The upcoming budget will allocate funds to combat a tax evasion scheme known as “Driver Inc.” within the trucking industry, criticized as a $1 billion deception. The Canadian Trucking Alliance (CTA) has highlighted this scheme, which involves misclassifying drivers as independent contractors instead of employees to reduce payroll taxes.
In the federal budget set to be presented on November 4, the government plans to allocate $19.2 million annually starting in 2026-27 to address this issue. The funds will support the Canada Revenue Agency in enhancing compliance efforts. Jobs Minister Patty Hajdu emphasized the importance of rectifying misclassification, stating that it exploits workers, deprives them of their rights, and creates unfair competition for law-abiding companies, especially impacting vulnerable newcomers to Canada.
The CTA has long been advocating for action on Driver Inc., with President and CEO Stephen Laskowski lobbying the government for nearly a decade. Laskowski highlighted the escalating crisis caused by unchecked non-compliance issues, including concerns related to road safety, drug trafficking, labor law violations, and tax fraud.
The Bloc Québécois, as part of its pre-budget requests, pushed for tax reforms to tackle the Driver Inc. problem, which the government’s announcement directly responded to. Transport Minister Steven MacKinnon acknowledged the Bloc’s role in addressing this issue. The Bloc Québécois expressed satisfaction with the government’s actions but called for further measures and urged for a formal inquiry into driver exploitation in the industry.
During a parliamentary committee meeting, concerns were raised about the persistence of Driver Inc. despite previous reform attempts. The government attributed the misclassification practice to deregulation introduced under former Prime Minister Stephen Harper, which imposed penalties for incomplete T4A tax slips. Ending this moratorium is seen as a crucial step in combating the deceptive Driver Inc. scheme.
