The government has announced plans to allocate funds in the upcoming budget to combat a tax-evasion scheme within the trucking industry known as “Driver Inc.,” which has been criticized as a $1-billion scam. This scheme involves companies misclassifying drivers as independent contractors instead of employees to reduce payroll taxes.
As part of the federal budget scheduled for presentation on November 4, the government intends to allocate $19.2 million annually starting from 2026-27 to address this issue. The funds will be used to enhance compliance efforts by the Canada Revenue Agency (CRA).
During a recent parliamentary committee meeting, Jobs Minister Patty Hajdu emphasized that misclassification of workers is exploitative, deprives workers of their rights, and creates an unfair advantage for companies that abide by the rules. The minister highlighted that vulnerable workers, including many newcomers to Canada, are disproportionately affected by this practice.
The allocated funds will enable the CRA to lift penalties for failing to report fees for service transactions on T4A slips and implement a program to tackle non-compliance issues related to personal services businesses and reporting fees for service.
Stephen Laskowski, the President and CEO of the Canadian Trucking Alliance (CTA), has been advocating on this issue with the government for nearly a decade. He recently reiterated the urgency of the situation at a federal transport committee meeting, emphasizing the need for action to address compliance, road safety, drug trafficking, human rights violations, labor law breaches, and tax fraud within the industry.
The Bloc Québécois, in one of their 18 requests to the federal government ahead of the budget, called for tax reforms to address the Driver Inc. scheme. Transport Minister Steven MacKinnon acknowledged that the government’s response directly addressed one of the Bloc’s demands. The Bloc Québécois welcomed the government’s initiative but suggested further steps and urged for a formal investigation into driver exploitation in the trucking sector.
During the committee session, Conservative MP Philip Lawrence pressed Minister Hajdu for a specific timeline on resolving the Driver Inc. issue. Minister Hajdu linked the misclassification of truck drivers to a deregulation policy introduced under former Prime Minister Stephen Harper, which suspended penalties for incomplete or missing entries on T4A tax slips. Witnesses at the committee highlighted that lifting this moratorium would help the government identify and curb fraudulent activities associated with the Driver Inc. scam.
