Recent Employment and Social Development Canada (ESDC) blitzes continue to expose the harsh reality that many segments of the trucking industry are out of control when it comes to labor and tax compliance and obeying other rules, the Canadian Trucking Alliance (CTA) said in a news release.
“This comes as no surprise to those of us who have fought tooth and nail to run compliant operations and survive for the past decade; nor to the many political officials in all levels of government throughout the country who are very aware of the rampant abuse and manipulation of the labor system in our industry,” CTA president and CEO Stephen Laskowski said in the release. “Now, the government’s own enforcement data confirms it even further.”
“The number one job now facing Minister Hajdu in her role as Minister at ESDC is to bring law and order back to the trucking industry. This cannot be ignored any longer,” he added
Details of the recent federal and provincial enforcement initiatives held across Canada are beginning to come in, and the numbers are grim. The compliance data stems from joint provincial and federal initiatives at roadside in Nova Scotia, Quebec, Ontario, and British Columbia, as well as on-site facility inspections.
“ESDC’s focused and proactive approach with these blitzes on labor misclassification is appreciated and long overdue,” Laskowski said. “ESDC is now able to confirm first-hand what CTA has been telling governments for a decade – that our house is on fire and a massive effort is necessary to put it out.
Illegal behaviors
“Worse, these roadside and on-site initiatives are confirming that non-compliant operators continue to show no will or desire to address and correct their illegal behaviors, but would rather flagrantly thumb their nose up to the law. We are encouraged this ‘catch-me-if-you-can’ businesses model in the underground economy has been exposed. They are getting caught and are hopefully no longer untouchable.”
Laskowski added that Hajdu’s priority should be to increase oversight in Canada’s largest federally regulated private sector and provide her policy and misclassification enforcement teams with the added resources and political support they need to do their jobs.
Highlights from focused ESDC enforcement efforts include:
- Southern Ontario enforcement pilot numbers found over 60% of employers engaged to be in contravention of labor laws.
- Follow up operations in Ontario showed a 65% non-compliance rate, with 25% of cases declared non-viable as the employer ‘disappeared’. In other words, when caught breaking the law, one on four companies simply disappear from records in one jurisdiction and very likely move to another, CTA explains.
- Blitz and inspections in Quebec revealed 40% of employers visited were found in non-compliance with misclassification provisions.
- ESDC and WSIB Ontario roadside blitz numbers show that over 50 companies were identified for potential audit related to labor law violations. Over 30 companies identified for potential violation of provincial workers compensation laws.
- Winnipeg blitz revealed 64% of active employers visited that week were found in non-compliance with misclassification provisions (some were no longer in business). Compliance efforts remain underway.
- Edmonton blitz showed 50% of employers visited that week were found in non-compliance with misclassification provisions. Compliance efforts remain underway.
- CRA personal services business pilot, in just a small sample, showed millions of dollars in tax evasion were identified and trucking found to be the number one abuser of the PSB model in the economy.
- WSIB Ontario has been conducting targeted audits for several years. Hundreds of trucking companies have already received corrective adjustments from the WSIB, totalling over $10 million, with some individual companies receiving levies of upwards of $800,000.
ESDC roadside enforcement blitzes were also held in Nova Scotia May 13-15, but results are still being compiled.
“When is enough going to be enough? When is government going to admit we have a major problem and dedicate the resources we need to bring things under control?” Laskowski asked. “It’s obvious the status quo is broken.”
Pocketing millions of dollars
He added that it’s not enough for non-compliant fleets to pay fines, but their privilege of operating a trucking company in Canada should be revoked permanently if they can’t follow the basic federal and provincial laws.
“Rather than face real consequences, companies are pocketing millions of dollars by not complying; are gaining market share, and putting everyone on the roads at risk, including their own drivers,” Laskowski said. “And if they are caught, they just disappear and reincarnate themselves geographically and do it all over again. This is insane and must end immediately.”
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