Transport Committee on Oct. 5th, 2022

[Omar Burgan]

The Star report you referred to was an excellent report. We've seen citizens' groups step in out of frustration that the process whereby these members would grieve.... First of all, they aren't unionized, so they don't have a union they can go talk to with respect to representation, but even the process through the federal labour laws is very lengthy and onerous. They do not see any resolution, so they've taken the very non-traditional means of simply publicly shaming employers who are not even paying them what they're owed.

I think what would help would be either if they joined a labour union so they would have an institution that protected them from such practices or, in the absence of that, if there was better enforcement of the rules so that companies wouldn't be so tempted to abuse their workers.

[George Chahal, Liberal, Calgary Skyview, AB]

Mr. Laskowski, would you like to comment on that?

[Stephen Laskowski]

Absolutely. We are strong advocates and supporters with regard to this particular issue, and I'm glad you asked the question.

We believe that whether it's training dollars for people who are Canadian citizens currently going through programs or for people who are new to Canada coming through various immigration programs, we need programs for trucking companies, but we want them screened. They should be known employers that have the highest work standards and that are committed to safety, so we can ensure that the labour rights and the working rights of these needed workers—people who are already Canadian citizens or permanent residents or temporary foreign workers—when they go to work for the thousands of compliant trucking companies, are taken over, and this can be done.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Chahal and Mr. Laskowski.

Mr. Barsalou‑Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Mr. Laskowski, during your opening statement, you talked about the problem of the underground economy in the trucking sector.

Since I am not familiar with this situation, could you tell us more about it?

[Stephen Laskowski]

Sure. It's referred to as a personal services business. It's a technical term for what is really a misclassification scam. It allows trucking companies to organize drivers.... It's not allowed now, but they misclassify them so as not to pay them overtime or give them holiday pay and severance. These companies are then void and allow themselves to be carved out of payroll taxation. It also allows companies and drivers to skirt income taxes. It becomes a black hole in our sector, and it's not a small black hole. It's estimated to be between 20% and 30%.

CTA commissioned a study, using Statistics Canada data, which showed that our sector, in cities like Calgary, Winnipeg, southern Ontario, Montreal and Halifax, has the fastest growth in what's called zero-based employee companies of any sector in Canada. Anybody second to us is not even close. This is Driver Inc., and it has to stop.

What it's doing to other companies is that over 50% of drivers are going to companies across Canada and saying, “I want to be paid the incorporated model. I don't want to be on your payroll.”

If CRA doesn't step up soon, we have a big problem. We are going to have a major, major problem. Our industry wants this stopped. The compliant drivers want it stopped, and the drivers who are being abused want it stopped. We need the assistance of the Government of Canada, particularly CRA, very quickly on this issue.

Minister O'Regan has already said that he will step up. He has disavowed this in the House, but we need action, and we need it quickly.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Burgan, do you have any comments to add?

[Omar Burgan]

The Canadian Trucking Alliance did excellent work in this case. I regularly consult its resources on this issue, which is a real problem for the industry. Companies have found a way to neatly avoid paying any compensation for overtime or vacation. It is a big problem, and it has gotten worse. As mentioned by Mr. Laskowski, many companies own trucks, but they don’t have a single employee.

According to the CRA, if everything points to an individual being an employee, they are an employee. They can’t just use a scheme to try and avoid labour laws. But that’s exactly what these companies are doing.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Laskowski, earlier you talked about the challenge of aging truck drivers, and you said it was difficult to recruit younger ones.

Do you think that incentives to retain experienced workers, including tax incentives, could be part of the solutions that might help?

Have you thought about other measures the government could implement in this area?

[Stephen Laskowski]

As an alliance, we really haven't looked at that aspect from the Government of Canada. Other provincial associations may advocate down that avenue. Our board hasn't examined that particular issue.

I can assure you that driver pay has gone up over 20% to 30% over the last two years. Incentives have gone up. Companies work with their drivers to pick routes they want to go to. There are market solutions to this. They're being worked on. From the Government of Canada, we really need training dollars to help onboard people onto the trucks very quickly. It's our number one priority with regard to what we'll call incentives.

