Source: Employment and Social Development Canada
November 7, 2022
The 2022 Fall Economic Statement that was released earlier this month by Chrystia Freeland, Deputy Prime Minister and Minister of Finance earmarked C$26.3 million (approx. $19.6 million) over five years, starting in 2023-24, to take stronger action against non-compliant companies in the trucking industry that misclassify employee drivers as independent contractors, through orders and fines to enforce the Canada Labour Code.
In announcing this initiative, the Department of Finance provided the following background information:
“In the trucking industry, there is a long history of companies using the misleading “Driver Inc.” practice, whereby drivers are encouraged—against their will—to self-incorporate and claim to operate as independent contractors without information on the detriments of doing so. By misclassifying employees as independent contractors, companies are denying them important rights and entitlements under the Canada Labour Code, such as paid sick leave, health and safety standards, employer contributions to Employment Insurance and the Canada Pension Plan, and workplace injury compensation.
In January 2021, amendments to Part III of the Code came into force, making such intentional misclassification of employees illegal. In a recent pilot enforcement project to educate federally-regulated transportation employers about the new rules, more than 60 per cent were found to be in contravention of the misclassification rules. Further action responds to calls by the Canadian Trucking Alliance and Teamsters Canada, representing both employers and workers, to address this coercive practice.”
Minister of Labour Seamus O’Regan, Jr. and other Members of Parliament met with the Canadian Trucking Alliance and Teamsters in Toronto to discuss these targeted investments to address misclassification and protect the rights of road transportation workers. The minister said he wanted to make sure the fines “have bite and they hurt,” but he went on to say that the measures will be aimed at employers, not at individual truck drivers who make the decision to be independent contractors.