Dozens of Ontario-based fleets are learning that the deployment of the Driver Inc. scheme is starting to come with real consequences. As reported earlier in the year, several Ontario-based trucking companies have already received adjustments from the WSIB for over $200,000 for Driver Inc and related noncompliance. Since that time, dozens of other Ontario-based fleets have also received adjustments from the WSIB for Driver Inc. and similar offenses.
“The WSIB uses data-driven approaches to identify Driver Inc. companies and other non-compliance in our sector. We expect these efforts will keep WSIB enforcement personnel busy for some time to come,” said OTA’s director of Policy and Public Affairs, Jonathan Blackham. “Compliant carriers would like to thank the WSIB for being the only agency to date, provincially or federally, to put such a focused effort on ensuring compliance and protecting workers in our sector.”
Earlier in the year, the WSIB committed to the trucking industry it would switch from random audits to focused audits. To assist in the detection of noncompliance such as Driver Inc., the WSIB has a hotline available for drivers to report companies forcing them into the Driver Inc. scheme. Carriers can also use the hotline to report illegal activities, including Driver Inc. carriers.
The WSIB’s confidential tip line is: 1-888- 745- 3237
Before any enforcement action is conducted, the WSIB performs its own analysis to gauge the validity of the tip. This is an excellent way for misclassified workers and concerned carriers to bring noncompliance to the WSIB’s attention, says OTA.
“We believe the WSIB is doing everything in their power to address Driver Inc.,” said OTA Chair David Carruth. “Now that the election is over, we need CRA, ESDC and the federal government to do their part as well.”
The Driver Inc. model is the mechanism through which many unsafe and noncompliant fleets fuel their growth. However, Driver Inc. is not just a tax scam, it’s a truck safety, labour standards, and health and safety issue as well.
Prior to the election, the Minister of Labour, Patty Hajdu, committed to working with the industry on Driver Inc. While announcements by CRA regarding the mandatory use of T4A and the legal implications of Driver Inc. have been helpful in raising awareness, enforcement actions have not met the expectations of Canadian Trucking Alliance member carriers.
CTA conservatively estimates that Ottawa loses at least $1 billion in tax revenue to Driver Inc practices in the trucking industry.
Despite not taking swift action as of yet, CRA itself admits that non-compliance with the Tax Code is a major problem. In a report titled Tax Gap and Compliance Results for the Federal Corporate Income Tax System, the agency reported the corporate income tax gap for 2014 was between $9.4 billion and $11.4 billion.