Evidence of meeting #11 for Transport, Infrastructure and Communities in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was drivers.
A recording is available from Parliament.
Conservative
Jason Groleau Conservative Beauce, QC
Okay.
The Driver Inc. model is said to lead to unfair competition and tax avoidance.
Are you aware of that?
Policy Adviser, Canada Truck Operators Association
Sorry, I'm a lawyer. You would have to ask me a specific question. You're asking me a very broad, generalized question. You're asking me if I—
Conservative
Jason Groleau Conservative Beauce, QC
Does the Driver Inc. model lead to unfair competition and tax evasion, yes or no?
Policy Adviser, Canada Truck Operators Association
No. I mean, define “unfair business practice”. What are you specifically referring to?
Conservative
Jason Groleau Conservative Beauce, QC
I asked you a question and you didn't answer it, Mr. Vishwanth.
Policy Adviser, Canada Truck Operators Association
Again, I'll take you back to my technical response. It's based on evidence. I've actually broken down the costing model used by the narratives. When you actually take it down and apply proper inputs, real-world inputs, the costing model clearly tells you that there is no arbitrage for someone who decides to incorporate or otherwise.
I've also explained in this committee that someone who declares taxes as a corporation also has to declare taxes on the dividends he or she pulls out of the corporation. On a personal basis, the only arbitrage they would get is some time, but they would eventually have to pay it, so there is no loss to the CRA. I don't know what financial advantage you're talking about. There is no tax advantage to incorporating or otherwise.
Millions of Canadians incorporate. A lot of professionals incorporate. Tax regimes do work. The interesting thing is that there is no input from CRA on this issue. The authoritative body that would speak about it, if there were a “billion-dollar loss”, would be the CRA. There is no note from CRA.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Vishwanth.
Thank you, Mr. Groleau.
Next, we have, once again, Mr. Gaheer for five minutes.
Liberal
Iqwinder Gaheer Liberal Mississauga—Malton, ON
Thank you, Chair.
Mr. Vishwanth, I want to pick up on the line of questions that I was asking earlier. You touched on this in your opening testimony. One of the criticisms of the Driver Inc. model of incorporation was that somehow it affected safety standards. That was always an odd argument to make, in my eyes, because if you're a bad driver, you're a bad driver whether you're incorporated or whether you're an employee. If you're an employer—if you're a carrier—that's following bad practices, you're following them whether you have employees or incorporated drivers.
Do you want to comment on the safety aspect?
Policy Adviser, Canada Truck Operators Association
Safety is status-neutral. Safety is not related to your incorporation status. Safety is related to your training, to your experience, to your hours of training when you take your courses, and to your on-site training experience. It has no relation per se to your status.
From the beginning, this whole notion that tax and safety are jumbled into the Driver Inc. model.... That's the problem. That is the narrative that we have to break. I would rather call these folks not Driver Inc. but empowered drivers. Empowered drivers are by far more sustainable, more profitable and safer. Drivers who are unsafe should be weeded out. That is not a status-based issue but a safety-based issue.
October 21st, 2025 / 4:25 p.m.
Liberal
Iqwinder Gaheer Liberal Mississauga—Malton, ON
I want to touch on another issue. If they're employees, treat them like employees. If they're incorporated drivers, treat them like incorporated drivers. Don't mix the two models, because if that is happening, that is obviously a problem for the carriers who are treating incorporated drivers like employees or vice versa. That should not be happening. Again, it's not the model that's at fault. It's perhaps the enforcement, and maybe the education piece needs to be there.
Equipment is often raised as an issue. You mentioned four factors that determine whether you are actually an incorporated driver, or whether you should be an employee. I have a list of other factors as well. The factors would be ownership of tools and equipment, whether the worker can hire their own helpers, the degree of financial risk that's undertaken by worker, the worker's degree of responsibility for the investment in management, and the worker's opportunity to profit from the performance of the tasks. There are things like being able to reject work or not, deciding your routes, choosing your own hours and the right to set your own schedule and to avoid participation in company-specific pension or benefit plans.
