Driver Inc. fight may be a lost cause
When I sold my trucking business in 2012, a one-page filing mistake landed me a seven-figure headache. Eleven years and three court dates later, Canada Revenue Agency (CRA) finally resolved it.
My dealings with CRA put me in a front-row seat on Canada’s tax-restitution rollercoaster. It also made me realize that a resolution to Driver Inc.—where truck drivers are paid like gig workers—is going to feel like an endless, stomach-turning loop.
To be clear, the government’s inaction on how to deal with Driver Inc. is a black eye on our industry.
For years, some newcomer carriers have had a competitive advantage by skirting their tax obligations on driver employment. The shadiest operators are doing it at the expense of immigrant workers whose continued exploitation is a form of human trafficking.
I applaud our industry leaders for their commitment to the battle over Driver Inc. But this fight may be a lost cause.
It’s time we think differently about the future of trucking and employment. Because Driver Inc. is here to stay.
Broken federal promises
Every ounce of blame for this out-of-control monster rests with the federal government.
Last fall, Labour Minister Seamus O’Regan promised “enforcement that bites, that’s punitive, and hurts.” He said we’d see details in the 2023 budget. There was nary a mention in the 270-page document.
From a CRA perspective, Driver Inc. costs taxpayers $1 billion a year. That’s a drop in the bucket compared to Canada’s overall federal tax gap. The difference between what the government is owed versus what it collects was a whopping $111 billion from 2014-18.
I’ve seen what happens when CRA commits to recovering tax dollars. Is this not worth the effort?
No T4s issued
Trucking isn’t the only industry with a Driver Inc. problem. Workers everywhere aren’t interested in being employees. T4s are not in their vernacular.
Yet the issue is getting worse in our industry as truckers struggle to hire drivers. According to Trucking HR Canada, the vacancy rate for trucking jobs in 2022 more than tripled since StatsCan began collecting such data in 2015. Vacancies are more than twice as high as in 2019, before the pandemic.
Trouble finding warm bodies is a threat to our country’s economy. The best option is gig workers.
Do you think Prime Minister Justin Trudeau is going after this vote-rich sector 18 months (or sooner) before an election, at the expense of immigration?
No real deterrent
The proposed $250,000 fine for carriers is a frigging joke. It’s a small price to pay for an unlimited source of drivers and the ability to grow.
Paying drivers as subcontractors can by some estimates save a fleet around 20% per truck. Assuming a truck costs $200,000 to operate, that’s $40,000 per truck in annual savings.
In other words, if you get caught cheating, as long as you have more than six independent contractors, you’re in the black! And customers don’t give a hoot about how drivers are paid.
A vicious circle
The supply of Driver Inc. workers continues to grow to meet demand.
I’ve seen estimates that 56,750 Canadian drivers are now paid as independent contractors. Many think that number is significantly higher.
Trying to shut down Driver Inc. will be a vicious circle. By the time one file winds through the court system, 25 more “no-employee fleets” will have opened their doors.
On the off chance that a fleet is shut down, its drivers won’t convert to employees for a legacy carrier. They’ll switch hats and drive for another new fleet.
No easy solution
For trucking company owners, there is no easy solution to Driver Inc.
Some owners of legacy carriers are standing on principle. They don’t want to cave into a tax scheme they believe is illegal.
Others are bowing to internal pressures from younger staff who say the only way to fill vacant seats is with independent contractors.
Others are fighting back by issuing drivers T4As, hiding behind driver services, and setting up creative owner-operator schemes.
A growing number are waving the white flag and wanting to sell.
The fact is, waiting for the government to act on Driver Inc. is not the answer. Thinking differently and adjusting accordingly is.
Our leaders should continue to level the playing field and hold the government accountable. I’m just not sure what winning looks like anymore. It feels like trucking and Driver Inc. are in for a long ride together, with no one responding to our screams to get off.
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.
Thank you Mike for saying it like it is.
Between the never never plans (SCAMS) and the Driver Inc. Carriers its hopeless.
Finally somebody is calling it what it is SLAVE LABOR, Between threats of sending drivers back to the homeland and the never never plans these carriers don’t make money HAULING Freight they STEAL from the workers.
There isn’t a shortage of Drivers there is a shortage of FAIR compensation for Drivers, to KEEP the good guys in it.
Hello when the government will stop that scam?
Driving truck driver inc?????
They don’t wanna pay taxes
I drove truck 30 years
Now u can compete because they don’t need employees they need scam bags and is a perfect way to tax and slavery
When these driver inc find they will have no pension contributions and questionable workers compensation they will be burdens of the government and the taxpayers will be looking after them. Let’s just inforce the laws. Just because it’s difficult is no excuse to let this slide
The problem is the current payroll model needs to be at a least $27. Hr for local drivers plus overtime and O T R drivers with 5000 hr of experance at $30 cd plus a $15 day per deim . A number of drivers servies are paying $28.50 hr on payroll or $36.30 to. A corp account
A driver has about a 7,000 a yr advantage to use the corp ac and substandard medical insurance. Untill we set up proper payroll standards with overtime and sick pay is the only way to keep good driver
Canadian dream=bought licenses, cash jobs,live in flop houses, no taxes.then complain when you get paid when or what you deserve