Just because you have a driver's license that qualifies you to operate a tractor trailer, that doesn't mean you're ready to work in the trucking industry. That comes with significant cost. Many sectors have apprenticeship-type onboarding programs. We have zero access to those types of programs and those dollars. That needs to change.

Those are the programs that we would like to see move forward with the Government of Canada and the trucking industry. Again, let's not reward the underground economy and give dollars to those companies. Let's give the dollars to vetted trucking companies that follow safety practices and maintain high labour standards.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Barsalou‑Duval.

For the next question we have Mr. Bachrach.

The floor is yours. You have six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair, and thanks to our witnesses. This is an interesting and important topic.

I wonder if I could pick up where Mr. Barsalou-Duval left off on this Driver Inc. scheme. It's something I'm not very familiar with, but it seems like a serious issue.

I wonder if either Mr. Laskowski or Mr. Burgan have thoughts about the specific remedy that's needed. Is it a legislative remedy? Do we need to make changes to the Income Tax Act? How does the government prevent this kind of scheme from happening? Is it simply a matter of increasing enforcement and CRA resources to go out there and ensure compliance?

I know in other sectors there are pretty clear definitions of what constitutes an employee versus a contractor in terms of providing the facilities of work. If you're a contractor, you have to provide your own office and your own equipment, and that kind of thing.

Is this a matter of those rules not being consistently applied across sectors? Is it a matter of not having enough proactive enforcement? Are there changes that we can advocate for through our report that would help address this situation in a legislative way?

Maybe we could start with Mr. Laskowski, and then Mr. Burgan could add his thoughts.

[Stephen Laskowski]

Really, sometimes life is more complicated, and sometimes it is really easy. In this one, CRA needs to enforce the laws that are currently on the books. There is no legislation required. From a CRA perspective, enforce the laws on the books.

From an ESDC perspective, ESDC is out in the field. I believe the Teamsters mentioned that earlier. Companies are being addressed. We'd like to see—and I'm sure the Teamsters would too, but I don't want to put words in their mouths—that for these companies that are found guilty and in violation from an ESDC standpoint, every single driver who is entitled to it receives his or her back pay.

With regard to the CRA, ESDC is discovering dozens of companies in gross violation. Our request is really simple to the CRA: Why aren't you seeing the same companies and auditing the same companies that ESDC is finding in gross violation of Driver Inc.? To us, it's a matter of enforcing the law.

[Omar Burgan]

We agree. We have heard that up till now there's been very little enforcement. When there has been, it's been just a slap on the wrist—a very small financial penalty. Any enforcement has to really be....

A lot of drivers are lured into this. They are just seeking work and a paycheque. They get told by the company that they can make way more money if they just incorporate, and that they do it all the time. Workers get drawn into this and then further down the line they figure out that it's not something that should have been done.

We think that by now most employers are aware that this is a scheme by which they are bypassing labour laws. We think that penalties should be placed on the employers for engaging in such practices.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thanks, Mr. Burgan.

Following up on that, maybe this is self-evident, but does this underground economy create downward pressure on the overall conditions of work across the sector?

[Omar Burgan]

Absolutely, and we hear members telling us about it. Members who over time have organized and have solid working contracts say that their employers will tell them they're having trouble competing with the companies that are cheating. As a result, they start telling the workers who have decent working conditions that they need to consider cutting down on them, because they can't compete with the companies that aren't following the rules.

It penalizes workers who have organized their workplaces and negotiated solid contracts and good working conditions, and it also penalizes companies that actually respect their workers and follow the rules.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Burgan, you mentioned unionization and the advantages of having the protection of a union. Across the sector, do you have numbers in terms of the percentage of unionization? Also, do you have a sense of whether there's a gap both in the ability to recruit to unionized versus non-unionized positions and in the compensation for those positions? There must be statistics on how truck drivers are paid by unionized and non-unionized employers.

[Omar Burgan]

There definitely are. I don't have any of those statistics on hand.

