TRAN Committee briefing binder: Appearance by the Deputy Minister of Labour and Associate Deputy Minister of Employment and Social Development - October 30, 2025

Overview

• On September 18, 2025, the Standing Committee on Transport, Infrastructure and Communities (TRAN) passed a motion to "immediately undertake a new study on the phenomenon of 'Driver Inc.', comprising at least 6 meetings. The committee will invite the Minister of Transport, the Secretary of State for Labour, and the Secretary of State for Revenue to testify in this study for a minimum of one hour each. Other witnesses, chosen by the parties, will also be invited to appear".
• Through discussion with the committee clerk, it was agreed that the Minister of Jobs and Families would appear instead of the Secretary of State (Labour). The Minister of Transport will also appear on the same panel. Following the one-hour appearance, the committee also invited the Deputy Minister of Labour and Associate Deputy Minister of Employment and Social Development, along with officials from ESDC/Labour and Transport to remain for the second hour of the meeting. Representatives of the CRA will appear on November 6, 2025.

Committee proceedings

• The first round of questions will give six minutes each to the CPC, LPC and BQ, in that order.
• The second (and subsequent rounds) of questions allocate 5 minutes to the CPC and LPC, 2 and a half minutes to the BQ, and then 5 minutes to the CPC and the LPC.
• For the second hour, officials in attendance to support you will be:
  • Gary Robertson, Senior Assistant Deputy Minister, Policy, Dispute Resolution and International Affairs
  • Brenda Baxter, Assistant Deputy Minister, Compliance, Operations and Program Development
  • Michael MacPhee, Assistant Deputy Minister, Temporary Foreign Worker Program

Parliamentary Environment

The Committee has heard from witnesses from industry associations, law enforcement, training associations, transportation companies, labour unions, a provincial MLA (BC) and the Auditor General of Ontario.

Conservative Party of Canada

• CPC members raised the following with stakeholders, related to Drivers Inc.:
  • lack of enforcement and coordination by federal government and agencies (labour, tax and immigration laws) and a need for the government to begin auditing carriers
  • immigration fraud and Temporary Foreign Worker Program
  • impact on local jobs given the transition of drivers from legitimate carriers to the Drivers Inc. model
  • training and safety risks due to undermining provincial licencing standards (no employer oversight for hours of service, training, driver fatigue etc.), and
  • moratorium on T4-As allowing bad actors to avoid a paper trail.
• Dan Muys, TRAN member, added Q-506 to the Notice Paper, seeking the number of audits and investigations conducted by government institutions, how many drivers have been identified as being misclassified as independent contractors under the "Driver Inc." model; details on findings (such as Temporary Foreign Workers), what penalties, fines or monetary recoveries have resulted from the investigations, and what memoranda of understanding, joint task forces or interdepartmental agreements currently exist between the departments or agencies to coordinate enforcement related to the "Driver Inc." model. The response to this question will be tabled the week of December 8, 2025.
• Other items CPC MPs have noted previously:
  • the Hon. Pierre Poilievre, Leader of the Conservative Party of Canada and the Official Opposition, and the Hon. Michelle Rempel Garner, Shadow Minister for Immigration, have announced a plan to tackle unemployment by permanently scrapping the TFW program and immediately ending new permits.

Bloc Québécois

• This study was proposed by TRAN BQ member Xavier Barsalou-Duval (Pierre-Boucher—Les Patriotes—Verchères), indicating that he had written to Minister MacKinnon on the topic of Drivers Inc., and discussed Employment Insurance (misclassified truck drivers would not have access) as one of many reasons to invite the Secretary of State (Labour).
• Relating to this study, the BQ published a 10-point plan to improve the security and industry of the trucking industry.
• During Question Period, as recently as October 10, BQ MPs discussed the dangers to public safety due to the Drivers Inc. model.

