Nowhere to Hide
By Stephen Laskowski
Robert Kennedy once said that “every society gets the kind of criminal it deserves. What is equally true is every community gets the kind of law enforcement it insists on.” Kennedy was right. For too long, the trucking industry and the enforcement community have turned a blind eye to cheaters who have run transport businesses based on non-compliance and a disregard for safety and the environment and civic responsibility. Of course, I’m referring to Driver Inc. – a misclassification scheme at best and a dangerous criminal enterprise at worst – which for too long has grown unchecked without recourse and fear of enforcement consequences.
So, five years ago, OTA and CTA developed a plan to wage war against the underbelly of our industry that built their businesses unfairly using Driver Inc. We lobbied every level of government and agency who had jurisdiction and oversight over certain aspects of our industry.
At first, there was mixed reaction to the campaign. Some even thought that Driver Inc. carriers were part of the next contemporary wave of the trucking industry and – like pioneering disrupters in the tech space – were an advanced breed of trucker whose innovative tactics would take over the industry. Except, of course, there’s one major difference. Unlike tech ‘disruptors’ who brought us smart phones and bedroom furniture to our doorstep, Driver Inc companies haven’t conceived anything special, brought consumers value or think outside the box. They just do what bottom feeders have done in every industry since the beginning of time – they break the law, cut corners illegally and manipulate the labour pool to drive down their costs. Granted, they can be clever, as they spent an immense amount of time and resources looking for any conceivable hole in the system to avoid compliance costs and staying a step ahead of regulators. Healthy and fair competition has always been good for the trucking industry – it’s mainly how we’ve become the most efficient and productive for of transportation on earth. Driver Inc. is not healthy or fair competition and must be driven out.
So, what is the plan? It first started by focusing on tax evasion and labour misclassification. OTA began lobbying the WSIB to educate them. Upon investigation, WSIB found the problem so pervasive, it stopped all random audits and began focusing exclusively on Driver Inc audits, which has resulted in about 100 gross violators totalling millions of dollars in fines in a very short time.
Next, ESDC began to review and utilize the WSIB list of noncompliant companies and targeted audit results. ESDC, under the leadership of Minister Hadju and Minister Tassi, always worked with CTA on this file from the start but the challenge was how to target enforcement. By working with the WSIB’s gross violator list, as well their own targeted list, ESDC have launched a targeted labour misclassification/Driver Inc campaign in Ontario. The results of these audits will be a big industry-government discussion point in the fall and winter of 2021.
The next step will be to expand the ESDC enforcement net throughout Ontario and in other regions of Canada, which should also assist Canada Revenue Agency’s impending approach to enforcement. Although CRA has not yet taken a firm stance on a Driver Inc enforcement like ESDC and WSIB have, it is engaged in the issue as a tax avoidance scheme that siphons away more than a billion dollars a year in unpaid taxes. Additionally, we (and CRA) are well aware there’s a link between Driver Inc violators applying for CEWS. How can a company of “contractors” apply for CEWs? CRA has taken an important step of mandating the issuing of T4As in the trucking sector, but it needs to do more in the area of enforcement. If ESDC and WSIB have come to the game in full force, do Driver Inc carriers really think that CRA isn’t close behind?
Driver Inc. carriers aren’t terribly difficult to spot. That’s because cheating is wired in their DNA; So, whether it’s cutting corners or breaking rules on safety, the environment, tax and labour, insurance, all you have to do is follow the pattern of illegal bread crumbs.
On insurance, we worked with the Facility Insurance Association and member truck insurers to uncover significant fraud by many of the Driver Inc violators who grossly misrepresent fleets size, exposure etc. This effort has led IFTA and IRP to ask questions about similar types of fraud being committed.
Next, delete kits. The issue of emission control operation/maintenance and the impact on fuel efficiency are well known in the industry. The compliant industry has delivered improved air quality for Canadians at a great cost. The Driver Inc. contingent has instead invested millions of dollars – not in improving air quality for millions of Canadians and future generations – but instead in high-tech delete kits devices that circumvent control of harmful emissions and illegally pollute Canada’s air. CTA and OTA worked with the various ministries of environment to put an end to this practice; Ontario is leading the way with on-road blitzes of vehicles and garages, while changes to annual inspections (which can’t be bypassed by crooked garages) coming as well. The federal government and various provinces will be examining the issue of delete kits this fall.
Then there’s third-party certified ELDs. Why, you may ask, does Canada mandate third-party certified ELDs, unlike the U.S.? In some ways you can thank Driver Inc companies for that too. You see, since we all know Driver Inc. carriers exhibit patterns of cheating on pretty much every area of their business, we proactively ensured our ELD regime would be prepared. The third-party certification system designed for ELDs will stop cheat devices from entering market, ensuring everyone plays by the same hours of service rules and makes the roads safe for the motoring public. (To learn more about the availability of third party ELDs from the leading ELD vendors in North America please go to the Team Canada section of the CTA website at www.cantruck.ca).
Driver Inc. is the scourge of labour, tax, safety and environmental compliance. These carriers are not a borne out of regulatory ignorance, they are businesses motivated by a growth plan based on noncompliance and the costs associated with compliance. CTA and OTA are firmly committed to ending the various schemes Driver Inc. participate in and we will not stop demanding that Driver Inc carriers receive the full weight of enforcement from all levels of government. Our great and proud industry deserves a business environment that allows the compliant, most innovative and best managed fleets to proposer; not the most relentless cheating companies to thrive. We are the path to achieving this goal. To quote an old sixties song: “Nowhere to run to baby, nowhere to hide.”