[Canada] ‘Exploitative’ trucker loophole will be addressed in federal budget

In Canada, Finance Minister François-Philippe Champagne is set to use the forthcoming federal budget to close a tax loophole which critics believe exploits workers and creates unfair labour practices in the trucking industry, The Canadian Press reports.

In a statement, the minister’s office said the federal budget will allocate $77 million over the next four years to the Canada Revenue Agency to address a problem the Canadian Trucking Alliance calls “Driver Inc.”

Driver Inc. reportedly refers to a business model in which transport companies misclassify drivers as independent contractors instead of employees to save on payroll taxes.

“Some companies erroneously and deliberately misclassify their truck drivers as independent contractors, instead of on-staff employees,” the statement read. “These practices undercut competition in the sector and unevenly punish rule-abiding companies and deprive workers of the benefits and pensions they are owed.”

Speaking to the House of Commons transport committee last month, trucking alliance CEO Stephen Laskowski said that the “bad actors” running the model are taking over the industry. 

Mr Laskowski said the drivers are “virtually indistinguishable” from traditional employees because they don’t own or lease their vehicles and have little to no financial stake in the business. However, he stated that companies can use their status as contractors to deny them benefits.

As contractors, drivers are also exposed to tax, labour code and workers’ compensation liabilities.

Additionally, the budget would reportedly propose amending the Income Tax Act and Excise Tax Act to allow the Canadian Revenue Agency to share confidential information about the classification of workers with Employment and Social Development Canada. 

The move is a further step towards ending the issue of drivers being wrongly classified as contractors rather than employees.

Source: The Canadian Press

(Quotes via original reporting)

In Canada, Finance Minister François-Philippe Champagne is set to use the forthcoming federal budget to close a tax loophole which critics believe exploits workers and creates unfair labour practices in the trucking industry, The Canadian Press reports.

In a statement, the minister’s office said the federal budget will allocate $77 million over the next four years to the Canada Revenue Agency to address a problem the Canadian Trucking Alliance calls “Driver Inc.”

Driver Inc. reportedly refers to a business model in which transport companies misclassify drivers as independent contractors instead of employees to save on payroll taxes.

“Some companies erroneously and deliberately misclassify their truck drivers as independent contractors, instead of on-staff employees,” the statement read. “These practices undercut competition in the sector and unevenly punish rule-abiding companies and deprive workers of the benefits and pensions they are owed.”

Speaking to the House of Commons transport committee last month, trucking alliance CEO Stephen Laskowski said that the “bad actors” running the model are taking over the industry. 

Mr Laskowski said the drivers are “virtually indistinguishable” from traditional employees because they don’t own or lease their vehicles and have little to no financial stake in the business. However, he stated that companies can use their status as contractors to deny them benefits.

As contractors, drivers are also exposed to tax, labour code and workers’ compensation liabilities.

Additionally, the budget would reportedly propose amending the Income Tax Act and Excise Tax Act to allow the Canadian Revenue Agency to share confidential information about the classification of workers with Employment and Social Development Canada. 

The move is a further step towards ending the issue of drivers being wrongly classified as contractors rather than employees.

Source: The Canadian Press

(Quotes via original reporting)