Driver misclassification a ‘disaster’ for trucking companies, TFI head says
The head of Canada’s largest trucking firm says rampant undercutting of labour laws is harming companies like his as well as drivers, a problem felt all the more acutely in lean economic times.
Alain Bédard, chairman and CEO of TFI International, called the phenomenon known as Driver Inc. a “disaster” for legitimate truck outfits as rule-breaking rivals gain a competitive advantage.
“We are losing volume because the market is soft and we have unfair competition with the Driver Inc. situation,” he told analysts on a conference call Friday.
“This is a disaster that we have in Canada and nobody’s doing anything about it.”
Driver Inc. refers to the misclassification of workers as self-employed, which means the company does not provide benefits or basic labour protections.
The mislabelling of contractors who drive for only one company and exert no control over their schedules is illegal — and risky, since workers do not receive basic entitlements such as workers’ compensation, overtime, paid sick leave or severance.
While Ottawa has taken some steps toward tamping down the problem, truckers and owners alike want further action. They say the crisis continues to grow amid lagging enforcement, driving down profits and worker wellbeing in an industry already known for razor-thin margins and gruelling schedules.
“They’re not paying any benefits to their drivers,” Bédard said. Driver Inc.’s competitive edge may dull when demand ramps up again after a hard year. “But it will be a long-term problem for us as long as nobody in Ottawa or in Quebec or Toronto does anything about it,” he said.
Last year, the federal labour minister’s office said the government was focused on an “education-first approach to stop this discriminatory practice.”
“Employers who continue to knowingly break the law following education and awareness will be held accountable,” said Hartley Witten, press secretary to Labour Minister Seamus O’Regan, in an email last May.
Between January 2019 and March 2020, Ontario’s Workplace Safety and Insurance Board audited 204 trucking firms and found that 47 per cent of them under-reported driver earnings — something that can be a key indicator of misclassification.
Stephen Laskowski, president of the Canadian Trucking Alliance, applauded Employment and Social Development Canada for ramping up enforcement against violators in southern Ontario over the past couple of years.
“It’s a race to the bottom, and it’s also very much used to abuse people who are new to Canada,” he said of Driver Inc.
Laskowski has also called for harsher fines and even tougher crackdowns as a deterrent to misclassification.
Last year’s federal budget laid out funding to amend the Canada Labour Code to bolster job protections for federally regulated gig workers by strengthening bans on employee misclassification, said Canada Revenue Agency spokeswoman Hannah Wardell.
Last fall, the CRA launched the second phase of an educational campaign aimed at “personal services businesses,” a special tax classification for contractors who “would be considered to be an employee of the payer” if they were not incorporated as independent entities.
“The information gathered by both of these pilot phases will help guide the CRA’s future education and compliance activities,” Wardell said in an email last year.
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