Trucking group says Canadian government ‘failed’ in response to ‘Driver Inc.’

The Canadian Trucking Alliance has launched a social media and public relations campaign aimed at raising awareness of the tax and labor regime known as “Driver Inc.”

According to the alliance, the business model “opens the door to the possibility of widespread tax avoidance and allows companies to avoid Canada Labor Code and all rights and privileges granted to employees.

The alliance alleges that Driver Inc. is a tax and employee misclassification scam in which a trucking company has its employees register as a corporation. Rather than giving a paycheck to their employees, the company will pay the new employees company. Since the company pays another company, it does not produce a normal paycheck, which means that the payments are free of tax deductions. For this reason, the company also does not contribute to social programs or workers’ compensation funds, which significantly affects government protections and programs typically reserved for employees and unincorporated entities.

Teamsters Canada has also come out against the practice.

Victims of the scheme could lose access to some of the benefits, according to the Alliance. Among them:

  • Group health and dental insurance plans.
  • Compensation for injury at work.
  • Paid parental leave.
  • Employment insurance.
  • Government pension at retirement.
  • Ability to claim overtime pay, paid sick leave, vacation pay, severance pay and 10 paid holidays.

The alliance calls the campaign its “biggest push yet” in the fight against Driver Inc. – a fight it has been waging for more than five years.

“This scheme is estimated to result in the diversion of more than $1 billion a year in tax revenues from vital Canadian services and infrastructure, with these lost tax revenues funneled into the underground economy,” the Alliance said. . said in a press release. “As a result, Driver Inc. has produced a level playing field in the trucking industry because it puts labor- and tax-friendly companies at a serious competitive disadvantage.”

As part of the campaign, a website was developed to help educate the public as well as elected officials about the program and its effects in hopes of prompting the Canadian government to take action. Stephen Laskowski, president of the Canadian Trucking Alliance, says the regime has pushed the trucking industry to breaking point.

“As CTA has warned, the industry is approaching the point of no return, as it is estimated that over 25% of the industry is already involved in some form or another of the Driver Inc. program,” said Laskowski in a statement. “Without action taken by the end of the year, this model will likely become the mainstream employment practice as the government moves forward with the implementation of Bill C-3 – Paid Medical Leave and other planned Labor Code reforms, which Driver Inc. companies claim do not apply to them.

The alliance says the Canadian government has failed to deliver on its commitment to end this harmful practice – noting a lack of progress since 2018, when the federal Minister of Employment, Workforce Development and of Labor, Patty Hajdu, has introduced a bill to fight Driver Inc.’s scheme.

In its statement, the Alliance calls on the Canadian government to act immediately:

  • Moving to a robust and proactive national law enforcement approach that sees all regional offices engaged in identifying and verifying suspicious Driver Inc.
  • Commit the Department of Finance and the Canada Revenue Agency to a coordinated approach with Employment and Social Development Canada to eliminate the widespread abuses that take place as a result of the practice.

The Canadian Trucking Alliance is asking citizens to reach out to their elected officials and encourage them to take action against the illegal practice and share the campaign on their social media platforms. LL

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