Thank you.
Chair and members of the committee, thank you for the opportunity to appear today.
My name is Michael Ludwig. I operate a family-run trucking company based in Simcoe, Ontario, which has been in operation since 1961. We operate dry vans, refrigerated equipment and intermodal containers throughout North America. We have survived multiple industry cycles by focusing on compliance, safety and long-term sustainability.
I am here today not as a representative of any association or as a theorist, but as an operator living with the real-world consequences of what is commonly referred to as Driver Inc.
I have provided the committee with a written submission outlining evidence, impacts and recommendations. Today I want to focus on what this looks like from the operator's seat.
In plain language, Driver Inc. is not self-employment: It is the misclassification of employees as independent contractors in order to avoid payroll taxes and basic employment protections. Drivers labelled as independent do not control their rates, customers or working conditions, yet they are made responsible for compliance, risk and long-term financial security without real entrepreneurial risk or genuine independence.
What is occurring is payroll fraud that has become normalized across large portions of the trucking industry.
Driver Inc. did not emerge because carriers are inherently malicious; it emerged because trucking operates on extremely thin margins. Enforcement is fragmented, and price—not compliance—has become the dominant factor in shipper decision-making. When enforcement is inconsistent and the market rewards the lowest price, regardless of how it is achieved, non-compliance becomes a competitive advantage. This creates a system in which compliant carriers are punished while non-compliant ones are rewarded.
The damage from this model falls into four main areas.
The first is legitimate carriers. Over the last 42 months, in one of the worst and longest downturns this industry has experienced, either compliant carriers have exited the market or they are now seriously considering the adoption of Driver Inc. simply to survive. This pressure is structural, not moral.
The second is the drivers. Drivers operating under Driver Inc. are often led to believe they are earning more, but they are trading away CPP, EI, workers' compensation coverage and long-term financial security. They are one injury, one enforcement action or one economic downturn away from collapse.
Third is government. CPP and EI contributions are lost. Income tax revenue is deferred or never collected. When reassessments finally occur, the money is often gone, usually out of the country, and the companies no longer exist.
The fourth is safety. When responsibility is fragmented, accountability weakens. Hours-of-service violations become easier to hide, maintenance is deferred and equipment standards slip. When everyone is labelled as independent, it becomes unclear who is ultimately responsible for safety outcomes on Canadian roads.
Enforcement has not kept pace with the scale of the problem. CRA action is largely reactive and often occurs after the damage is done.
The most troubling part of this reality is that I am sitting here today before lawmakers describing a system that can push otherwise compliant carriers toward illegality simply to survive.
More guidance documents or voluntary compliance initiatives will not solve the issue. Drivers are not in a position to challenge the structure they are placed in, and carriers will not police themselves. Compliant operators cannot survive in a system in which enforcement is optional. What would make a difference is predictable, early and coordinated enforcement, meaning joint action from the CRA, labour authorities and transportation regulators, with real consequences for deliberate misclassification and with accountability that reaches those who knowingly benefit from non-compliant pricing.
This is not about eliminating legitimate owner-operators. Genuine independent contractors exist and should continue to exist. This is about ensuring that independence is real and not fictional.
Driver Inc. is no longer a loophole at the margins of the industry. It is rapidly becoming the dominant operating model. If nothing changes, Canada risks losing its compliant trucking industry entirely. Once that capacity is gone, it will not be easy to rebuild.
Thank you. I look forward to your questions.