The Canadian Trucking Alliance (CTA) is commending the feds for coming through with promises to crack down on the misclassification of truck drivers in Prime Minister Mark Carney’s first federal budget.
The budget, as earlier promised, follows through on a commitment to dedicate $77 million over four years to address the issue the CTA refers to as Driver Inc., which misclassifies company drivers as independent contractors allowing employers and drivers to sidestep certain tax obligations.
“This misclassification of employees has been particularly common in the trucking industry,” the budget reads.
“To crack down on employers that misclassify employees, Budget 2025 proposes to provide $77 million over four years starting in 2026-27, with ongoing funding of $19.2 million annually, for the Canada Revenue Agency (CRA) to implement a program that addresses non-compliance related to personal services businesses, as well as lift the moratorium on reporting fees for services in the trucking industry. Budget 2025 also proposes to amend the Income Tax Act and the Excise Tax Act to allow the CRA to share information with the Department of Employment and Social Development Canada for the purpose of addressing worker misclassification. These measures will strengthen compliance in the trucking industry by ensuring that employers comply with reporting requirements and tax obligations, while also protecting workers’ rights.”
The budget also promises to “substantially increase the penalties imposed on federally regulated employers who commit wage theft.”
A new data-sharing agreement between Employment and Social Development Canada (ESDC) and Canada Revenue Agency (CRA) will enhance the feds’ ability to monitor the classification of drivers, CTA says.
A moratorium on penalties related to the non-issuance of T4As for independent contractors will also shine more light on the issue of driver misclassification.
“Budget 2025 is an important day for the industry as it firmly establishes that all companies will have to again compete under the same tax and labour code rules,” said CTA president and CEO Stephen Laskowski in a post-budget release. “We will now continue our work with ESDC and CRA to ensure this new foundation is followed by everyone.”
The CTA says it and its provincial association members will be producing information packages to further explain the implications of the budget.
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