Unscrupulous Driver Inc. companies that cheat on taxes and manipulate workers are expanding their presence in Atlantic Canada, warned Chris McKee, executive director of the Atlantic Provinces Trucking Association (APTA).
This business model, “is not good for our industry, illegal, not a level playing field, and detrimental to carriers that go by the book,” he said during APTA’s conference in Charlottetown on Oct. 19.
Trucknews.com reports how McKee explained how the practice is growing in eastern Canada.
Trevor Bent, APTA’s past chairman said it is increasingly important to squash the practice to maintain a competitive balance within the marketplace. He added that carriers that have been in business for decades are going to have to make tough decisions.
, “The practice of creating corporations to skirt your responsibilities – payroll, tax remittances – is not lending to an overall healthy environment within the trucking industry nor is it lending to a positive sustainable one socially.”
Bent noted that Nova Scotia welcomed 12,000 new residents in the last three months. He said this puts pressure on the health system, infrastructure, roads and schools. “It’s moving beyond a trucking issue, it is now a social issue,” he warned.
Geoffrey Wood, senior vice-president, policy, Canadian Trucking Alliance said the Canada Revenue Agency and Employment and Social Development Canada (ESDC) are doing some work but more needs to be done.
Meanwhile, carriers in the Atlantic provinces are reporting other headwinds affecting businesses, including lower freight volumes and the driver shortage, but they say they’re confident they will ride out the current challenges.
“Members are getting creative as to how they retain drivers during this period, they know things will eventually come back up,” said McKee.
Volumes are down, capacity up, rates depressed, and equipment costs are going upward next year another 10 to 15%,” Bent added.
“Now it’s a waiting game to see how that flushes out. How many folks can stay in it long enough in a survival environment. Rates are getting pounded, there is a recessionary feel to the economic landscape today.”
Adding to the pain is the new 10 sick days requirement for federally regulated fleets, forcing some to hire additional drivers to fill in the gaps, increasing costs.
“We are behind on equipment repairs and there are delays,” Bent said, adding to overtime costs. He said it is harder to recruit people in the trades and it puts pressure on those who are working. “It is a challenge for retention and increases burnout.”
But this issue also has a silver lining. Aligning with other sectors that compete for workers on labor issues like sick days, makes the trucking industry more competitive, Bent said.
He added that the industry is nimble and will adapt to the situation. “We can show that we are taking care of our people, making it attractive to new workers.”