Peter Schiefke (Liberal) (Vaudreuil - Soulanges, Québec)

Chair of the Committee

MP Peter Schiefke was first elected as a Member of Parliament by the citizens of Vaudreuil-Soulanges in October 2015. Shortly thereafter he was appointed as the Parliamentary Secretary for Youth by Prime Minister Trudeau and in 2018 was given the additional responsibilities of Parliamentary Secretary to the Minister of Border Security and Organized Crime Reduction. In 2019, MP Schiefke was re-elected and was shortly thereafter appointed as the Parliamentary Secretary to the Minister of the Environment and Climate Change. In March 2021, Prime Minister Justin Trudeau asked him to take on the role of Parliamentary Secretary to the Minister of Immigration, Refugees and Citizenship.

Prior to entering politics, MP Schiefke worked in numerous capacities lending his expertise in sustainable development to both domestic and international causes. His passion for positive social change inspired his work as the Director and Co-Founder of Youth Action Canada, the CEED Program based in Uganda, East Africa and his work as the National Director of Climate Reality Canada, an organization founded by former US Vice-President and Nobel Laureate Al Gore. For his work he has been awarded a Federal Minister's Commendation, the YMCA Peace Prize and the Forces Avenir Award for Peace Justice and Humanitarian Aid.

MP Schiefke holds a Bachelor of Arts in Political Science from Concordia University as well as a Master of Science in Renewable Resources from McGill University.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities
• Standing Committee on Natural Resources

Issues raised relating to the Transport Canada portfolio:

• investments by railway companies in local communities
• investments in public transit
• deployment of zero-emission vehicles

Mike Kelloway (Liberal) (Sydney - Glace Bay, Nova Scotia)

Parliamentary Secretary to the Minister of Transport and Internal Trade

Parliamentary Secretary Kelloway grew up in Glace Bay and pursued a Bachelor of Community Studies at Cape Breton University. He furthered his studies by completing his graduate studies in Education from the University of Calgary.

Before entering federal politics, PS Kelloway has worked as a youth worker and entrepreneur to College lecturer, from the extension department at Cape Breton University to his previous position as a special project administrator at the Nova Scotia Community College. His titles have included Dean of Flexible Learning, Senior Manager of Customized Learning and Entrepreneurship, and most recently, Community Innovation Lead for Cape Breton and North Eastern NS.

MP Kelloway was first elected as the MP for Cape Breton - Canso during the 2019 federal election. Since winning election, MP Kelloway has served in multiple roles, including as Parliamentary Secretary to the Minister of Fisheries and Oceans. He has also been a member of the Standing Committees on (1) Fisheries and Oceans, (2) Science and Research, and (3) the Scrutiny of Regulations.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• more efficient ports
• stronger supply chains
• impact of marine pollution on maritime mammals and ecosystems
• Oceans Protection Plan

Will Greaves (Liberal) (Victoria, British Columbia)

MP Will Greaves was first elected during the 2025 general election, and has been appointed as a member of the Standing Committee on Transport, Infrastructure and Communities.

MP Greaves has a Bachelor of Arts (Honours) from Bishop's University, a Masters of Arts in Political Science from the University of Calgary and a PhD in International Relations and Canadian Politics from the University of Toronto.

Prior to his entry into politics, MP Greaves was an associate professor of political science at the University of Victoria. His research focused on climate change, security, and Arctic geopolitics. MP Greaves has authored and published articles, book chapters and books on the above-noted subjects.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• environmental protection
• importance of Indigenous reconciliation

Chi Nguyen (Liberal) (Spadina - Harbourfront, Ontario)

MP Chi Nguyen was first elected during the 2025 general election and has been appointed as member of the Standing Committee on Transport, Infrastructure and Communities.

MP Nguyen has a Bachelor of Arts in Sociology from the University of Toronto and a Master of Science in Social Psychology from the London School of Economics.

Prior to entering politics, MP Nguyen served as the Executive Director at Equal Voice, a charity focused on improving gender representation in Canadian politics. She has also worked with various organizations such as United Way and White Ribbon Canada.

