The federal Ministry of Labour announced Monday that it will be investing $26.3 million over five years to investigate trucking companies that illegally misclassify drivers as independent contractors in order to avoid costs they are supposed to cover.
The practice, called “Driver Inc.”, involves companies that hire truck drivers, then tell them to self-incorporate as independent contractors. As a result, the drivers are denied their rights and entitlements under the Canada Labour Code, including paid sick leave, health and safety standards, employer contributions to Employment Insurance and the Canada Pension Plan, and workplace injury compensation.
Wages are also an issue, as companies commonly hold-back pay to these “self-employed” drivers, even though they effectively work as employees.
Perpetrators can face fines of $250,000 for trying to skirt labour laws and the new investment will help identify companies taking advantage of drivers.
In 2018, the Canadian Trucking Alliance (CTA) published a piece saying that the practice of having drivers self-incorporate was “unfortunately becoming a preferred way to attract contract drivers to fleets.”
The $26.3 million investment is planned to expand the Labour Program’s capacity to enforce existing labour provisions in the Criminal Code.
The announcement in Etobicoke, near Pearson International Airport, followed a meeting between federal Minister of Labour Seamus O’Regan Jr., the CTA and the Canadian Trade Union Teamsters.
“They showed up for their workers, they brought this to our attention, they showed us how often it was happening and how much it was hurting working Canadians, and that’s what unions do– that’s what good businesses do,” O’Regan said in a press conference Monday.
The issue of predatory practices in the industry has been raised more frequently by truck drivers across Peel over the past five years, as many immigrants including international students have been exploited by companies.
“There are a number of truckers who make the decision to be independent, to be self-contractors, that’s fine to be independent, that’s fine,” the Minister said Monday. “What we’re talking about are a number of people, and it’s growing, who don’t know what they’re doing, who don’t know what they are and many of them live in fear.”
O’Regan told reporters that the investment will target “bad employers” not employees.
“We are going to find them out, we’re going to hold them accountable for their wrongdoing, and when necessary we’re going to issue fines to bad actors.”
In a recent statement, the CTA praised the Ministry’s announcement. Beyond audits, penalties, and forced backpay, CTA recommends that companies violating the rules receive a second audit within 12 months of their initial audit to ensure compliance.
“If, during the second audit, the company is again found to be in gross noncompliance, the result should be – in partnership with provincial ministries –termination of their trucking licence, a complete removal of plates from all trucks associated with the company, and the implementation of ‘ghosting protocols,’” the CTA wrote.
The CTA is also calling on Employment and Social Development Canada (ESDC) to form partnerships with all workers’ compensation boards (WCBs) and the Canada Revenue Agency (CRA), to trigger CRA and WCB audits of companies that violate the rules.
O’Regan said the Ministry is listening to both the CTA and Teamsters, and will ensure the penalties “have teeth” including punitive charges in cases where predatory practices are found.
Brampton truck driver Karanveer Sandhu previously told The Pointer about his experiences including a truck he was told to drive despite obvious damages.
“I had to drive that broken truck to California, risking my life, and had I not done that they would have not paid my wages,” Sandhu says. “I did a lot of hard work, I was earning almost $10,000 per month.”
But Sandhu’s employers didn’t pay him his full wages, which led him to walk out on them, he said.
Sandhu said whenever he tried to get the wages he was owed there was always an excuse used by one of the owners.
Sandhu was not paid $23,876 in wages earned, he said.
“You know our community bosses in the trucking industry, they abuse a lot,” Sandhu said, referring to the Punjabi-Canadian community members who own many of the companies that are exploiting young drivers including international students.
Sandhu joined a protest in December organized by Naujawan Support Network (NSN), which has taken a leading role in advocating for the rights of young truckers. He has filed a complaint under Canada’s Labour Code against the company that owes him wages.
Gurmukhjeet Singh, a 29-year-old trucker, was another victim of wage theft.
He started work with a Mississauga-based company in 2017, and had no issues with his wages until the pandemic struck in 2020.
“I haven’t been paid in full for May, June 2020 and I’m owed about $4,200,” Singh said previously.
Minister O’Regan said he has been listening to drivers.
“I can tell you the mood of the room is more throw the book, but we just have to make sure we do it properly as well. What we hear is this is an urgent situation,” he said.
With respect to immigration, and the role it plays within Canada’s trucking industry, the CTA is “strongly recommending that a known Employer Program be introduced to ensure new Canadians who choose to enter the trucking industry are aware of their rights and responsibilities.”
“On behalf of the CTA, its members, truck drivers and their families, we very much appreciated seeing the Government of Canada make stamping out Driver Inc. a top priority in the fall Economic Statement and we are encouraged that Minister O’Regan is leading the charge. We thank him for his leadership and commitment on this issue,” CTA president Stephen Laskowski said.
“Driver Inc is an unlawful practice that involves gross labour misclassification, abuse of workers, forced labour and significant corporate tax evasion. We welcome the chance to work with the Government of Canada to stamp out this practice as quickly as possible.”
Drivers Inc isn’t the only issue facing drivers in Peel and elsewhere in the province.
Ontario has been dealing with a lack of regulation among truck driving schools, leading to what Kim Richardson, former president of the Truck Training Schools Association of Ontario (TTSAO), called “corruption” in a 2021 interview on the topic. He spoke of hearing “horror stories” in Brampton where an individual gets their licence at a training school one week and two weeks later he’s an instructor.
In December 2021, Ontario’s Auditor General released a report highlighting the lax oversight by the provincial Ministry of Colleges and Universities, responsible for holding training schools accountable.
When asked on Monday what the federal Ministry of Labour was doing to ensure predatory truck driving schools that do not provide proper training are held accountable, O’Regan said there will be “significant resources” to combat the problem through the ESDC.
“We’re going to be coming forward with good resources to make sure that that training is applicable and it’s thorough.”
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Jessica Durling, Local Journalism Initiative Reporter, The Pointer