A group of Canadian trucking industry stakeholders recently held a press conference asking the government to investigate the Driver Inc. tax scam which involves a trucking company requesting that a driver who does not own a truck register as a corporation and then sell that driving service to the carrier.
The group includes the Canadian Trucking Alliance (CTA), Teamsters Canada, Quebec Trucking Association (ACQ), and several logistics companies.
Used by a growing number of companies, the Driver Inc. scam uses the misclassification of employees to avoid paying taxes and other withholdings.
“There are few rules for Driver Inc., just the ones they makeup or cannot get around,” Scott Tilley, president of Tandet Group, said during the press conference. “It doesn’t sound quite legal to me. It seems to be an unsavory bunch. We need to stop these atrocities that are being inflicted upon thousands of truck drivers in Canada through the Driver Inc. structure that has been allowed to begin to take over our industry.”
Another problem with Drivers Inc., according to John McCann of Teamsters Canada, is that it gives some carriers an unfair advantage while mistreating vulnerable drivers.
“The key issue here is about fairness and assuring that all play by the same rules, so that no one employer is able to have an unfair advantage over another,” McCann said. “It’s about assuring that a vulnerable labor force is not taken advantage of simply because they just want an opportunity to work and support their families.”
According to CTA, “Drivers taking part in the Driver Inc. scam have a much harder time claiming employment insurance, overtime pay, vacation pay, severance pay, paid sick days, and other employee benefits accorded under labor legislation.”
Canada’s government has taken some steps to protect drivers. In 2021, amendments to Canada’s labor code went into effect making it illegal to intentionally misclassify employees. Last year, the government also proposed providing the nation’s Employment and Social Development Department with $26 million to fight employers using Driver Inc.
“The Driver Inc. scam is costing governments at least $1 billion annually,” said Marc Cadieux, president of the ACQ. “That’s money that should be going to build our infrastructure and secure our social safety net, but instead is going into the pockets of crooked business people.”