These factors, and more, will determine whether you are incorporated or whether you are an employee, but carriers often tell me that their companies are being targeted for one fact alone, which is that when the trucks are not owned by the driver, the driver is still incorporated. I've read these rules. There's no hardline bright rule saying that if you do not own the truck you cannot incorporate. From what I see, there's a balancing of the scales.
Do you want to comment on that?
Policy Adviser, Canada Truck Operators Association
IPG-069 and IPG-105 give you the rules for misclassification. They are overarched by the Sagaz rules from the Supreme Court, which tell you that not one single factor is determinative. You have to take a holistic approach.
In trucking, in transportation, you would have to modernize those rules. There has to be some amount of modernization. A truck transport driver who can't afford to put a down payment of $100,000 on a truck is ineligible to incorporate his company. That's unfair. If I were to make a recommendation to this committee, I would make that one recommendation, which is to remove the test that says you need to show or display ownership of equipment and replace it with voluntariness: Does the driver choose to incorporate voluntarily without coercion? That would modernize that test. That would also get rid of all your issues with taxes and safety, because someone who has a stake in the game is safe. People who have a stake in the game will pay their taxes and will operate a safe fleet.
That would be my recommendation, or at least my observation at this point.
Liberal
Iqwinder Gaheer Liberal Mississauga—Malton, ON
I was going to ask you, what do you think is the overarching solution? From the carriers I've spoken to, audits often focus on just the ownership of the truck or ownership of equipment, but it's a holistic approach. This is what you talked about, as well, that they don't necessarily have to own the truck in order to incorporate.
Policy Adviser, Canada Truck Operators Association
The question really is, do you want competition or not? If you want competition, you have to allow people to participate in an economic model from which they would derive a benefit. One way to do it is to modernize the test. Empower these drivers to be able to control their own future and destinies. Remove that test and replace it with voluntariness.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much.
Mr. Barsalou‑Duval, you have the floor for two and a half minutes.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you, Mr. Chair.
I'm going to ask Mr. Bhangu a question, because he hasn't had a chance to answer a lot of questions so far.
Comments have been made so far that the Driver Inc. model does not present a risk of tax evasion, and that ownership of work tools such as the truck should be left out of the discussion.
What do you think of that?
Member of the Legislative Assembly of British Columbia, Jobs and Economic Development Critic, As an Individual
Excuse me. So, what you asked is whether there are ways that you can circumvent the tax system through Driver Inc.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
I'm going to ask you more clearly: Why is it often said that the Driver Inc. model can lead to tax losses for the government?
Member of the Legislative Assembly of British Columbia, Jobs and Economic Development Critic, As an Individual
As I said, in some ways, when there are newcomers in trucking in this country who are being taken advantage of, they'll set up as being incorporated. They don't realize that they have to pay themselves as an employee, so they'll just spend right out of the bank and right out of the business. Then, later on, they come up with the issues. It's as simple as when they go to buy a vehicle or a home and try to get any kind of financing. That's when the issues arise. That's when they wake up and realize they've been taken advantage of.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
If I understand correctly, newcomers don't necessarily understand that they have to pay taxes and then realize a little later that they can no longer afford to pay them once the money has left their account.
Is that right?
Member of the Legislative Assembly of British Columbia, Jobs and Economic Development Critic, As an Individual
Yes, that is a huge issue that I've seen numerous times. In my role as an MLA, I've had people reach out to say, “I was going down this path and this is what happened to me.” I have real-life stories of people who have approached me when—
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
I'm going to interrupt you, because I don't have much time left.
In that regard, it has been proposed that temporary immigrants not be allowed to incorporate and be limited to salaried status.
Do you think that would be a good solution?
Member of the Legislative Assembly of British Columbia, Jobs and Economic Development Critic, As an Individual
Yes, that's a great idea. I don't think they should be.
Liberal
The Chair Liberal Peter Schiefke
Thank you, Mr. Barsalou‑Duval.
Next we'll go to Mr. Albas.
Mr. Albas, the floor is yours. You have five minutes, sir.