By Paul Adair, Staff Writer

Editor’s note: This blog is a reprint from the Spring 2026 issue of Women Driving Change. Past issues are a treasure trove of information! You can read them all for free at https://womendrivingchangemagazine.ca/past-issues/.

The Canadian Trucking Alliance (CTA) calls it the biggest threat to Canada’s trucking industry. Driver Inc. is a controversial employment model where drivers are misclassified as independent contractors rather than employees. In reality, however, these drivers are indistinguishable from regular employees, lacking truck ownership, choice of route, and contract independence.

At its core, Driver Inc. is fraud against Canada – a tax evasion scheme that undermines worker rights, costs the Canadian economy billions, and damages the integrity of the trucking industry.

“When businesses choose to run a Driver Inc. model, they are competing against us on an unlevel playing field,” says Dave Cox, CEO at Polaris Transport. “Everyone can agree that competition is good, but it has to be fair. Companies like Polaris Transport – as well as many other reputable companies out there – we’re doing what we are obligated to do, and it’s like we’re being punished for it because not every carrier operates in a way that’s right or legal.”

The practice of misclassifying drivers began approximately a decade ago as trucking companies looked to reduce costs by avoiding payroll taxes, benefits, and insurance premiums. However, the practice really took off in 2011, after the Canada Revenue Agency (CRA) ‘temporarily’ paused penalties for failing to issue T4A slips.

While this was a move by CRA that was originally meant to allow companies – especially in trucking – to become more familiar with the new rules and adopt compliance practices before penalties were enforced, like it’s been said before, ‘The road to Hell is paved with good intentions.’

“The T4A moratorium is really what allowed this scheme to grow like a bad weed,” says Johanne Couture, Executive Officer at the Women’s Trucking Federation of Canada (WTFC). “There is so much money in this scam now. I have heard of people from other organizations getting their vehicles vandalized when they step up to try and stop it – I have even heard of death threats. Driver Inc. is like organized crime and, because there aren’t enough resources for enforcement, it’s been allowed to flourish.”  

Given the underground nature of the practice, it is challenging to find an exact number of businesses operating under the Driver Inc. model. However, CTA estimates that up to one-third of trucking companies in some regions of Canada are involved in the scam today.

“We tasked a consultant with looking at the growth of trucking companies with no employees, i.e.: Driver Inc.,” says CTA President and CEO, Stephen Laskowski. “The results back from the consultant came with an emphatic, ‘What the heck is going on in trucking? You guys are – by far – the largest growth area of companies with zero employees.’ You may wonder how all these companies with all these trucks have no employees. The answer is that they can’t. It’s fraud and it’s a scam.”

The unintended consequences

The T4A moratorium ultimately meant that carriers paying incorporated drivers through Driver Inc. could avoid reporting payments, which made it easier to misclassify employees as contractors without facing any consequence. It’s no surprise then that this lack of consequence led to a significant proliferation of the fraudulent practice, as unscrupulous carriers were able to undercut the more honest and compliant fleets.

“These carriers using Driver Inc. drivers are undercutting those of us who do follow the rules,” says Shelley Walker, Founder and CEO of WTFC. “Where we might charge $1.75 a mile, these Driver Inc. carriers will come in at $1 a mile, or even less. It’s difficult to see how they’re still operating at those levels but they’re managing it, although we are starting to see more and more bankruptcies in our industry, many of which are Driver Inc. companies.”

Laskowski agrees, adding that, “There are huge cost advantages for anyone operating under Driver Inc.; upwards of 20%, and a 20% cost advantage in trucking is absolutely massive.  Driver Inc. is also challenging responsible companies in their efforts to retain staff because their drivers are hearing about the growth of the underground economy and the illicit wealth that’s out there. This is the death knell to legitimate owners / operators in Canada, not to mention the criminality of forced labour, which is definitely a component of Driver Inc.”

While not formally classified as labour trafficking, Driver Inc. is a form of forced labour that exploits its drivers through the use of force, fraud, or coercion. Many times, newcomers are the targets of Driver Inc. carriers and are pushed into the scam without fully understanding the risks.

“These newcomers have no control of what they’re doing other than being forced to work,” says Walker. “In many cases, these drivers are put into what we refer to as the ‘never, never’ program, which is a lease program through the company. They end up owing the company and the expenses go up dramatically month over month, so they are never going to end up owning their truck. They are being exploited on so many different levels, it’s criminal.”

According to Truck Training Schools Association of Ontario (TTSAO) Chair, Ken Adams, the driver misclassification under Driver Inc. did not start on a highway, it began in a classroom.

He says, “Those arriving in Canada for a better life are charged by immigration lawyers to get into the country and then they are set up with a sub-par driving school affiliated with the same person. Once they graduate, the school sends them to a sub-par carrier – also affiliated with the school – to classify them under the Driver Inc. model. We’ve even seen it where carriers will influence – or even buy – schools to undermine the provincial licensing standards. Essentially, Driver Inc. is really an entire network of shady business practices where everyone is in cahoots with each other.”

It is important to note that nobody in this industry wants the Driver Inc. issue to be a referendum on immigration, and Canada’s trucking companies and carriers belong to a very welcoming industry. Rather, this issue should be about the fraudulent carriers that prey on newcomers, involve them in fly-by-night fraudulent training schools, and then take advantage of them once they are on the roads working under the Driver Inc. model.

“Essentially, Driver Inc. is really an entire network of shady business practices where everyone is in cahoots with each other.” – Ken Adams, TTSAO

Change is in the air

The federal government made $77 million in commitments as part of Budget 2025 to strengthen compliance and crack down on the underground economy in trucking. It would appear that the federal government is now making good on that commitment by directing Canada Revenue Agency (CRA) to improve compliance and restore fairness in the trucking industry.

On December 4, 2025, CRA lifted the T4A moratorium and businesses in the trucking sector will now be assessed penalties if they fail to report payments for services exceeding $500 in a calendar year that are made to a Canadian-controlled private corporation in the trucking industry. A business is operating in the trucking industry if more than 50% of its primary source of income is from trucking activities.

The federal government believes that these updated reporting requirements will help improve transparency, strengthen compliance, and ensure both payers and workers are meeting their tax obligations, while also supporting fair working conditions and safer roads for all Canadians.

“Canada’s supply chains rely on a strong, competitive, and fair trucking industry,” said the Honourable Steven MacKinnon, Minister of Transport and Leader of the Government in the House of Commons, at the December rule-change announcement. “This is an important step toward ensuring a level playing field for the thousands of operators who keep our economy moving. By supporting greater transparency and compliance, we are helping to build a trucking sector that continues to be safe, more resilient, and better positioned to serve Canadians and our trading partners.”

Canadian trucking organizations are applauding the Government of Canada’s newly announced enforcement blitz targeting worker misclassification in the federally regulated trucking sector, seeing this action as an important step toward ensuring fairness, safety, and long-term stability across Canada’s transportation industry.

“We’ve lived and breathed this issue for a decade, and we’ll continue to bird dog it for as long as it takes,” says Laskowski. “Driver Inc. is the number one issue here in Canada, and we are committed as a team, as a board, and as partners to see this through. We will remove this kind of lawlessness from our industry and bring the level playing field back to trucking.”

Adams agrees, but warns, “There is a lot of money in Driver Inc., and these guys will not go down without a fight. They are crafty and will do what they can to find a way to work around the rules to stay up and running. This is an issue that we will have keep a close eye on and, as soon as things start to go off the rail, we will all have to work together to get it back on track.”

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