Data may suggest growth in Driver Inc. businesses, says OTA

The number of trucking businesses without employees is surging in Ontario’s Peel and Halton regions – a trend the Ontario Trucking Association (OTA) sees as a potential sign of growth in Driver Inc. fleets that misclassify employees as independent contractors.

The Peel Halton Workforce Development Group is reporting a 30% increase in “zero-employee” businesses coded in roles that relate to the trucking industry, according to a Local Labour Market Plan.

Among those involved in general long-distance trucking in June 2021, there were 7,048 businesses with zero employees — a 28.5% increase over the 5,483 counted in June 2019. There were 5,879 in 2020.

Peel Map
Source: Region of Peel

Peel and Halton are both recognized as hotbeds of trucking activity. Transportation and warehousing was the top employer in Peel Region last June, with 39,163 businesses. The sector ranked eighth in Halton Region, with 3,521 businesses.

“As the industry knows, legitimate owner-operators are an important part of the trucking industry and a symbol of the small business spirit that has led to dramatic growth in the trucking industry dating back to deregulation,” OTA president and CEO Stephen Laskowski said in a press release. “But the relevant enforcement entities including the WSIB, ESDC [Employment and Social Development Canada] and CRA [Canada Revenue Agency] should take note as reports like this could also be a clear warning sign that the tax and labor misclassification scam known as Driver Inc., continues to see considerable growth in our sector.”

Employment and Social Development Canada has pledged to use new legislative powers to apply Administrative Monetary Penalties (AMPs) and name employers that don’t comply with employment rules.

The penalties can range from $1,000 to $12,000 depending on the number of employees and a federally regulated fleet’s gross annual revenue.

Ontario’s Workplace Safety and Insurance Board (WSIB) has been behind one of the biggest crackdowns on the misclassifications so far, applying close to $1 million in premium adjustments.

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  • Let have a standard for O TR drivers with 2 years experience of $28 cd per hr plus overtime pay after 9 hours driving or 10 hours on duty per day plus medical if go into the U S on payroll with a 5% match for RRSP . The drivers would make enough to not want to work for lease op deals that bring in $1,500 to $2,000/ wk take home no deduction and proper care if hurt or sick. This would help empty out homeless shelters like huron easy share.

      • A driver I met at queens Park 2 years ago used share 2 trucks with 2 other lease ops was making about $30hr to a corp account the cross border truck drivers with same company on payroll were making about $23.10 cd/ hr plus medical and stat holiday pay
        He married a health worker from Woodhaven mi. Got a job with a large retailer at $29. Us / hr plus medical coverage for him and is family worth about $170 / wk plus get extra for Sunday work and overtime after 44 hrs. Both companies from new mexico and Texas are recruiting the better truck drivers from the protest who had their bank accounts frozen or drivers permits taken away
        These companies are offering about a $2100 us / wk on payroll plus medical based on 60 hr week off the elog
        This about $2650 cd / wk plus medical. No one in ont that want to import drivers or do away with lease ops that know is paying that kind of money

    • $28 per hour with overtime, RRSP top up plus the employer paid additives will make a legit employee more expensive and further encourage Driver Inc

      • No drivers would leave driver Inc driver services that a lot trucking companies and certain retailers distributors use

      • I understand that the OM B is telling transport companies that haul their products are to pay at those rates in ont by payroll as of May 1 of this year

  • (FWIW … I am not advocating Driver, Inc.)
    Why wouldn’t Driver, Inc. increase in numbers?
    Who’s going to catch them? It’s not like WSIB, ESDC, or CRA are running around searching these people out. If they run across them in the normal course of their daily operations and get someone, so be it.
    There are only so many auditors in each of these departments, and they can only do so many audits in a year. Right from the start the chances of getting caught are pretty slim. Statistically speaking the more companies that take on the Driver, Inc. program, the less chance there is for any one company to get caught at it.
    Even if they get caught, what’s the worst that can happen? You get a fine. Maybe a big fine. If you are small you simply close the business and start another. If you are big, it’s simply a cost of doing business. The ROI versus the fines are worth it.
    What should really be of concern is that the rest of trucking, including big carriers, doesn’t adhere to the mantra of “If you can’t beat them, join them”.
    If that happens then the odds of small and medium size carriers getting audited for Driver, Inc. are reduced to nearly zero. Auditors will focus on bigger carriers as they are easier to identify, and bigger carriers will keep them in court forever, even further reducing auditor effectiveness.
    Maybe, if the government is really serious about Driver, Inc., they should put some real “jail-time” teeth into the legislation.
    Maybe the government should target shippers, receivers, and load brokers that use Driver, Inc. carriers and charge them with conspiracy to commit tax fraud, or aiding and abetting tax fraud.
    Maybe they should mandate that insurance companies cannot insure Drivers, Inc. carriers.
    But, let’s be real about the whole thing. The Fed needs tax dollars bad. It is far easier for them to ramp up audits on the middle class workers and get their revenue from there as those audits and re-audits are all electronic, and those people are only represented by themselves or income tax mills. Easy pickings for auditors.
    The ROI on eliminating Driver, Inc. is negligible. It costs too much to dig them out. It takes a lot of time to get the money, if at all. It’s not Green, nor does it lessen our dependence on fossil fuel. It is not going to put billions of tax dollars back into the government coffers.
    Just like the government trying to take on taxing the ultra-rich and their offshore accounts, rooting out and eliminating Driver, Inc. is never going to happen with any measurable success.
    So, why wouldn’t Driver, Inc. increase in numbers?

  • Hello everyone, this is an Issue that is affecting all of us Employers who employ drivers only on Employee / Payroll Basis. For me personally who has 5 full time and 8 part time drivers, running 7 nights a week for FedEx Ground , a small fleet of 6 Highway sleeper trucks, doing only Regional overnight hauling , it is a pain to loose on so many potential great drivers, just because they can actually go to a different company and be Subcontracted out to them. It is not fair to the rest of us, and I thought that they are actually cracking down on this issue, but apparently it still going on. There should be, in my opinion, Federal and Provincial regulations to once and for all take care of this problem. My guys earn $ 93 K up To $ 101 K depending on what they do, mostly five nights a week. I really hope this problem gets fixed sooner than when the self driving trucks will be around.