Transport Committee on Oct. 28th, 2025

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

Do incorporated drivers present different claims or liability challenges compared to traditional drivers? I think you've touched upon on that in various forms, but a definitive answer would be helpful.

[Cecilia Omole]

Yes. I have spoken briefly with our members, and we do not have a formal position on this. It's still something we are looking into. I would believe that they would be seeing some differences there, but we're unable to comment on what those differences might be at this time.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Kelloway.

To all of our witnesses, on behalf of this committee, I want to thank you for your time and your testimony today on this very important study for Canadians.

I will suspend for a couple of minutes to allow our clerk to transition to the second panel of witnesses.

This meeting is suspended to the call of the chair.

[The Chair, Liberal, Peter Schiefke]

I call this meeting back to order.

Colleagues, I'd like to now welcome our witnesses for the second panel today. Appearing as individuals, we have Mr. Edward Webb, lead safety auditor, by video conference. We have Gurpreet Chatwal, chartered professional accountant and tax specialist. We have Amarjot Singh Sahney, former owner-operator and driver.

Welcome to you.

We're going to open up the floor for opening statements, and for that, I will start off with Mr. Webb, who is joining us online.

Mr. Webb, the floor is yours. You have five minutes, sir.

[Edward Webb, Lead Safety Auditor, As an Individual]

Thank you, everybody, for allowing me to talk today. Commercial driver training is a complicated process, and carriers, upon hiring a driver regardless of the classification, feel that if they have a class 1 licence, they are properly trained by a driving school.

Incorporated drivers versus employees, and which is better or worse on the road, is a difficult question from the outside looking in. It's easy to blame incidents on a group of drivers without knowing their backgrounds and safety training, their mentoring with a carrier and what driving school they received their MELT from.

To understand which drivers could or couldn't be safer on the roads, we as an industry need to start at the beginning of the process and find these issues before trying to blame a single group of drivers. I'm hoping some points that I'll be discussing will create a conversation and possibly start a change in the industry, and with other industries to follow.

With the MELT program—I know it's been brought up lots—different provinces have different aspects to their programs. Drivers will look for the easiest one, not the best one, and the cheapest one, not the safest one. Also, if it is a grant or carrier that is paying for that driver, they go to ones the carrier has a connection with. That school may or may not follow the correct guidelines set out by the province. The largest area of concern is training schools' legitimacy across the country.

My concern is inconsistencies in the delivery of MELT around the country. It's a big issue, because there is not standardization.

All schools should have the same program for the training of drivers across the country, and the specialized services—overdimensional, TDG—would need extra training, based on the province and approved by the federal transportation office. The basic structure should be countrywide and have room for specialized and enhanced training.

As I see it, training at the school level is just as important as the drivers once hired by the carrier. That standardization training needs to be similar throughout the country. The national safety code is federal, but provincially run. I feel this area does need some change as well, if not looked upon in more depth.

On safety training platforms, regardless of whether it's an incorporated driver or a company driver, those platforms give a standard training to the driver, if the carrier uses them. Not all carriers use those platforms; they use internal ones. That becomes an issue as well. Standardization of current safety platforms is good, but the usage is not verified. That's something that needs to be looked at, I think.

With analytics being part of our daily lives in the transportation industry, these features in the equipment or through dash cameras and ELDs need to be controlled rather than a feature that can be turned off. This is an area I see that does need some regulatory change and possibly full industry acceptance to operate in the transportation sector regardless of size. This asset-monitoring tech should be used regardless of the size of the carrier.

As we all see, the number and severity of incidents on North American highways is a massive concern. Trying to pin the incident on an incorporated driver versus a company driver is extremely difficult. However, we can look at closer training of these drivers within the companies themselves. This can be done through regulatory audits, insurance audits, standardized national safety code OHS audits. There are different groups, such as third party approved auditors, who can work with MTO or other groups.

For what I do, there's no evidence that different training for incorporated drivers versus employees.... Both should be audited. In most cases, drivers are on their own at home doing these courses, and most likely, someone else is completing them.

Cross-province sharing of information, including CVSA inspections nationwide, incidents on abstracts, a shared template for abstracts, poor drivers, poor owner-operators and poor carriers, all should be part of the changes to the industry.

Proper driver evaluation processes need to be broken and handled by provinces differently based on the type of work that they do.

