The government has announced plans to allocate funds in the upcoming budget to address a tax evasion scheme within the trucking industry, known as the “Driver Inc.” scam, which has been criticized as a $1 billion fraudulent practice. This scheme involves companies misclassifying drivers as independent contractors instead of employees to reduce payroll taxes.
As part of the federal budget slated for release on November 4, the Carney government intends to allocate $19.2 million annually starting from 2026-27 to combat this issue. The funding will support the Canada Revenue Agency in enhancing compliance efforts.
Jobs Minister Patty Hajdu emphasized the importance of addressing misclassification, stating that it exploits workers, undermines their rights, and creates an unfair advantage for companies that abide by the rules. The funds will enable the CRA to remove penalties for failing to report service fees on T4A slips and implement a program to tackle non-compliance in personal services businesses.
Stephen Laskowski, the President and CEO of the Canadian Trucking Alliance (CTA), has been advocating for government action on this matter for almost a decade. He highlighted the urgency of the situation, stating that the problem has escalated into a crisis of compliance, road safety, drug trafficking, human rights abuses, labor law violations, and tax fraud.
The Bloc Québécois welcomed the government’s tax reform initiative to address the Driver Inc. scam, which was one of their requests ahead of the budget announcement. Transport Minister Steven MacKinnon acknowledged that the government’s response aligned with the Bloc’s demands. The Bloc Québécois called for further action on the issue and urged for a formal investigation into driver exploitation in the trucking industry.
During a parliamentary committee meeting, Conservative MP Philip Lawrence pressed Hajdu for a timeline on resolving the Driver Inc. problem. Hajdu attributed the misclassification practice to deregulation introduced during former Prime Minister Stephen Harper’s tenure, which suspended penalties for incomplete or missing entries on T4A tax slips. Witnesses suggested that ending this moratorium would help identify fraudulent activities associated with the Driver Inc. scam.
