CTA wants crackdown on ‘Driver Inc.’ payments

by Truck News

TORONTO, Ont. – The Canadian Trucking Alliance (CTA) continues to sound the alarm about Driver Inc. – a payment model in which drivers who do not own or operate their own vehicle still become incorporated and receive pay without source deductions.

The payment scheme has become so widespread that all carriers may need to consider adopting the approach if they want to compete for drivers, the alliance says, calling on the federal government and provincial compensation boards to intervene.

“Contract drivers who are utilizing company vehicles, without any financial risk/responsibility to own/operate the vehicle, contravenes the historical definition of driver-contractor status in our sector,” said Stephen Laskowski, CTA president. “To now rule against this historic principle, effectively changing the definition, would turn our industry upside down.”

The alliance has been looking to the Canada Revenue Agency to clarify its position on the payment approach – something it estimates is costing the government millions in tax revenue.

“Incorporating yourself as a driver, without owning/operating your own truck, has significant labor law and tax implications. Many drivers and companies utilizing this system seem to think Driver Inc. is some previously undiscovered tax oasis. It’s not. It’s a mirage,” says Laskowski. “The tax filing implications make the Driver Inc. model a very questionable approach to legitimately increasing drivers’ take-home pay. Obviously not declaring your income is a highly illegal method to increasing pay, made easier by the fact that CRA does not always find businesses that don’t issue T4A’s to contractor drivers.”

The CTA wants the Canada Revenue Agency to ensure that companies and drivers are paying their fair share of taxes by filing as a Personal Services Business (PSB), with all company drivers issued a T4 or T4A in 2018.

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  • The Fed can’t even figure out how to pay their own employees, what on earth makes Mr. Laskowski think the Fed would have the wherewithal to affect a crackdown on this particular situation.
    Although, once the Fed figures out how much income tax money they are actually missing out on, they may very well become quite motivated to do so.

  • Nothing new here, I operated this way from 1980 to 1985, I received 25% of the load. I got my own loads. I also greased the truck and trailer to keep things running smoothly. Both of the Trucking companies that I pulled for are no longer in business.

  • We need all truck drivers that do not lease or own a truck to file as employees. Many driver services hire truck drivers and other employees this way. This saves them between 15% and 20% of total payroll costs. Truck drivers with 3000hours experience doing local work need to make 1.6 times minimum wage. O.T.R. Truck drivers need to make 1.9 times the minimum wage and medical insurance while on U.S soil. This system of paying inc drivers is wrong. All driver services should have to pay a 15% tax on top incorporate pay to the province. This money should used for services for truckers and more parking and showers and spots for the homeless shelter system as a lot of truck drivers get taken and quit and I have seen many in the shelters after being a accident when hit from behind by a Ryder truck by a young driver when a stopped for a car in a snow storm. 226 889 9299

  • “Driver Inc.” needs to be dealt with quickly. Its been going on forever . In recent years is become worse with the driver shortage. Its a complete joke. Its hurting honest drivers , companies and the industry in general.

  • What’s the problem with you, shameless & headless person, driver stay away from home, away from kids , family. Is yr head working or not.

  • Since when does the CTA give a rats ass about who’s paying what and how much tax? I agree everyone should operate legally but I think there are far more pressing issues right now in transportation than worrying about who’s registered as what and not collecting taxes. Last time I looked CRA does a great job of this

  • the use of drivers that work as a contract company as i understand it is that the contractor must have a vested interest in the equipment according to CRA he then becomes liable for all employee and employer monies to be remitted to revenue canada for CPP and UI and any other deductions that are mandatory payments He must also carry workers compensation and be covered in iach province that he drives in

  • How about driver wage.specially city drivers.working on low wage.forklift driver and truck driver is almost taking same wage.only difference is hours.more hours more money is the route cause of fatique and accidents.Puting drivers on pay roll is ok but please set a wage of min$25/hr and 12 hours work daily..

