An Opinion Piece by Mike Millian, President of the Private Motor Truck Council of Canada
Underneath the surface of the transportation industry is a movement of drivers and carriers that are embracing an incorporation model, sometimes referred to as Driver Inc. Under this model, drivers are incorporating themselves to work for companies as independent operators, even though they are operating a company truck, have no more rights of movement than a company driver, and are, in all sense of the word, an employee of the company. The CRA deems this type of employment, if identified correctly, as a “personal service business,” which comes with the task of independently filing and paying taxes under the driver’s business, not the employer they’re working for, and comes with a higher tax burden as write offs that are available to true independent contractors, such as meals, fuel, repairs are not available for a personal service business.
This means that carriers are saving money by hiring what they claim are ‘independent drivers.’ This type of practice allows carriers to avoid paying for incentives that often come with working as an employee, such as benefits, and does not include the legal protections that are in place for employees, such as short- and long-term disability, sick leave, holidays, overtime, and termination rights. These incorporated drivers are left to their own devices – running a ‘business’ without guidance, incentives, or systems in place to support them in the long-term – while the carrier reaps the rewards of reduced payroll costs and obligations.
This is simply the ‘root’ of the problem – the domino effect of issues that improperly classified incorporated drivers creates and leaves behind impact all facets of the industry. For instance, carriers that work under and encourage this model have the capacity to bid on jobs at a reduced rate, in comparison to others, because their operations costs are lower than they should be as a result of dodging tax obligations and other required source deductions. This means that carriers that legitimately operate their businesses with employees or legitimate incorporated drivers and owner/operators need to lower their costs to compete and gain the work; however, can’t afford to do so.
Meanwhile, there are some incorporated drivers who are il-versed about the financial obligations that come with operating a “personal service business;” therefore, aren’t filing their taxes properly or, in some cases, at all. According to Teamsters Canada, the Canadian Trucking Alliance and Association du camionnage du Québec, this type of fraud is costing governments at least $1 billion annually. In addition, the tax rate for a “personal service business” is 33% – meaning that incorporated drivers under this model would be paying more in taxes than company drivers (if they are filing properly).
There is zero legal benefit for a driver to become incorporated under this model; however, it continues to gain traction and buckle the momentum of the transportation industry. Simply put, we need to be better at educating others about what it means to operate under an employer, the financial obligations and protections that come with employment, and enforcing the rules when others break them.
For example, we’ve had members share stories of new hires questioning why there was money deducted off their paycheques. To prevent any misunderstanding of how your company operates, take the time to educate your new hires about the many benefits that come with being an employee – including having access to benefits, short- and long-term disability insurance, unemployment insurance, sick leave, holidays, and overtime – and what the financial breakdown looks like on their paycheques. This level of transparency from the word ‘go’ will help set the stage for trust, nurture your company’s workplace culture, and remove the risk of turnover.
Other members have shared stories of learning about a driver operating under the incorporated model while operating a company vehicle for another company. If you discover a driver working for a carrier operating under this model, report the carrier to the CRA – or talk to your supervisor, who will handle the report on your behalf.
We need to band together to prevent this problem from gaining even more momentum and taking away from all that we’ve worked towards: a legitimate place to drive, operate and serve in the transportation industry.The Private Motor Truck Council of Canada is the only national association dedicated to the interests of Canada’s private and dedicated trucking community. Its membership consists of private, dedicated and for-hire truck fleets as well as suppliers to the industry from every part of the country.

About Mike Millian
Mike Millian is President of the Private Motor Truck Council of Canada (PMTC). Mike began his career in the trucking industry in 1990 at the age of 18, spending three years working for a local carrier hauling livestock and bulk agriculture products. At the age of 21, Mike went to work for a long haul refrigerated and general freight carrier and spent five years hauling all sorts of freight in all 48 U.S. mainland states and six Canadian provinces. The carrier then opened a Certified Driver Training School in 1998 and Mike came off the road and became one of the school’s first Certified Driver Trainers. In 2000, Mike transitioned into safety and compliance for the fleet, while still working part time as a trainer for the school. In 2002, Mike moved over to a private fleet and became the Safety, Compliance, Maintenance, and Training Manger for the Hensall District Co-operative’s Commercial Trucking Fleet. Mike spent the next 12+ years with Hensall and oversaw the fleet as it grew from 40 trucks to over 140. In January 2015, Mike moved into the trucking association business and was named the president of the Private Motor Truck Council of Canada, where he remains in his current role.

About Private Motor Truck Council of Canada
Established in 1977, the Private Motor Truck Council of Canada (PMTC) is the only Canadian association dedicated to the interests of private fleet operators. The PMTC provides forums for fleet operators and industry stakeholders to exchange views and resolve issues together and is at the forefront in representing your views to government, protecting your rights, and promoting your interests.
For more information, please contact:
Private Motor Truck Council of Canada
email: info@pmtc.ca
Tel: 905-827-0587
225 Main Street East, Unit 5
Milton, Ontario, L9T 1N9
www.pmtc.ca
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