Canada Revenue Agency Responsibilities under the Income Tax Act
Scope of oversight authorities: All trucking operations in Canada
The Canada Revenue Agency (CRA) administers tax laws for the Government of Canada including the Income Tax Act. Pursuant to this act, drivers can sell their services to carriers through an incorporated personal service business (PSB) arrangement which has been characterized by some stakeholders as the “Driver Inc.” model.
CRA undertakes verification activities on payers and workers, including PSBs, as part of its regular compliance work. When PSBs are found to not have fulfilled their tax obligations, they are subject to enforcement actions which can result in the assessment of taxes owing and related penalties and interest.
CRA also conducts education and assisted compliance activities to inform PSB’s of their tax obligations. This includes web and social media-based educational activities as well as joint operations with Employment and Social Development Canada and Provincial/Territorial commercial vehicle safety authorities to inform drivers of their rights and obligations.
Employment and Social Development Canada (ESDC) responsibilities under the Canada Labour Code
Scope of oversight authorities: All federally regulated trucking operations in Canada
The ESDC Labour Program oversees enforcement of the Canada Labour Code (the Code) which outlines the rights and responsibilities of workers and employers in federally regulated workplaces. The Labour Program has a dedicated enforcement team to address employee misclassification in the trucking industry where workers who should be treated as employees are instead labelled as independent contractors and are denied the rights and protections guaranteed under the Code.
The Labour Program is also engaged in extensive outreach activities, including partnering with provincial motor carrier enforcement agencies to connect with drivers and raise awareness of misclassification. Joint operations have been conducted at weigh stations in Quebec, Ontario, British Columbia, Nova Scotia, Alberta, Saskatchewan and Manitoba.
ESDC’s mandate is limited to federally regulated trucking operations. Provinces and Territories are responsible for the application of labour laws to intra-provincial truck operations, including instances of misclassification as defined in provincial laws and regulations.
Transport Canada responsibilities for commercial vehicle safety
Scope of oversight authorities: Oversight of Transport Canada regulations, applicable only to federally-regulated trucking operations, is carried out by provinces and territories.
Under the Motor Vehicle Transport Act (MVTA), TC is responsible for certain operational matters (e.g., hours of service rules) relating to commercial vehicles (transit buses, motor coaches, trucks) that cross P/T boundaries and the Canada-U.S. Border. Provinces and Territories (P/Ts) have jurisdiction over intra-provincial motor carrier operations, and carry out enforcement of both federally-regulated and provincially-regulated motor carrier regulations. P/Ts are also responsible for driver training, driver licensing, vehicle registration and rules of the road.
Transport Canada works with the provinces and territories to advance a consistent, national approach to commercial motor vehicle safety through the Canadian Council of Motor Transport Administrators (CCMTA). This includes administration, oversight and maintenance of the National Safety Code (NSC) for Motor Carriers (https://www.ccmta.ca/en/national-safety-code), which sets out 16 operational safety standards for commercial vehicles.
All jurisdictions establish safety-related legislation and regulations on the basis of the NSC. For example, Transport Canada’s Commercial Vehicle Drivers Hours of Service Regulations are aligned to NSC 9.