The education of owners or directors of companies is an area that needs attention. I'm not sure how to start it, but if you own your own transportation business, possibly you should have the same training as your drivers and staff, and not just the CVOR or safety fitness exams. I promote this myself in my work life. I feel it's extremely important to get the upper management to be just as knowledgeable as all the drivers.

Overall, I feel the industry has not adapted to the changes in the driver pool; the mental state of drivers today, especially work-life balance; improper training in the industry; restrictions on carriers and drivers in many different parts of the overall operation of the individual business needs—FAST cards, LMIA/foreign worker program, graduated licences for commercial drivers—insurance companies agreeing to carrier standards; and driver schools being certified and inspected annually.

Transportation is affected by the same issues that affect other industries across Canada and the public at large. I feel that resolution and standardization can create both a more consistent skill set and a level playing field for all drivers.

That's all I had.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Next, we'll turn the floor over to Mr. Chatwal.

Mr. Chatwal, the floor is yours. You have five minutes, sir.

[Gurpreet Chatwal, Chartered Professional Accountant, Tax Specialist , As an Individual]

Thank you.

Good afternoon. My name is Gurpreet Chatwal. I'm a chartered professional accountant specializing in tax. I practise accounting tax and have several clients who are drivers, owner-operators and large and small business owners specializing in the transportation industry.

I appreciate this opportunity to appear before the committee.

I have been following these hearings for some time, and I've noticed a recurring theme that suggests there has been a large-scale revenue loss to Canada Revenue Agency, sometimes described as $1 billion or even $5 billion. As a tax professional who has worked in this field for over 20 years, I can tell you that this proposition is not supported either by the design of our tax system or by the CRA's own position. I'm here today to provide a professional and technical explanation of how the tax system actually works and to clarify that the Canadian Trucking Alliance costing model, which forms the basis of this claim, is methodologically flawed.

Let me start with what the CTA's model claims.

In its public brief, particularly appendix A, the CTA presents a comparison between a payroll employee and an incorporated driver. They say the employee driver earns about $80,500 a year, with about 2,300 hours at $35 per hour. When they add statutory entitlements such as vacation pay, statutory holidays and sick leave, and then layer on the CPP, EI, EHT and WSIB, they come to a total cost of about $102,000. Then they compare that with an incorporated driver scenario in which they assume the carrier's cost is $80,000 and the driver pockets about $10,500 in HST, suggesting a major savings to the carrier and an equivalent loss to the government's revenue.

That analysis might sound persuasive on paper, but it collapses entirely when you apply the actual law in real-world business conditions.

First, the treatment of HST is completely wrong. HST is not income. Every registered supplier under the Excise Tax Act is required to collect and remit HST on taxable supplies. Businesses claim input tax credits on what they pay and remit the balance to CRA. There is no legal or practical way to pocket HST. It's not profit. It's trust money held for the Crown.

Second, the model ignores a $1-million employer health tax exemption, which is critical. Most small and medium-sized carriers fall below this threshold, yet the CTA model applies EHT at the maximum rate to every carrier, big or small, inflating the numbers dramatically.

Third, the model uses the maximum possible contribution rates for WSIB, CPP and EI, as if every worker earns at the ceiling and every firm is rated at the highest premium. That is simply not how the system works. WSIB is experience-rated, CPP is capped and defined at a maximum and, most importantly, EI participation for a self-employed person is voluntary under statute. If someone wants to opt in or out, that is a policy choice, not a case of tax evasion.

When you correct these assumptions to reflect how small and medium-sized businesses actually operate, taking into account the EHT exemption, the WSIB rates and the voluntary EI, the supposed cost gaps narrow sharply. In many cases, once you factor in the contractor premiums that the market already pays, the total cost of using an incorporated driver can be equal to or even exceed that of a payroll employee.

On corrected inputs, the per-driver cost gap falls roughly to only $2,000 to $3,000 compared with the CTA claim of $22,100 per driver. When you scale that across the estimated 120,000 drivers, it declines from the stated $1 billion to only $150 million—approximately a 95% drop. Most of this is only based on deferral rather than tax loss of revenue, and in that model, Ontario EHT and WSIB account for the majority of the variance.

From CRA's perspective, there is no tax loss of revenue. Corporate income remains fully taxable. The Canadian tax integration system ensures that when corporate income is eventually paid out to the individual as dividends, the total combined tax is roughly the same as if it were earned directly as employment income. The only difference is timing—it is a deferral, not tax avoidance.