It goes without saying that when you get the opportunity to negotiate, you get good working conditions and you get better working conditions, and you have the leverage of the labour union in order to obtain those, especially with things like enforcement. The two things unions can do for workers are to negotiate contracts and to enforce those contracts. Throughout my work experience, and even in my personal life, for workers who face bad employers without the protection of a union, it's a lot more work to get those employers to follow the rules and treat workers with respect.

As I mentioned, it was actually much easier earlier in the century to form unions. A lot of provinces have put in place two-step laws for unionization, to allow employers to break down unionization drives. We're seeing now that some provinces—notably B.C.—have the card check law, which makes it a lot easier and fairer for workers to organize their workplaces.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Burgan and Mr. Bachrach.

Mr. Muys, the floor is yours. You have five minutes.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you, Mr. Chair.

Permit me, if you will, to editorialize for a moment. I know that all members of the committee will probably agree, because we're going to get to the report-writing stage of this, obviously, after a few meetings.

The title on the notice of meeting is “Anticipated Labour Shortages in the Canadian Transportation Sector”. I would suggest that if we're talking about a 30,000 to 50,000 shortage of truck drivers, it's not “anticipated”. It's now. I think we've heard that from the witnesses. It's just that “anticipated” implies perhaps the lack of a sense of urgency. I'm sure we agree, but I'm just going to make that point right up front.

We've heard about temporary foreign workers, the pathway to citizenship and encouragement of the immigration of skilled trades as potential solutions to the shortage of truck drivers we have currently. I spoke to businesses as recently as last Friday who've had issues getting skilled trade workers through the IRCC processes—as I know and we've all witnessed—and through the various federal government processes. What used to take three months or less is now taking 10 months, and it's often worse.

Maybe you can elaborate on how as a federal government we can reduce some of the hurdles and get workers in faster, whether it be through the temporary foreign worker process or the various other immigration streams.

That's for either the freight forwarders or the CTA, who referenced that, or certainly the Teamsters. That's for anyone who wants to comment.

[Stephen Laskowski]

I'll jump in.

I want to applaud Minister Fraser, who's already made a significant announcement. The change isn't in place, but the trucking industry, specifically the truck driver, will become part of the express entry program. That was a significant change and a significant announcement. Some details still have to be worked out on this, but we'd like to see drivers made a priority within the express entry program for 2023. Again, working with the folks at the express entry program, we'd like to ensure that the drivers brought in through the program will end up with trucking companies with the highest labour and safety standards.

We applaud Minister Fraser and his team for announcing this direction. We very much look forward to working with them in a collaborative manner to make sure that drivers are a priority in 2023 and to make sure, to the best of our ability, that these people coming to Canada end up with labour-compliant trucking companies and not being abused as you read in that Toronto Star article.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

All right.

To the CTA, in terms of staff retention and staff recruitment—obviously, they're two different things—you referenced training funds as the number one priority. That makes sense from the staff recruitment perspective. What are the top three things that could be done in terms of retaining existing drivers and then recruiting new drivers to the process?

[Stephen Laskowski]

Mr. Chair, is that question for CTA or for the panel?

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

I referred to your previous comment about training dollars, but maybe you can elaborate on the top few things from the perspective of both retention and recruitment.

[Stephen Laskowski]

Sure.

Currently, the trucking industry has zero access to training dollars other than through what I'll refer to as, and I'm not trying to belittle them, more one-off programs. We would like to see almost an apprenticeship-like program, whereby once an individual goes through the mandatory entry-level training in our industry, they have the ability to drive either a straight truck, as we call it in our industry, or a tractor-trailer.

Really, what is needed now, especially with 30,000 individuals short, is the training dollars to onboard people. Just because you have the licence, it doesn't mean you're ready to drive a truck. Again, what we want to see is good companies rewarded with training dollars to help them onboard. Typically, you'll need two people in the truck. You're not going to put that person on the long haul. You start them off on shorter hauls. This is all to make sure that things are done safely, that people are integrated into our industry in a safe manner, and that they will stay in our industry.

Really, this is what it's about. Number one, let's make the dollars available to our industry to help onboard these people; and number two, let's make sure these dollars go to companies with the highest labour and safety standards.