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OTTAWA — Finance minister François-Philippe Champagne will use Tuesday’s federal budget to close a tax loophole critics say is exploiting workers and creating unfair labour practices in the trucking industry.
In a statement issued on Thursday, Champagne’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 has dubbed “Driver Inc.”
The term refers to a business model in which transport companies misclassify drivers as independent contractors rather than employees to save money on payroll taxes.
“Some companies erroneously and deliberately misclassify their truck drivers as independent contractors, instead of on-staff employees,” the finance department statement said. “These practices undercut competition in the sector and unevenly punish rule-abiding companies and deprive workers of the benefits and pensions they are owed.”
Trucking alliance CEO Stephen Laskowski told the House of Commons transport committee earlier in October that the “bad actors” running the model are taking over the industry. He 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. But he said companies can use their status as contractors to deny them benefits.
As contractors they are also exposed to tax, labour code and workers’ compensation liabilities.
The budget money will allow the CRA to end a moratorium on penalties for failing to report fees for service on tax forms that was created as a temporary measure in 2011 but never lifted.
It will also be used to create a new program to target non-compliance issues from personal service businesses and the reporting of fees for service.
The budget would also propose amending the Income Tax Act and Excise Tax Act to allow the Canadian Revenue Agency to share confidential information about classification of workers with Employment and Social Development Canada, to try and rout out the issue of drivers being wrongly classified as contractors instead of employees.
Tax reform to combat “Driver Inc.” is one of the Bloc Québécois’ 18 recommendations for the upcoming budget, though it was not among the six things the Bloc said were non-negotiable if the government wants to secure Bloc support for the budget.
Bloc MP and transport critic Xavier Barsalou-Duval said in a statement earlier this month that the loophole can be a matter of life or death.
“The safety of our roads cannot be sacrificed on the backs of workers exploited by unscrupulous individuals who flout the law,” said Barsalou-Duval in French.
The Bloc presented 10 recommendations to the federal government about “Driver’s Inc.” in early October, including asking for an official inquiry into driver exploitation, a public registry of non-compliant companies and a ban on temporary foreign workers operating as incorporated drivers.
Barsalou-Duval blamed the Liberal party for a lack of urgency, saying their “laissez-faire attitude can’t continue.”
Jobs Minister Patty Hajdu told the House of Commons transport committee on Thursday the misclassification issue is exploitation, stripping workers of their rights and harming the companies that follow the rules.
“The reality is that when people are being misused or abused in this way, often they’re unaware of their rights and the fact this is happening to them,” said Hajdu.
This report by The Canadian Press was first published Oct. 31, 2025.
Justin Escoto, The Canadian Press