The CRA enforcement framework possesses robust tools to monitor and address non-compliance, with T2 filings and audits together with personal services business or PSB rules to provide effective oversight. These mechanisms ensure that incorporations used for legitimate commercial purposes remain lawful while misuse is detectable and enforceable through existing channels.

When the CTA claims that there's $1 billion or even $5 billion lost in revenue, it is not describing the tax leak; it is describing a misunderstanding.

The CRA rules are deliberate, coherent and designed to produce a natural result between employment and corporations. The system is working as intended. To suggest otherwise and say that CRA has lost billions is to imply that the agency itself has failed in its duties. There is no evidence of that, and CRA has never made such a statement.

I want to be clear that this is not about supporting or opposing any business model. It is about ensuring that fiscal policy discussions are grounded in fact, law and accurate data.

Thank you for your time. I look forward to answering any technical questions about how taxes and benefits affect the transportation industry.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Chatwal, for your opening remarks.

Next, we'll go to Mr. Singh Sahney.

The floor is yours, and you have five minutes, sir.

[Amarjot Singh Sahney, Former Owner-Operator and Driver, As an Individual]

Thank you, Mr. Chair and members of the committee. Thank you so much for giving me the opportunity to speak today.

My name is Amarjot Singh Sahney. I work as both a driver and an owner-operator. I am here to share the driver perspective, as the Driver Inc. issue is a perspective that has been largely missing from this discussion.

To date, the media and several organizations are painting Driver Inc. as fleet abuse and exploitation towards the newcomer, but the reality is very different. Most newcomer drivers cannot even incorporate when they first arrive in Canada. They are required to work as a payroll employee under a temporary foreign worker or LMIA program in order to obtain permanent residency.

During those two or three years, many workers work under slave-like conditions just to maintain their status and to achieve their PR, which is permanent residency. They are assigned routes that established drivers don't want to take. They spend 36-hour resets on the road away from home. They are often sent to remote provinces that struggle to fill trucking positions, and they have low, fixed salaries. This is simply to secure their permanent residency.

Only after gaining their PR status do many of these drivers incorporate, not to avoid taxes but to finally have control, dignity, freedom and their professional licence. Despite that, Driver Inc. is being blamed for nearly every issue in trucking—safety, compliance and reputation—whenever an incident happens, and immigrant drivers have become national news. These drivers are judged and vilified before anyone has stopped to ask why they choose this model in the first place.

The main reason, in my perspective, is flexibility and family balance. Today's drivers are younger with a family and children. Trucking is a demanding job. Incorporation allows them to create schedules that balance road life with home life. It gives them the ability to plan their work around their personal commitments, family needs and rest time.

The freedom to take extended time off is another major factor. Incorporation allows drivers to take one or two months each year so that they can visit their family abroad, something that payroll jobs rarely permit without risking the driver's position.

Incorporated drivers also value the ability to choose their loads and routes. This independence lets them select situations, circumstances and safety preferences rather than being forced into the routes they do not want.

Finally, incorporation represents an entrepreneurial opportunity to many immigrant drivers who are naturally entrepreneurial. Incorporation gives them a sense of ownership and a chance to follow the same path that many large fleet owners once did, starting from one single truck and building their business from the ground up.

I ask this committee why no one examined the real reason that drivers are incorporating. All incorporated drivers are forced into the model against their will, whether incorporation is allowed or not. Safety issues will continue to remain until the root causes are addressed. The real safety problems, in my perspective, are illegal and improper licensing, the aging and overloaded highways, lack of safety rest areas, and racism and discrimination, which mean that immigrant drivers, once praised as heroes during COVID 19, now face racism, online hate and bias from inspectors and within the industry.

According to me, the solution that I can propose to this committee is strict oversight of the driving schools, investment in the modernization of the national highway infrastructure, development of more safe rest areas for drivers and tackling racism and hatred in trucking.

My closing remarks are that the trucking industry is already facing a severe driver shortage. If you continue to restrict their flexibility and independence, we may risk losing more drivers, leading to shipment delays, high freight costs and high inflation for Canadian consumers.

Thank you so much.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Singh Sahney.

We'll begin our opening questions today with Mr. Lewis for six minutes.

[Chris Lewis, Conservative, Essex, ON]

Thank you so much, Mr. Chair.

Thank you to all of the witnesses here this late afternoon for your excellent testimony.

Mr. Webb, I'd like to start with you, please.

I understand you're the lead safety auditor. That's what I have in my notes here.

[Edward Webb]

Yes.

[Chris Lewis, Conservative, Essex, ON]

Is that for a certain province, a certain location or across the country?

