Budget Will Crack Down on Trucking Industry Scheme That Aims to Undercut Competition: Finance Minister

Trucks are seen as they drive along the Coquihalla Highway in B.C. in a file photo. The Canadian Press/Jonathan Hayward

Finance Minister François-Philippe Champagne says the upcoming Nov. 4 budget will crack down on the “Driver Inc.” trucking industry scheme, which aims to undercut competition by avoiding tax obligations.

“Budget 2025 is cracking down on Driver Inc., closing loopholes, making our roads safer, and standing up for drivers and businesses that play by the rules,” Champagne said in an Oct. 30 statement.

Driver Inc. refers to a practice wherein operators hire workers as independent contractors instead of employees, allowing them to avoid payroll taxes, benefits, overtime, and workplace protections. Industry experts have warned that the rapid spread of such business practices let operators drive down wages and safety standards, threatening the trucking industry’s wages and road safety.

The upcoming federal budget is set to include $77 million in funding over four years, starting in 2026-27, for the Canada Revenue Agency (CRA) to lift the moratorium on penalties for companies in the trucking industry who fail to report fees for service transactions, the finance department said in an Oct. 30 news release.

The department says the measure is part of a series of targeted measures to combat misclassification of drivers in the trucking industry. The new measures would aim to ensure drivers and trucking companies comply with tax and labour code regulations, and allow the government to investigate and enforce the law when misclassification is suspected.

“Too many trucking companies and the drivers they hire are in non-compliance with tax obligations,” the department said, noting the practice of deliberately misclassifying truck drivers undercuts competition, punishes rule-abiding companies, and deprives workers of the benefits and pensions they are owed.

The budget would also direct the CRA to implement a program to address non-compliance issues and propose legislative amendments to allow the agency to share confidential information, including audit results, with Employment and Social Development Canada (ESDC) to enforce the Canada Labour Code and better address the issue of driver misclassification.

Transport Committee

Transport Minister Steven MacKinnon and Jobs Minister Patty Hajdu appeared before the House of Commons transport committee on Oct. 30 to testify on issues in Canada’s trucking industry. The committee is conducting an ongoing study into trucking safety and regulations in Canada, and is currently looking into Driver Inc. practices.

Conservative MPs raised concerns about untrained truck drivers under the Driver Inc. scheme reportedly causing accidents on highways, with Conservative MP Dan Albas saying “Canadians are dying on the roads.”

MacKinnon said he thinks the upcoming budget measures will make a “vast improvement” to safety in the trucking industry.

He told MPs that “the heavy half” of trucking regulation falls within provincial jurisdiction, including the training of drivers, enforcement of road safety on highways, roadside inspections, and weigh station inspections. He noted the federal government has responsibility for highway safety through federal legislation and working with the provinces.

Conservative MP Philip Lawrence pressed the ministers to specify a date that the Driver Inc. issues would cease to exist in Canada, noting problems resulting from the misclassification of drivers have become worse over the last 10 years.

“We hope that it will cease to be an issue immediately, and that’s the work that we’re doing to invest in the tools that we need to catch these bad actors,” Hajdu responded. “Today’s announcement goes a long way to sending a message throughout the industry that we are taking even further measures by sharing information back and forth between the ESDC and CRA.”

Bloc Québécois MP Xavier Barsalou-Duval asked the ministers whether the government announced the new measures to crack down on the Driver Inc. scheme because it was pressured to do so. Hajdu noted the Liberal government had been working in fighting misclassification since 2023, adding that the government doesn’t want to “stigmatize honest drivers in this sector.”

The Bloc issued 18 demands for the upcoming budget in mid-October, one of which is to compel trucking companies to issue federal T4A tax slips to their drivers.

‘Exploitative Practices’

Earlier this month, the Bloc Québécois called on Ottawa to crack down on “exploitative practices” in Canada’s trucking industry. Barsalou-Duval called the Driver Inc. scheme “a downright cancer in the trucking industry,” noting fatalities involving commercial vehicles increased by 35 percent between 2023 and 2024 in Quebec.

“These discount drivers are often people who are shamelessly exploited by employers or contractors, and they ensure that regular, legitimate carriers are stuck with unfair competition,” Barsalou-Duval said at an Oct. 6 press conference.

He called for an immediate ban on temporary foreign workers being employed under the Driver Inc. model, a public registry of non-compliant companies, and an enhanced certification program to provide oversight on trucking companies, among other proposed measures.

Numerous trucking accidents have brought the issue to national prominence, including a Sept. 10 crash east of Montreal in which a trucker injured two people after reportedly having been on the road for 57 hours.

Paul Rowan Brian contributed to this report.