The trucking industry implores Ottawa to keep its promises to fight the scourge of “Chauffeur inc.” “. Increasingly common, this practice is used by freight transport companies to hire “incorporated” drivers as subcontractors to avoid paying certain taxes, in order to offer services at a discount.
“Right now, the government is depriving itself of social royalties from genuine workers. Across Canada, we can talk about billions. And in Quebec alone, several million dollars, ”says the CEO of the Quebec Trucking Association, Marc Cadieux.
In recent years, the practice of “Chauffeur inc.” is used by many players in the industry, laments Mr. Cadieux. “A person will first incorporate as a legal person, which is not prohibited, but then he will claim tax deductions from a corporation, while he is a simple worker. That is clearly prohibited, ”explains the manager.
He believes that the scheme allows fraudsters to realize substantial savings by bidding on tenders, which creates “unfair” and “unfair” competition in the market.
“These guys are about 20-30% off the normal pricing. They don’t pay CNESST, no RAMQ, no Quebec pensions. The carrier who hires the Driver inc., in the end, therefore does not have to make a paycheck. He pays the person as a consultant, on an invoice for services rendered that has no source deductions,” continues Mr. Cadieux.
Teamsters Canada public affairs director Christopher Monet also says the phenomenon is growing. He estimates that more than 10,000 drivers are using this scheme right now in the country. “The public would be surprised at how many 18-wheel tax havens there are on our roads right now. It’s a real scourge,” he says.
“We even see companies asking their employees to incorporate. They are dangling the fact that there will be no more deductions from their pay. They are not saying, however, that they will no longer have any protection in the event of an accident at work, no more employment insurance, no more paid parental leave, ”continues Mr. Monet.
In November, in its budget economic statement, the Liberal government of Justin Trudeau had committed to “contribute $26.3 million over five years, starting in 2023-2024, to Employment and Social Development Canada so that it takes tougher action against non-compliant employers through orders, fines and prosecutions to strengthen the Canada Labor Code.”
However, in her most recent budget unveiled at the end of March, the Minister of Finance, Chrystia Freeland, did not finally announce any additional funding. “In Ontario, the equivalent of the CNESST [Commission des normes, de l’équité, de la santé et de la sécurité du travail], the Workplace Safety and Insurance Board, already has a pilot project in this direction. They recovered several million dollars. It’s done to regulate, “illustrates Marc Cadieux.
Christopher Monet says he is “very surprised by the lack of details in the federal budget”. “We need public clarifications on law enforcement. All of this is undermining normal wage growth in the industry at a time when the cost of living has skyrocketed,” he said.
Ms. Freeland’s office, however, is said to have committed in Budget 2023 “to amending the Canada Labor Code so that federally regulated workers receive the protections and employer contributions to which they are entitled, including health insurance. Employment and the Canada Pension Plan”. “We’re listening to workers to make sure we’re getting it right, and we’re focused on education, outreach, and stakeholder engagement in all federally regulated private sectors to end the misclassification,” says publicist Hartley Witten.
The office of the Quebec Minister of Labor, Jean Boulet, affirms that the CNESST has just set up “a whistleblower line to continue to document the situation”.
“The documentation is also done in collaboration, in particular with the Quebec Ministry of Finance. Thanks to these denunciations, checks were carried out with transport companies in order to ascertain the application and compliance with the laws in matters of financing, “says the Minister’s press attaché, Maude Méthot-Faniel.
Quebec also recalls that the practice of “Chauffeur inc. is in itself legal, but that it can become illegal “if it is imposed by transport companies to circumvent the laws applicable in Quebec”. “We continue to work with other government partners with the aim of regularizing, more generally, the problem of incorporated employees,” concludes Ms. Faniel.
