Source: Correspondence to Minister of Transport
Location: National
Date: September 2025
Suggested Responses
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Transport Canada is following the issue of worker misclassification and associated tax implications in the trucking sector closely.
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Transport Canada is supporting the Employment and Social Development Canada Labour Program and the Canada Revenue Agency in their oversight work.
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On the topic of worker misclassification, Budget 2024 announced that Employment and Social Development Canada and the Canada Revenue Agency will enter into data-sharing agreements to strengthen inspections and enforcement.
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Transport Canada officials will continue to work with federal, provincial and territorial counterparts, through the Canadian Council of Motor Transport Administrators, and trucking sector stakeholders, to strengthen commercial vehicle safety in Canada.
Background Information
In the trucking sector, drivers can sell their services to carriers through an incorporated personal services business arrangement under the federal Income Tax Act. The Canadian Trucking Alliance (CTA) and certain other stakeholders characterize this practice as the “Driver Inc.” model. These stakeholders suggest that the model can give rise to employee misclassification and taxation issues, contributing to an ‘’underground economy’’ that exploits vulnerable workers and negatively affects the sector. Several trucking industry representatives identified Driver Inc. as their top issue during the trucking hackathon that was hosted by Transport Canada in July 2025.
The CTA has been openly critical of federal departments with oversight of labour and taxation roles (i.e., Employment and Social Development Canada-Labour Program; Immigration, Refugee, and Citizenship Canada; and the Canada Revenue Agency). The 2022 Fall Economic Statement committed $26.3 million over five years to the Employment and Social Development Canada Labour Program to take stronger action on misclassification. Building on this commitment, Budget 2024 announced that Employment and Social Development Canada and the Canada Revenue Agency will enter into necessary data-sharing agreements to facilitate inspections and enforcement.
On September 16, 2025, Quebec MP Xavier Barsalou-Duval wrote to the Minister of Transport requesting that he take immediate action on Driver Inc., specifically requesting that the Minister:
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conduct a national level study on Driver Inc. to determine its magnitude and implications; and
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prohibit temporary immigrants from being able to incorporate, and only permit them to be salaried employees.
PROVINCIAL/TERRITORIAL CONSIDERATIONS
TC has raised the issue of misclassification with provinces and territories but it has not been a formal agenda item for Ministers or Deputy Ministers of Transportation and Highway Safety. Provinces and territories have responsibility to enforce safety regulations for both federally regulated and provincially regulated commercial trucking operations. Provincial and territorial officials are monitoring the potential for knock-on safety violations associated with this issue and some have started piloting joint enforcement activities with the federal Labour Program. Following the trucking hackathon, the CCMTA has created a Working Group to look at further action it can take on Driver Inc within the mandate of its members. Transport Canada is participating in the working group.
INDIGENOUS CONSIDERATIONS
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This is a labour and taxation issue that does not disproportionately affect Indigenous communities, nor does it relate to addressing recommendations from the Commission on Missing and Murdered Indigenous Women and Girls or advancing reconciliation.