Bill C-39 Committee on Oct. 27th, 2026

[Jonathan Blackham]

The industry calls what we're talking about Driver Inc., which is just a short form for incorporated drivers. A misclassification scheme is what it really is.

These drivers are people who are, by all regards, employees, but the employer says, “No, you're an independent contractor.” They don't meet the independence test. There's no argument to be made here. It's just a misclassification.

What that allows the company to do is sidestep the Labour Code. There's no overtime, and there are no vacation days. There's no paid sick leave. The list goes on and on. Per driver, they're pocketing probably $30,000 a year in illegal savings. It is completely warping the competitive landscape of our industry, and it strips workers of their rights. It is bad for everybody.

For a long time, we didn't have a lot of response to our issue. We were yelling, but there wasn't a lot of response. That's changed more recently, particularly under our current labour minister. There has been action taken. There's a misclassification team focused on our sector, but I think they lack resources. I think they're only making a dent in the problem, and there needs to be much more done and much more support for those folks.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Okay. Thank you. I understand. We need more resources.

The Journal de Montréal published an article Sunday about fake driver's licences. I quote from the beginning of the article: Ordering a fake Quebec driver's licence online, Made in China, is child's play. Experts are sounding the alarm: these false driver's licences can be used by unsafe truck drivers or by criminals who will commit all kinds of fraud.

Do you have a comment on what this article says, and is this something you see with your members?

[Jonathan Blackham]

I did see what you're referring to. In terms of whether or not I can absolutely verify it, I can't, but I did see it.

What I can say is that I think folks would be surprised to see the level of fraud taking place in our industry. It probably includes licences, but it definitely includes insurance. There's a disrespect for safety practices, driver training—you name it—across the board. It's shocking to see it, but at the same time, I'm also not surprised to see it.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Okay. Thank you.

I have a question for the representatives of the three organizations of this panel.

The union representatives we've welcomed so far have said that because of the way Bill C‑39 defines section 107 of the Canada Labour Code, the employer will know that if the labour dispute drags on, the minister will have the power to put an end to it. This means an employer may sometimes want to voluntarily let the labour dispute drag on, knowing the minister will resolve the situation. Rather than encouraging the employer to quickly settle through negotiation, this could prolong the dispute. Some unions have used the dispute at Air Canada as an example, where the company expected the minister to intervene. Once the government said it wouldn't intervene, it took two days to come to an agreement.

I'd like to hear your thoughts on what the unions have said, starting with Mr. Hynes. Mr. Harvey and Mr. Blackham can add their comments afterwards if they wish.

[Derrick Hynes]

I think that's a really excellent question and one that gets to some of the, if I dare say it, myths that are being communicated on these issues on behalf of the employer community.

I represent, obviously, the employer community, the businesses that are doing this bargaining. It is inaccurate to conclude that an employer is waiting for the government to bail them out. Employers do not want collective bargaining settled through binding arbitration, full stop. For us, it's a failure in the process when we get to that point. It's better than the alternative of allowing a highly consequential work stoppage to occur in a critical supply chain space, but employers want to bargain with unions. They want to bargain in good faith. They want to settle on terms with the union in a full partnership that results in a win-win solution.

Employers and companies want certainty. They want stability. This process that we've been living through in the last few years with the invocation of section 107 has actually resulted in more instability. None of that is good for the employer. It's not what we want. We want a process that incentivizes better collective bargaining and gets the parties to deals without government intervention. Government intervention, for us, is a last resort when all else has failed.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

There are 10 seconds left, Mr. Harvey.

[Eric Harvey]

What we're asking for is that the intervention not be systematic, but only when strict conditions are met. It shouldn't necessarily be something that the employer can take for granted.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Leslie, go ahead for five minutes.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Thank you, Mr. Chair.

I'll direct my questions to the Railway Association.

Mr. Harvey, your association has warned that Bill C-39 could send Canadian railway jobs and investments to the United States. Do you have any actual figures from the previous interswitching pilots that show how much Canadian business went to American railways?

[Eric Harvey]

That evidence is with Transport Canada. Basically, they collected the information from class I railways, CN and CPKC, during the last two pilot projects.

Essentially, the experience of these two pilots shows that the traffic is an interchange with a U.S. railway. That traffic then moves to the U.S. The train that moves to the U.S. doesn't move in Canada. It is not moved by Canadian employers, and that traffic is not handled at Canadian ports. Everything essentially happens in the U.S.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Are you disputing...? Transport Canada, regarding the first iteration of this pilot program, found no evidence of unintended consequences from that pilot, yet you continue to insist demonstrable harm.

They stated, “less than 1%” of prairie traffic used extended interswitching during the 2014 to 2017 pilot. Could you provide any shipping costs or delays from the last pilot that support this position and any investments not made by railways due to the pilot program being in place?

