are proposing a set of joint actions by federal departments, in cooperation with provincial enforcement agencies. Among them:
- Immediate and proactive enforcement targeting companies known to be engaged in Driver Inc. based in the key regions identified in the CTA’s report on the growth of zero-employee firms.
- Joint ESDC and CRA audits on carrierswho have been identified by ESDC as gross violators of Driver Inc, with a focus on both the company itself and incorporated drivers, also known as personal service businesses (PSBs). All gross violators who also received federal employee wage subsidies (CEWS) should be audited by the CRA to determine if CEWS were given to PSBs.
- Companies found to have gross violations should face the maximum penalty ESDC can levy and must be forced to return all wages and entitlements owed to workers. Follow-up audits should also be required.
- The names of all gross violators should be made public by ESDC and the CRA and enforcement communication should be regularly issued throughout 2023 and beyond to remind Driver Inc. participants of the consequences. Teamsters Canada and the CTA would also like to work with the federal government and the provinces to develop a public awareness campaign focused on educating drivers on misclassification, the consequences of participating in this scam, and legal/government support options if they are being forced into this arrangement by employers.
- Eliminate Driver Inc. from government and crown corporation contracts.The government should amend its own procurement processes to prohibit Driver Inc. companies from bidding and winning public and crown corporation contracts. All bidders should be made to undergo full workers’ compensation and payroll audits.
- Non-compliant trucking companies should be prohibited from participating in any government-led immigration or training support programs.
- Federal-provincial coordination and action: Upon identification of federal transgressions, ESDC should automatically notify corresponding provincial workers’ compensation boards (WCB) of infractions. In turn, ESDC and CRA should accept audit results from provincial authorities who have identified Driver Inc. misclassification. Similarly, when gross non-compliance is found, ESDC should also notify the according provincial/territorial transportation officials responsible for safety fitness certificates and carrier oversight to identify whether offending carriers are meeting their requirements under relevant provincial permitting regimes, are maintaining appropriate commercial vehicle insurance, and are not attempting to engage in oversight avoidance.
- In turn, these authorities must immediately cancel the company’s safety fitness certificate and require them to cease operations. The cancellation of safety fitness certificates would also apply to all known affiliated companies and companies under the control and direction of primary carrier ownership, with the information posted publicly.
With over 125,000 members, Teamsters Canada is the country’s largest transportation and supply chain union. The organization represents workers at CP, CN, UPS, Purolator, countless trucking companies, and more. They are affiliated with the International Brotherhood of Teamsters, which represents over 1.2 million workers in North America.
As the leading voice of the trucking industry, the Canadian Trucking Alliance (CTA) is a federation of Canada’s provincial trucking associations, collectively representing some 4,500 carriers, owner-operators and industry suppliers.