Thank you, Mr. Chair.
I am very pleased to be here with you to speak to the committee about truck drivers and the measures we are taking to protect them.
I'm here today to talk about the next steps to take to protect truck drivers and tackle worker misclassification.
I'm joined by Sandra Hassan, the deputy minister of labour, Assistant Deputy Minister Brenda Baxter—I believe there are other officials in the room as well—and my colleague, Minister MacKinnon, who will say a few words as well.
Every day, as you all know and as you've been hearing, truck drivers keep our country moving. They deliver the food, fuel and goods Canadians depend on. Some work for companies, while some are independent contractors. The trucking industry and all of these workers are vital to our transportation and our economy.
Some drivers choose this path of independent driving because they value the flexibility it offers. They invest in their equipment, they take on clients and they build their reputation, just like every other small business owner. However, not every independent driver is legitimately a business, as I'm sure you've been hearing. As you've heard from expert testimony, there is a misclassification issue that's been a growing problem in the trucking industry.
I want to be very clear: Misclassification is exploitation. It strips workers of their rights and creates an uneven playing field for the many honest companies that follow the rules. That's why we have been taking increasingly strong action to root out this behaviour.
In 2023, the federal government invested $26.3 million to fight misclassification in the federally regulated road transportation sector. A national employee misclassification team was created, made up of labour standards inspectors dedicated to enforcement in trucking. Since April 2023, the team has focused on high-risk employers suspected of misclassification, drawing from our list of employers with a history of non-compliance, employers provided through our tip line and names provided by stakeholders. So far, the team has initiated over 650 inspections. Of those, 129 found were found to be cases of misclassification.
Today, the government announced that budget 2025 will invest $77 million over four years and $19.2 million annually on an ongoing basis for the Canada Revenue Agency to implement a strong compliance program that addresses non-compliance issues related to personal services businesses. The budget will also lift the moratorium on reporting fees for services, also known as T4As. This moratorium was put in place in 2011, ostensibly to cut red tape, but it's allowed the growing practice of misclassification. The budget would also propose allowing the Canada Revenue Agency to share information, including audit results, with the ESDC for the purpose of administering and enforcing the Canada Labour Code as it relates to the classification of workers.
These measures will make sure that drivers and the companies that hire them comply with tax and labour code regulations. When misclassification is suspected, we will investigate and enforce the law.
Roughly 80% of the employers found to be non-compliant have since agreed to properly classify their drivers. Employees who misclassify have been facing escalating enforcement measures and administrative monetary penalties. In June 2024, further amendments to the Canada Labour Code strengthened the ban on misclassification. These changes made it increasingly clear that it is illegal to misclassify workers, and all workers are presumed to be employees unless an employee can prove otherwise. In other words, the burden of proof now lies with the employer.
We're also taking enforcement right to the highways. The team is partnering with provinces to meet drivers at weigh stations to explain their rights and identify employers breaking the law. Recent joint operations with the Canada Revenue Agency, worker compensation boards and provincial transportation agencies, including those of Quebec, Ontario, Alberta and British Columbia, are strengthening enforcement and outreach all across the country, and more operations are on the way.
To strengthen compliance even further, the labour program will launch a major inspection blitz in the greater Toronto and Hamilton areas this fall to address misclassification. I've asked my officials to fast-track enforcement measures and swiftly issue penalties when violations are found, and I've directed the department to increase the administrative monetary penalties regime to send an even stronger message.
This includes reviewing the public naming of employers who break the law, because transparency drives accountability. That work is commencing immediately.
In addition, since April 2024, the government has issued over 750 payment orders to employers totalling over $4.1 million in unpaid wages and other amounts owed to employees. That's money that belongs in the wallets of working people. Too often it is vulnerable workers who are hit the hardest. Many of them are newcomers to Canada who have trusted that the system will protect them.
I'd also like to talk about another serious issue, the abuse of temporary foreign workers in the trucking sector. The temporary foreign worker program is meant to fill critical employment gaps temporarily as a last resort and only when qualified Canadians and permanent residents are not available. Employers must demonstrate their efforts to recruit within Canada. Misclassification of workers and the use of Driver Inc. arrangements are prohibited under the temporary foreign worker program, and that means that labour market impact assessments cannot be granted to foreign workers who are applying as independent contractors. Under the program, workers must be employees of the trucking company with the same wages and benefits as other drivers. The government continues to oversee and enforce temporary foreign worker protection and ensure compliance in key sectors, like trucking.
I believe, as I think everyone in this room does, that workers in Canada deserve to have their rights protected. I want to be very clear. When non-compliance is found, we will take action, including any abuses linked to the Driver Inc. model.
Thank you.
