Global Courant 2023-05-17 03:59:00
Several groups representing Canadian truck drivers are calling on the Canada Revenue Agency (CRA) to help end what they call a “tax scam” affecting their industry that has been going on for years, but has reached the level of “crisis”.
The groups said at a press conference Tuesday that they want to see an end to the “Driver Inc.” model, which they call a “tax evasion and scam of employee misclassification” and “abuse of employment financed by a tax scheme”.
According to the Canadian Trucking Alliance (CTA), the “Driver Inc.” model is when a haulage company tells its drivers to register as a business “to sell their driving services to the haulier.”
“What sets these individuals apart from ‘owner-operators’ is that they do not own, lease or operate a vehicle. Instead, they drive the carrier’s vehicles and are virtually indistinguishable from an ’employee’,” the CTA says.
The organization says the practice allows carriers and drivers to evade certain tax obligations. But because these drivers are not recognized as employees, it has the knock-on effect on the industry of making it more difficult for drivers to access employment insurance, overtime and vacation pay, severance pay, sick days, and medical and dental benefits.
The group that raised its concerns — made up of Teamsters Canada, the Canadian Trucking Alliance (CTA) and the Association du Camionnage du Québec (ACQ) — also estimates that the practice will allow carriers and truck drivers to save $1 billion a year in taxes. to avoid.
“In its simplest form, Driver Inc. is a practice where drivers of company-owned equipment are misclassified as independent contractors in order to sell their driving services back to that carrier,” explains John McCann, the national freight and tank transportation director Teamsters Canada out. . “By doing so, those carriers are able to reduce their operating costs and dramatically undercut industry rates by avoiding the payment of mandatory deductions for employee-related services.”
McCann said another key point is that the practice gives some carriers an unfair advantage over others, calling it “abuse of vulnerable workers.”
They are calling on the CRA to monitor carriers and take enforcement action against those using the Driver Inc. practice.
CTVNews.ca has asked the CRA if it plans to make changes to reduce the practice, but has not yet received a response.
Mariam Abou-Dib, Teamsters Canada’s executive director, said while the federal Departments of Labor and Transport are both receptive to concerns from the trucking industry about Driver Inc., CRA is a “missing partner” in making more substantial changes .
Stephen Laskowski, president of the CTA, said there are many drivers who voluntarily participate in the practice, while for others there is a lack of understanding from some drivers about the greater impact on the industry.
“Either way, enforcement has to happen,” he said. “This is a crisis situation.