Throughout her career, she has advocated for causes such as social justice, gender equality, community empowerment, affordability, and the rights of women and vulnerable communities.

Member of the following Committee(s):

• Standing Committee on Transportation, Infrastructure and Communitie

Issues raised relating to the Transport Canada portfolio:

• accessible transportation
• climate-smart transit

Stéphane Lauzon (Liberal) (Argenteuil - La Petite-Nation, Québec)

MP Stéphane Lauzon was first elected to the House of Commons in 2015 representing the electoral distrct of Argenteuil - La Petite-Nation and was re-elected in 2019 and 2021.

As a Member of Parliament, he currently serves as the Parliamentary Secretary to the Minister of Citizens' Services. He previously served as Parliamentary Secretary to several different Ministers, including the Minister of Rural Economic Development and the Minister of Veterans Affairs. In addition, he has also served as a member of several parliamentary associations and interparliamentary groups, including the Canada-France Inter-Parliamentary Association and the Canada-United States Inter-Parliamentary Group.

Prior to entering federal politics, MP Lauzon worked in vocational training and owned a construction management company. In 2009, he was elected to the city council of Gatineau and chaired the municipal committee on sports and recreational matters.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• rural connectivity
• emissions produced by maritime vessels
• impacts of climate change on the transportation sector

Dan Albas (Conservative) (Okanagan Lake West - South Kelowna, British Columbia)

Vice-Chair and CPC Critic for Transport

Throughout his life, MP Dan Albas has lived in British Columbia, Yukon and Alberta. Since 1981, MP Albas has lived in Penticton, British Columbia. MP Albas attended Penticton Secondary School and Okanagan University College.

Prior to his entry into federal politics, MP Albas worked as a martial art instructor, eventually opening his own martial arts studio. As a small business owner, MP Albas has worked with the provincial and regional branches of the Chamber of Commerce. In 2008, MP Albas entered municipal politics and won a seat on the Penticton City Council. Of note, during his tenure as a city councilor, MP Albas iterated his belief that public transit should be funded through user fees. In this context, he voted against the procurement of new buses for BC Transit unless these were funded through higher fares and voted to raise fares by 25% to fund operational costs.

Following the retirement of Okanagan - Coquihalla MP Stockwell Day, MP Albas won the Conservative Party nomination and was subsequently elected to the House of Commons. Since the 41^st Parliament (2011 to 2015), MP Albas has served on several committees, including on the Transport, Infrastructure and Communities (TRAN) from 2011 to 2012. Since the 42^nd Parliament (2015 to 2019), MP Albas has served in several critic roles, including most recently as critic for Environment and Climate Change, from 2020 to 2025.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• supports financing transportation services through user fees
• management of the Port of Vancouver
• supports electric vehicles

Philip Lawrence (Conservative) (Northumberland – Peterborough South, Ontario)

MP Philip Lawrence was first elected to the House of Commons in 2019 representing the electoral district of Northumberland-Peterborough South and was re-elected in 2021. He was appointed as the Shadow Minister for Transport in September 2024 and has previously served as the Shadow Minister for National Revenue.

As a Member of Parliament, he has served as a member of several committees, including the Standing Committee on Public Accounts and the Standing Committee on Finance. He has also served as a member on several parliamentary associations and interparliamentary groups, including the Canada NATO Parliamentary Association and the Canada-Israel Interparliamentary Group.

Prior to entering federal politics, MP Lawrence obtained a Law degree from Osgoode Hall Law School and an MBA from the Schulich School of Business, spending over a decade as a practicing lawyer and financial planner.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities (Vice-Chair)
• Subcommittee on Agenda and Procedure of the Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• effects of the carbon tax on rural communities
• effects of transportation on the tourism industry
• port authorities
• transportation connectivity for rural communities

Leslyn Lewis (Conservative) (Haldimand-Norfolk, Ontario)

Conservative Critic for Infrastructure and Communities

MP Leslyn Lewis is a Canadian lawyer who has served as the member of Parliament for Haldimand-Norfolk since 2021. MP Lewis contested the Conservative party leadership in 2020, placing third.