[Eric Harvey]

Canadian railways invest massively in their network in this country.

In my opening remarks, I mentioned the number of employees we have and the tracks we have. The measure we're talking about is essentially diverting traffic to a U.S. railway that doesn't have 40 kilometres of track in this country and doesn't have 20 employees.

The issue for us is this. As we establish measures that divert rail traffic to the U.S., we are essentially establishing a process by which that traffic will move more and more to the U.S.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

I appreciate what you're saying. I appreciate the investments that the duopoly has made here.

In a 2025 report from RAC, it stated, “In 2024, railways invested a record $4.5 billion”, up from 2023. This was, of course, while the pilot was operating. Further, the profits of both members of the duopoly went up about $400 million in 2025, after that major investment.

With profits rising and with investments going up, I fail to see how you can claim with any legitimacy that these pilot programs have had a significant harmful impact on your industry.

[Eric Harvey]

They did have an impact, because they diverted traffic for which railways are investing in this country, with the expectation of moving it in Canada. Essentially, this policy is about taking Canadian traffic and giving it to a U.S. railway at a below-market rate, at—

[Branden Leslie, Conservative, Portage—Lisgar, MB]

I don't believe that. I believe it's about competition.

In fact, I noticed a statement that you put out on September 24, where you said that your industry is best supported by “the power of free markets”. How is protecting this duopoly from any competition aligned with that statement?

[Eric Harvey]

I want to tell you a few things on this.

First, Canadian railways do compete with each other. You have CN and CP. They are two national railways. They do compete with each other.

The second aspect is that we're talking about grain, which already benefits from the maximum revenue entitlement for all traffic going to western Canada for export.

Essentially here, you're adding a measure that is aimed only at giving traffic, at a below-market rate, to a U.S. railway.

[Nathan Cato, Chair of the Board of Directors, Railway Association of Canada]

I will add on that one point. Back in 2018, Parliament created long-haul interswitching. It was designed as a replacement for extended interswitching.

This is not about competitive access for the shipper, because they have that. Today, under the law, it gives them access—up to 1,200 kilometres away—to a competing railway. It's simply about the rate that gets paid. Is it a cost-based, regulated rate?

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Mr. Cato, I appreciate that you brought that up, because the usage of that was abysmal. The claims from shippers were, frankly, that they feared repercussion from the two major players. You can't move a grain terminal to go to a different railway. The opportunity, then, for extended interswitching to be available to create a legitimate market dynamic that is permanent would remove that potential likely impediment of repercussion, of rates going up, once the temporary pilot program is in place.

That's why, in my view, this should be permanent. A four-year program is better than an 18-month or a two-year program, but the permanency of that will prevent the duopoly from increasing those rates down the road.

[The Chair, Liberal, James Maloney]

Be brief, Mr. Cato, if you have an answer.

Go ahead, Mr. Harvey.

[Eric Harvey]

I would simply like to say that there were two reviews that looked at this issue in detail, and both recommended that extended interswitching not be maintained—two studies that looked at the numbers and the impact on the market.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Who funded the studies?

[Eric Harvey]

Well—

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Kelloway is next.

[Mike Kelloway, Liberal, Sydney—Glace Bay, NS]

Thank you, Mr. Chair. I appreciate it.

It's good to see the witnesses today.

I have an observation, a comment and then a question.

The observation is this. We're well into this study. With respect to the use of section 107—the existence of section 107—we've heard from labour groups that are opposed to it and the existence of the guardrails that are being proposed with the legislation. We've also heard from industry, which has talked about pre-emptively utilizing section 107 to stop a strike.

I want to take a moment to maybe do a reset here. I want to be clear that the government has worked hard on this legislation to find a balance, quite frankly, that supports the national interest and workers. I'll be even more clear. We believe in the fundamental principles of the right to strike, which is being proposed in this legislation. I just wanted to highlight that as we move into this study.

We appreciate your opening remarks, each one of you. In particular, I'm going to start with Mr. Blackham.

I'm not sure if it was you, Mr. Blackham, but somebody mentioned COVID and conjured up some memories of how important all of you were during COVID, but in particular trucking and transportation, and how we found this new awareness of the importance of the supply chain. In this bill, we're proposing streamlining essential infrastructure.

I'm wondering, from your perspective, if you have a priority list in your mind and in the mind of your organization of what that means in terms of streamlining essential infrastructure from a trucking perspective. Can you articulate that now to us?

[Jonathan Blackham]

Sure. If I understand your meaning, for us, obviously, one of the main focuses could be the Trans-Canada, the national highway system.

As well as it connects east and west via trucks, there are major gaps: rest stops, lack of cell coverage along the way, and truck inspection stations that are often not open. In terms of a corridor or a key part of our transportation system that could be focused on, that's certainly one.