The Insurance Bureau of Canada (IBC) has endorsed the federal government’s Budget 2025 measures targeting fraudulent practices in the commercial trucking sector, following years of industry concerns about driver misclassification and inadequate training.
The federal government announced Thursday that it will allocate $77 million over four years, beginning in 2026–27, with ongoing annual funding of $19.2 million for the Canada Revenue Agency (CRA) to combat the “Driver Inc.” scheme. The initiative will lift the moratorium on penalties for failing to report fees-for-service transactions in the trucking industry and implement a focused program addressing non-compliance related to personal services businesses.
Liam McGuinty, IBC’s vice-president of federal affairs, welcomed the announcement in a statement released following the government’s budget reveal.
“IBC and its member companies welcome the federal government’s commitment to address concerns regarding the misclassification of commercial truck drivers in Canada,” McGuinty said. “For years, insurers have raised concerns about fraud in the trucking industry.”
According to a news release, the Driver Inc. scheme involves trucking companies misclassifying drivers as independent contractors rather than employees, depriving workers of benefits and pensions while avoiding tax obligations. The practice has been described to undermine legitimate businesses that comply with regulations and creates safety concerns on Canadian roads.
According to IBC’s 2024 report on the trucking sector, inadequately trained drivers are more likely to be involved in collisions. The IBC said it testified on this issue before the Standing Committee on Transport, Infrastructure and Communities on Oct. 28.
“Misclassified and undertrained drivers endanger their own safety and that of others on the road,” McGuinty said. “The companies and drivers that exploit the system make it worse for legitimate trucking businesses that follow the rules.”
Finance minister François-Philippe Champagne emphasized that the budget measures will crack down on the scheme while protecting compliant businesses and workers. “Budget 2025 is cracking down on Driver Inc., closing loopholes, making our roads safer, and standing up for drivers and businesses that play by the rules,” Champagne said.
The budget also proposes amending the Income Tax Act and Excise Tax Act to allow the CRA to share taxpayer information with Employment and Social Development Canada regarding worker classification.
McGuinty noted that these practices contribute to cost pressures in the insurance system, affecting all Canadians, and pledged continued collaboration with governments, regulators, and stakeholders such as the Canadian Trucking Alliance to develop cross-jurisdictional solutions.
“A safe and prosperous commercial trucking industry today is critical to the Canadian economy,” McGuinty noted.
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