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    • Canadian trucking groups sound alarm over 'tax scam,' call on CRA to step in

    Stephen Laskowski, President of the Canadian Trucking Alliance, speaks during a press conference declaring a crisis in Canada's trucking sector on Parliament Hill in Ottawa, on Tuesday, May 16, 2023. THE CANADIAN PRESS/Spencer Colby Stephen Laskowski, President of the Canadian Trucking Alliance, speaks during a press conference declaring a crisis in Canada's trucking sector on Parliament Hill in Ottawa, on Tuesday, May 16, 2023. THE CANADIAN PRESS/Spencer Colby
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    Several groups representing Canadian truckers are calling on the Canada Revenue Agency (CRA) to help end what they call a 鈥渢ax scam鈥 impacting their industry, which has been going on for years, but has reached the 鈥渃risis鈥 level.

    The groups said at a press conference Tuesday they want to see an end to the 鈥淒river Inc.鈥 model, which they call a 鈥渢ax evasion and employee misclassification scam,鈥 and 鈥渓abour abuse funded by a tax scheme.鈥

    According to the Canadian Trucking Alliance (CTA), the 鈥淒river Inc.鈥 model is when a trucking company tells its drivers to register as a corporation 鈥渢o sell their driving services to the carrier.鈥

    鈥淲hat distinguishes these individuals from 鈥榦wner-operators鈥 is they do not own, lease or operate a vehicle. Instead they drive the carrier鈥檚 vehicles and are virtually indistinguishable from an 鈥榚mployee鈥欌 the CTA says.

    The organization says the practice allows carriers and drivers to avoid certain tax obligations. But because these drivers don鈥檛 get recognized as employees, this has the knock-on effects on the industry of making it harder for drivers to access employment insurance, overtime and vacation pay, severance, sick days, and medical and dental benefits.

    The group raising concerns 鈥 made up of Teamsters Canada, the Canadian Trucking Alliance (CTA), and the Association du Camionnage du Qu茅bec (ACQ) 鈥 also estimates the practice allows carriers and truckers to avoid paying $1 billion a year in taxes.

    鈥淧ut into its simplest form, Driver Inc. is a practice of misclassifying drivers of company owned equipment as independent contractors in order to sell their driving services back to that carrier,鈥 explained John McCann, the national freight and tank haul director for Teamsters Canada. 鈥淏y doing this, those carriers are able to reduce their operational expenses and drastically undercut industry rates by avoiding payment of mandatory employee related service deductions.鈥

    McCann said another key issue is the practice gives some carriers an unfair advantage over others, and called it 鈥渁n abuse of vulnerable workers.鈥

    They鈥檙e calling on the CRA to audit carriers and implement enforcement measures for those who make use of the Driver Inc. practice.

    CRA spokesperson Hannah Wardell wrote in an email to CTVNews.ca the CRA is in regular contact with the CTA and is 鈥渁ware of their concerns.鈥

    She also said the CRA held an educational campaign last fall to help businesses understand their tax responsibilities, but did not say whether efforts are underway to cut down on the Driver Inc. practice specifically.

    鈥淲hen non-compliance is identified, the CRA educates the taxpayer on their income tax obligations, ensures the correct returns are prepared and filed, and takes the necessary enforcement actions to ensure compliance with the law,鈥 Wardell wrote.

    Mariam Abou-Dib, the executive director of Teamsters Canada, said while the federal labour and transport ministries have both been receptive to concerns from the trucking industry about Driver Inc., CRA is a 鈥渕issing partner鈥 in making more substantive changes.

    Stephen Laskowski, president of the CTA, said there are many drivers who engage in the practice willingly, while for others there is a lack of understanding from some drivers about the greater impacts on the industry.

    鈥淩egardless, enforcement needs to happen鈥 he said. 鈥淭his is a crisis. 

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