[Edward Webb]

I do audits on trucking companies in Ontario and Alberta.

[Chris Lewis, Conservative, Essex, ON]

Thank you.

Mr. Webb, in my riding of Essex, just last week I learned of a tractor-trailer colliding with a crash truck on Highway 401 eastbound to LaSalle, which is a community in my riding. The semi driver who rammed into the other vehicle was unharmed and charged with careless driving, while the driver of the crash truck, who was working to protect our workers, ended up in hospital. This is just one of many examples of unsafe trucking practices that years of Liberal neglect have allowed to happen through weak enforcement.

As an auditor, could you outline the most common safety deficiencies you've observed among truck drivers during inspections? How have these failures related to compliance with national safety code standards?

[Edward Webb]

The majority of the things I see in the market today is fatigue, so drivers are being pushed. That is probably number one.

The second would be distracted driving. Cellphones are the biggest one, including iPads or whatever objects they have in the cab.

One of the biggest things I've found is that these drivers just don't know; they don't know where they're going. I see that their training, once they get into the carrier, is not significant enough in a lot of cases. What they have to follow is there under the national safety code, but every carrier, including the companies I've worked for, do everything in their power to get the driver in the truck, but we forget, once they're in the truck, the extra training that they need and to document that stuff. That's the stuff we have to work on.

[Chris Lewis, Conservative, Essex, ON]

Thank you.

Sticking with you, Mr. Webb, I've heard from many constituents in my riding who are afraid for their own safety on the roads. One fleet manager in my riding wrote to me saying:

The safety of our community is at risk! Windsor-Essex relies highly on the transportation industry. With the new Gordie Howe Bridge about to open, there is great fear for our industry and the law-abiding companies, citizens, taxpayers, and families our local transportation industry contributes to.

Earlier in the study, we heard from a witness from the Atlantic Provinces Trucking Association that national safety code auditors through the CCMTA should work closely with law enforcement and ESDC auditors to conduct more roadside blitzes and focus on the roadside enforcement of this issue.

Could you speak to how gaps in NSC enforcement are allowing unsafe truck driving methods to remain on our roads?

[Edward Webb]

From what I see, the biggest problems are between the national safety code and the differences in the provinces. We don't share that information. An auditor from Alberta doesn't know what MTO is doing in Ontario. We don't know what is happening in Nova Scotia. That lack of general information going across the provinces becomes an issue.

I'm in agreement. I think more standardization of that information, shared between the provinces and jurisdictions, regardless of whether it's a federal employee, provincial employee or a contractor...all that information should be shared. That also equates to making sure the insurance companies are also sharing their information, because that will give us a better base of what is actually going on.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Webb. I have one final question for you, sir.

In your experience as a safety auditor, do you have any recommendations to this committee on how there can be stronger enforcement of the NSC, or how the NSC standards should be amended to ensure Canadians no longer pay the price on the roads because of unsafe trucking practices?

If you could answer in one minute or less, please, I would appreciate it.

[Edward Webb]

Standardization is going to be the biggest thing. For people like me who go in and look at these carriers, educating the carriers themselves is the biggest problem. As I said in my statements, owners just don't know what they have to follow. We as a country, when somebody starts a trucking company, all we give them is, “Hey, you have to get a CVOR or a safety fitness certificate.” There's no follow-up. There are NCCR audits or ARC audits afterwards, but there's no follow-up with the owners themselves.

In every trucking company that has an issue, it starts at the top and works down. If we can't tackle those owners, we're going to have issues.

[Chris Lewis, Conservative, Essex, ON]

Mr. Singh Sahney, after a decade of failed Liberal policies, Canadian workers in both auto and transport sectors face growing insecurity and cost pressures.

From your perspective, sir, as a driver, how do these vulnerabilities affect the trucking workforce today and what do you foresee for workers if these trends continue?

[Amarjot Singh Sahney]

To be honest, it totally varies from....

I didn't understand the question. Can you please repeat it? I'm sorry for that.

[Chris Lewis, Conservative, Essex, ON]

I'll say it more slowly. I apologize, sir.

[The Chair, Liberal, Peter Schiefke]

I'll make sure you get the time.

[Chris Lewis, Conservative, Essex, ON]

After 10 years of failed policies, Canadian workers in both auto and transport sectors face growing insecurity and cost pressures. From your perspective as a driver, how do these vulnerabilities affect the trucking workforce today and what do you foresee for workers if these trends continue?