TRAN meeting 11 · 2025-10-21 — Committee Evidence — LegisWatch

Summary

This House of Commons committee meeting on the changing landscape of the trucking industry heard from five witnesses: Harman Bhangu, a Member of the Legislative Assembly of British Columbia; Arjun Vishwanth, a policy adviser for the Canada Truck Operators Association; Shelley Spence, the Auditor General of Ontario; Ritesh Kotak, a lawyer and technology analyst; and Blaine Mitton, president of Mitton & Associates Inc.

Harman Bhangu described the "Driver Inc." model as a loophole where carriers pay drivers through their own numbered companies without source deductions for CPP, EI, or workers' compensation, costing millions in lost tax revenue. He argued this exploits vulnerable drivers, especially temporary foreign workers pressured into incorporation, blurs safety accountability, and gives an unfair advantage to non-compliant carriers. He recommended that the committee draw a clear line that full-time drivers under a company's control are employees, enforce penalties with teeth, protect vulnerable workers through education, and level the playing field for law-abiding carriers.

Arjun Vishwanth countered that "Driver Inc." is a false label used by large carriers to destroy competition from small and medium-sized family-run businesses, many owned by South Asian Canadians. He argued that the claimed billion-dollar tax loss is a flawed calculation and that drivers incorporate voluntarily for autonomy over their schedules and finances, not due to coercion. He recommended modernizing the legal test for employee-employer relationships by replacing the ownership of equipment requirement with a test of voluntariness, and urged that safety enforcement remain status-neutral and not conflated with tax audits.

Shelley Spence presented findings from her office's 2019 audit of Ontario's commercial vehicle safety and enforcement, noting that roadside inspections decreased by 22% from 2014 to 2018, and that 56% of carriers had not been inspected in the two years prior. She highlighted that drivers trained and tested by their own employers had a 95% pass rate compared to 69% at public test centres, and that 14% of her 19 recommendations were not implemented by the Ministry of Transportation five years later. She did not make specific asks of the committee but offered her report as relevant to the study.

Ritesh Kotak explained that misclassifying drivers as independent contractors denies them basic protections like EI, CPP, and termination rights, while giving non-compliant carriers a roughly 30% cost advantage. He recommended stronger enforcement and audits of carriers, using technology like pattern recognition and AI-based chatbots to flag potential violators and educate drivers about their rights, while also calling for policy reform to maintain ease of incorporation with safeguards against misuse. He did not directly disagree with other witnesses but emphasized the need for enforcement.

Blaine Mitton estimated that the Driver Inc. model costs Canada $2.25 billion annually in lost taxes and social contributions, and that a compliant carrier faces a $45,000-per-driver cost disadvantage compared to a non-compliant one. He recommended a penalty ladder starting with a 90-day compliance window, escalating fines of $50,000 to $100,000 per vehicle, and eventual suspension of operating authority for repeat offenders, along with quarterly public enforcement reports. He disagreed with Vishwanth's characterization of the issue, arguing that enforcement, not new laws, is the solution.

The committee briefly debated and then postponed a motion from Xavier Barsalou-Duval, amended to request that all witnesses appearing in this study provide a list of their official representatives and contributing members within 15 days, with the debate to resume at a future meeting.

AI-generated summary — may contain errors; verify against the official evidence.

Witnesses · 5

Harman Bhangu

Member of the Legislative Assembly of British Columbia, Jobs and Economic Development Critic, As an Individual

Opening remarks

Thank you, Mr. Chair and members of the committee, for giving me the opportunity to speak today. I want to raise an issue that's doing real damage to our trucking industry and our economy, which is the rise of what’s called “Driver Inc.” On the surface, it sounds like just another business model, but in reality it’s a loophole that’s letting some companies dodge their responsibilities and shift the costs on to workers and taxpayers. Here's how it works. A driver sets up a numbered company. Maybe they once owned a truck. Maybe they don’t anymore. A carrier then hires that driver through their company, but not as an employee. They’ll pay that incorporated driver, say, $30 an hour for 10 hours of work—that's $300 a day—as a business-to-business payment. That's the difference. Because it’s structured that way, there are no source deductions—no CPP, no EI, no workers’ comp and no tax remitted at all. The carrier saves a big chunk of money, and the government loses out on tax revenue that should be collected. This isn’t small change. When hundreds or thousands of drivers are being paid this way, that’s millions in CPP, EI and income tax contributions that never make it to the public…

Full testimony ↗

Arjun Vishwanth

Policy Adviser, Canada Truck Operators Association

Opening remarks

Thank you. Good afternoon, Chair and members of the committee. Thank you for allowing me to be here today. My purpose here is simple. I want to correct a false narrative, set out the facts and offer a constructive set of recommendations. Let me begin with the truth. Driver Inc. is not a legal status. It appears in no statute, no regulation and no court decision. It's a label manufactured and weaponized by lobby groups representing large monopolistic carriers that have lost their competitive edge and that have now chosen to destroy their competition instead of improving their own performance. That competition is made up of small and medium-sized family-run businesses, many by Canadians of South Asian heritage, who built this industry over the last 40 years with their sweat and sacrifice and their treasure. These owners now find themselves branded as cheats, illegals and tax evaders, and they face disproportionate audits, reputational harm and, too often, racial slurs from people, unfortunately, even in positions of authority. Terms such as “flying carpets” and “towel heads” are frequent. This is not enforcement. It's prejudice being asked to translate into policy. There are…

Transport, Infrastructure and Communities

Summary

Witnesses · 5