[Canada] Trucking industry's campaign against costly payroll fraud schemes

The Canadian Trucking Alliance has launched a national campaign to combat what it alleges are widespread payroll fraud and safety violations in the nation’s trucking sector, HR Law Canada reports.

The organisation warned that the schemes cost governments over $5 billion annually in lost revenue.

The Stop Illegal Trucking campaign reportedly targets a practice known as Driver Inc., in which trucking companies misclassify employee drivers as independent contractors to avoid payroll taxes, employment insurance, Canada Pension Plan contributions and workers’ compensation premiums.

“This isn’t just an industry fight – it’s a public safety and fiscal crisis,” Greg Arndt - chair of the Canadian Trucking Alliance - said. “When companies hide behind the Driver Inc. model, lives and livelihoods are put at risk and vital public services lose billions.”

According to the alliance, misclassified drivers lack workers’ compensation coverage and statutory benefits typically provided to employees. Companies using the Driver Inc. model operate with payroll costs up to 35 per cent lower than compliant businesses, it said.

Marco Beghetto - vice-president of communications at the alliance - said companies avoiding tax and labour compliance also compromise safety standards. “We know that companies that routinely cut corners when it comes to tax and labour compliance will most definitely do the same in all areas of their operation, including disregarding public safety by carelessly putting unfit equipment and untrained or poorly qualified drivers on the road,” he said.

The alliance reportedly said that the Canada Revenue Agency’s moratorium on T4A enforcement has allowed the practices to spread unchecked. It contends that existing laws could address the problem without new regulations, if properly enforced.

The campaign evolved from an earlier effort called Stop Tax and Labour Abuse. The alliance stated that Driver Inc. schemes have expanded to involve immigration fraud, training and licensing fraud and, in some cases, human trafficking and cross-border smuggling.

The trucking alliance is calling on the federal government to enforce existing tax and labour laws. Further information about the initiative is available on the campaign website.

Source: HR Law Canada

(Quotes via original reporting)

The Canadian Trucking Alliance has launched a national campaign to combat what it alleges are widespread payroll fraud and safety violations in the nation’s trucking sector, HR Law Canada reports.

The organisation warned that the schemes cost governments over $5 billion annually in lost revenue.

The Stop Illegal Trucking campaign reportedly targets a practice known as Driver Inc., in which trucking companies misclassify employee drivers as independent contractors to avoid payroll taxes, employment insurance, Canada Pension Plan contributions and workers’ compensation premiums.

“This isn’t just an industry fight – it’s a public safety and fiscal crisis,” Greg Arndt - chair of the Canadian Trucking Alliance - said. “When companies hide behind the Driver Inc. model, lives and livelihoods are put at risk and vital public services lose billions.”

According to the alliance, misclassified drivers lack workers’ compensation coverage and statutory benefits typically provided to employees. Companies using the Driver Inc. model operate with payroll costs up to 35 per cent lower than compliant businesses, it said.

Marco Beghetto - vice-president of communications at the alliance - said companies avoiding tax and labour compliance also compromise safety standards. “We know that companies that routinely cut corners when it comes to tax and labour compliance will most definitely do the same in all areas of their operation, including disregarding public safety by carelessly putting unfit equipment and untrained or poorly qualified drivers on the road,” he said.

The alliance reportedly said that the Canada Revenue Agency’s moratorium on T4A enforcement has allowed the practices to spread unchecked. It contends that existing laws could address the problem without new regulations, if properly enforced.

The campaign evolved from an earlier effort called Stop Tax and Labour Abuse. The alliance stated that Driver Inc. schemes have expanded to involve immigration fraud, training and licensing fraud and, in some cases, human trafficking and cross-border smuggling.

The trucking alliance is calling on the federal government to enforce existing tax and labour laws. Further information about the initiative is available on the campaign website.

Source: HR Law Canada

(Quotes via original reporting)