MP Lewis has a Bachelor's Degree from the University of Toronto, Trinity College graduating Magna Cum Laude; a Master's in Environmental Studies from York University with a concentration in Business and Environment from the Schulich School of Business; a Juris Doctorate from Osgoode Hall Law School; and a PhD in Law from Osgoode Hall Law School.

Before seeking office as a Member of Parliament, she was a business owner, having left a practice of law on Bay Street to start her own law firm.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• air passenger protections
• travel delays and the treatment of air and rail passengers

Dan Muys (Conservative) (Flamborough - Glanbrook-Brant North, ON)

Conservative Associate Critic for Transport

MP Dan Muys was first elected as the MP for Flamborough-Glanbrook in September 2021. He is currently associate critic for Transport.

Prior to seeking office, MP Muys worked in the private sector, specifically in the energy and agri-food sectors.

In a personal capacity, MP Muys is a member of the Rotary Club, the Flamborough Chamber of Commerce and the Copetown United Church. He has also served in the National Governance Committee of the Canadian Public Relations Society in a number of capacities.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• relationship between municipalities and railway companies
• fatigue management in the rail sector
• supply chain resiliency
• short-sea marine shipping
• price competitiveness in the air sector for secondary airports

Xavier Barsalou Duval (Bloc-Québécois) (Pierre-Boucher - Les Patriotes - Verchères, Québec)

Bloc Critic for Transport, Infrastructure and Communities

MP Xavier Barsalou Duval was first elected to the House of Commons on October 19, 2015 and re-elected in 2019 and 2021. He has a Master's in Business Administration (MBA) and a Bachelor's Degree in accounting.

Prior to his political career, he taught accounting at the college level and worked several years as an accounting auditor. MP Barsalou Duval has been highly implicated in his local Bloc Québecois and Parti Québecois riding associations since he was eighteen years old. He thereafter became President of the Forum Jeunesse of the Bloc Québecois, a position he held from 2012 to 2015. In his career, he has also been very active in the Mouvement Montréal français and in the Société Saint-Jean-Baptiste de Montréal.

During the 42^nd Parliament, MP Barsalou Duval was the critic for the Economic Development, Government Operations, National Revenue and Public Accounts. He has been the parliamentary critic for the transport, infrastructure and communities portfolio since the opening of the 43^rd Parliament in 2019.

Member of the following Committee(s):

• Standing Committee on Transport, Infrastructure and Communities

Issues raised relating to the Transport Canada portfolio:

• delays at airports
• Lac-Mégantic rail bypass
• high frequency rail
• viability of regional air transportation
• interline agreements (air transportation)
• Air Passenger Protection Regulations
• importance of official languages in the transportation sector
• Shoreline Protection Program
• electrification of the transportation sector

Issue

Addressing employee misclassification in the road transportation industry and protecting federally regulated workers under the Canada Labour Code.

