Press Conference - Driver inc
Driver Inc, a Tax Avoidance and Labour Abuse Scam, Throws Canada’s Trucking Sector into Crisis
The Driver Inc scam in Canada’s trucking industry is now a crisis hurting drivers, legitimate businesses, and costing the government billions in lost tax revenue.
Ottawa, May 16, 2023 – Teamsters Canada, the Canadian Trucking Alliance (CTA), and the Association du camionnage du Québec (ACQ) have joined forces to call for urgent federal action to put the brakes on the growing Driver Inc crisis in the country’s trucking sector. Successive governments have failed to address the issue, allowing the problem to fester over decades and become a crisis.
The Driver Inc crisis is a tax scam and employee misclassification scam. It sees truck drivers incorporate, often at the request of dishonest employers, under the guise of paying lower taxes and avoiding other payroll deductions. But in reality, these drivers are indistinguishable from regular employees, lacking truck ownership, route choice, or any real degree of independence or financial risk.
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. None of this is legal, and they could end up losing tens of thousands if they are audited. Because they lack information about rights and obligations in Canada, new Canadians and temporary foreign workers are particularly vulnerable to this scam.”
Stephen Laskowski, President of the CTA, emphasized, “The trucking industry is facing an existential crisis due to a labour abuse and tax avoidance scheme. We need the Canada Revenue Agency and the Labour 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, they need to be enforced before it’s too late!”
Marc Cadieux, President of the ACQ, explained, “The Driver Inc scam is costing governments at least $1 billion annually. That’s money that should be going to build our infrastructure and securing our social safety net, but instead is going into the pockets of crooked businesspeople. It has to stop!”
Claude Robert, President of Groupe Robert, is highly concerned about trucking industry’s future. He sends a message to Driver Inc truckers: “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.”
Moreover, drivers taking part in the “Driver Inc” scam have a much harder time claiming employment insurance, overtime pay, vacation pay, severance pay, the ten paid sick days, and other employee benefits accorded under labour legislation. They also report difficulty accessing group health and dental insurance plans, with employers claiming these entitlements are normally reserved for employees – not incorporated entities.
The trucking industry and labour unions are urging the federal government to increase investment in enforcement and penalties for those involved in the Driver Inc scam. In addition, they call for a coordinated effort between the CRA, the Labour Program, and provincial governments to protect truck drivers and preserve the integrity of the trucking industry.
With over 125,000 members, Teamsters Canada is the country’s largest transportation and supply chain union. It’s also the largest union in the federally regulated private sector. The organization represents workers at CP, CN, UPS, Purolator, Robert Transport, countless other trucking companies, and more. They are affiliated with the International Brotherhood of Teamsters, which represents over 1.2 million workers in North America.
The Canadian Trucking Alliance is a federation of provincial trucking associations, representing over 4,500 trucking companies across the country.
The Association du camionnage du Québec is the trucking industry’s provincial association in Québec, representing over 500 trucking companies in the province.
Technical Backgrounder – Driver Inc
A scam is growing in the trucking industry which radically breaks with both the traditional employee and owner-operator models. Known as ‘Driver Inc’, a significant percentage of drivers and carriers are now entering into agreements whereby drivers will incorporate themselves (Personal Services Business (PSB)) and then ‘sell’ their driving services to the carrier.