  • Maybe it’s time that the CTA starts to mind there own business The Driver Inc. Is the same as a Carpenter Who works for himself. He is a Private Contractor and as a private contractor you can pick and choose who and where you want to work . It is not the CTA’s responsibility to look after what the Private contractor does with his money. The Real problem here is with the CTA and it’s member companies. They are on Power trips They don’t give a crap about the driver. If there is no work or they get Pissed off at the driver then they will just not dispatch them and let them sit at home and starve. As a self employed driver , You don’t have to put up with the CTA and There Member Companies Crap . If they start Screwing you around then you can just go and start working somewhere else. The trucking companies are starved for Truck Drivers. And the problem is not a shortage of drivers, there is a huge amount of drivers available. It’s just they have left the driving industry because if the crap that the OTA and The CTA and the ATA have been doing to the drivers. and the Shortage of Pay and it is the only industry that you have to give up time to the shipper and receiver so YOU can load and Unload there freight. I am 58 years old and have been driving since i was 14 years old I also work in the Construction Industry as an Heavy Equipment Operator. On some jobs i take home more than an Owner/Operator per week (Take Home Per Week After Taxes) and i don’t give up any free time to some shipper or receiver. Want to talk About Speed Limiters. As David Bradley Said it was to Level the Playing Field. It didn’t level the playing field My Fuel is still higher and My insurance is still a lot higher .. But it did Destroy the right lane on the 400 series Highways. Drivers and Owner/Operators Have a Wonderful Day and be safe out there and remember that for every 1 mile of road, there are 2 miles of ditch. Bye for now Brian

    • “Maybe it’s time that the CTA starts to mind there own business”

      Umm, last I checked, anything to do with the trucking industry is the CTA’s business, yeah?

      Thought that was pretty obvious.

  • I wonder how many drivers it keeps *out* of some sectors?
    Tried getting into dump trucking in the GTA, but can’t get on anywhere because I’m not incorporated. I keep hearing I must either incorporate or accept cash.

    I asked one company who I should tell the scale inspector I worked for then, if I was accepting cash, and was simply told, “Oh, you won’t get inspected.”

    As near as I can tell, a contractor also forfeits their right to safe refusal. If a contractor doesn’t want to drive an overloaded dump truck past the HoS, their company can likely terminate their contract without consequence.

  • This CTA Canadian trucking association instead of helping the drivers make them live harder and this is nothing more than a control move from the Canadian companies the big one who can’t retain drivers because of the low pay and now are using CTA like a tool to execute something like that . Okay put me on a payroll but pay me 70 -80 an hour and full benefits we don’t need any organization .Basically the big companies are so greedy they don’t pay accordingly but demand others small businesses to obey which is out of the line the poor driver is not protected by anyone and this is a circus in the transportation business

  • Screw them they are just a tool of the big cheap companies.Nothing new under the sun competition for drivers retention that’s all so ok reimburse my corporation pay me full benefits and 70-80 an hour and overtime and to all

      • No , it is worth more than that . Just to be away from family and the risk involve , sit in the truck for hours with no options to move . Do you thing it’s fun ??? We should get paid extra bucks for every trip or i wouldn’t even start the truck , not worth it . Trucking is not a career , not even a job.

  • In most cases in the GTA area and Brampton area these trucking companies won’t hire you unless you are a driver inc. driver. Saves them paying the drivers source deductions and wsib. More money in the companies coffers. The drivers like it because in some cases they avoid paying taxes. If I was a driver inc., driver I would cash in from the trucking companies by going to the labour board and putting in a complaint claiming that I was misclassified as a contractor when I should have been an employee. This would get me paid some back pay including 2 years of holiday pay and overtime pay I never got being driver inc. and not as an employee as well as a full company driver pay. Instantly fix the problem with a little reverse dynamics.

  • Read a lot of your comments, some good points and some poor arguments. All industries run the same scam of Incorporated Employee structures to save operating costs in a competitive market. I tried to Incorporate as a Driver about 30 years ago due to the overtime tax rate was killing me. But I got flagged and Tax Audited. When it showed I had only one employer in the fiscal year so I was fined and re audited as an employee. The trick is to work for multiple companies and register your pickup as your work truck the same way they do it in Carpentry, Painter, Oilfield Operators, Heavy Equipment Operators. Sports professional athletes are a different set of rules.
    The idea of Driver for Hire is not new and should be recognized as a Driver Operator. If your good you get work and if you are no good you don’t get any work. This puts them on the same playing field as all the others listed above that are skirting the Tax man.
    Just my opinion.

  • Every time I see the expression “Fair Share” makes me sick!!! How fair is that drivers who are always on the road at risk, long hours, working in all weather conditions, specially during the winter, have to pay so much taxes? They should have a break on that famous Fair Share that CRA talks about. Same with oil patch workers in AB. They change health for money! Working at -35°C out in the bush should have a big tax break!!! They make money few months, but the rest of the year they have to take savings from the profitable months. “Fair Share”? Lol. The government should be fair to some workers in Canada