Background

• Employee misclassification has been a long-standing issue for key stakeholders in the trucking sector, including the Canadian Trucking Alliance (CTA), which have lobbied for stronger enforcement of labour, safety and taxation rules that they allege are being flouted by enterprises using the "Driver Inc." business model.
• From a Labour Program perspective, a number of measures have been taken to ensure that gig and misclassified workers have access to job protections under the Canada Labour Code (Code) through legislative changes, increased collaboration between government organizations and enhanced compliance and enforcement efforts.
• On October 6, 2025, MP Xavier Barsalou-Duval, the Bloc Québécois transportation spokesperson, alongside trucking industry representatives and advocacy groups, held a press conference and issued 10 recommendations to the federal government to address concerns in the trucking industry. These demands focus on improving road safety and tackling the illegal practices often associated with the Drivers Inc. model.
• Various stakeholders were invited to appear before the House Standing Committee on Transport, Infrastructure and Communities (TRAN) as part of the committee's study on 'Changing Landscape of Truck Drivers in Canada.'
• As of October 17, 2025, 15 stakeholders — including the CTA, Teamsters, trucking federations, police and enforcement bodies, owners of truck driver training schools as well as individual participants — have appeared before the Committee.
• In addition, the Committee has received 4 written submissions expressing concerns associated with the Driver Inc. model. Stakeholders raised common themes such as the economic impact of Drivers Inc. on their organizations, labour rights, road safety and tax evasion. The submissions were received from:
  • Canadian Trucking Alliance
  • Women's Trucking Federation of Canada
  • Truck Training Schools Association of Ontario
  • Fraternité des constables du contrôle routier du Québec

Employee misclassification

• Misclassification occurs when workers are wrongfully - and often intentionally - classified as independent contractors and denied basic employee rights, protections and entitlements.
• In the road transport industry, this often manifests as the model referred to as "Driver Inc." When truck drivers are treated as self-employed independent contractors, they may lose most job protections, including:
  • union and collective bargaining rights
  • occupational health and safety protections
  • minimum labour standards, such as minimum wage, paid medical leave, overtime pay, vacation pay, paid general holidays, and
  • other employment related benefits, such as Employment Insurance
• Misclassification also creates unfair competition, undercutting businesses that comply with the Code and provide related employment benefits.
• Provisions for combatting employee misclassification were first added to the Code in 2021, when it became prohibited for employers to treat an employee as if they were not their employee in order to avoid their obligations under Part III (Labour Standards) of the Code or to deprive the employee of labour standards rights.
• A pilot project in the trucking sector was launched in 2021 to 2022 in the Ontario Region aimed to support the new misclassification provisions. It uncovered widespread misclassification in the road transportation industry.
• Subsequently, the 2022 Fall Economic Statement committed $26.3 million over 5 years to the Labour Program to amplify enforcement and compliance activities needed to combat employee misclassification in the federally regulated road transportation industry. Since then, the Labour Program has established a dedicated team that conducts inspections of workplaces where employers are suspected of misclassifying employees.
• Since April 2023, the Labour Program has initiated over 650 inspections and found 129 cases of misclassification. The focus has been on high-risk employers suspected of misclassification - drawing from the Department's list of employers with a history of non-compliance, employers provided through a tip line and names provided by stakeholders.
• The team has successfully obtained voluntary agreement from more than 80% of employers inspected to properly treat their drivers as employees and comply with the Code. Employers who did not cooperate with a labour standards inspection or did not come into compliance, have been subject to legally binding Compliance Orders (CO) and Administrative Monetary Penalties (AMPs).
• Further amendments to strengthen the existing misclassification prohibition and ensure federally regulated gig workers have access to rights, protections and entitlements under the Code were introduced in the Budget Implementation Act, 2024, No. 1, and came into force upon Royal Assent in June 2024. These amendments:
  • introduced a presumption that all workers, including gig workers, are considered employees. If the employer-employee relationship is contested, the burden of proof lies with the employer to disprove employee status
  • added a prohibition against the misclassification of employees and shifted the burden of proof on employers who challenge a worker's employee status under Part I (Industrial Relations) and Part II (Occupational Health and Safety) of the Code, and
  • expanded the scope of the prohibition against misclassification under Part III of the Code – any misclassification is prohibited, even if this was not done with the specific intention of depriving employees of their rights
• These amendments to the Code aim to address employee misclassification so that employees within federal jurisdictions can avail themselves of their statutory rights and protections. Workers who are true independent contractors are not affected by these amendments.
• In addition, to bolster compliance and enforcement against misclassification, Budget 2024 also announced that Employment and Social Development Canada and the Canada Revenue Agency (CRA) would enter into data-sharing agreements.
• An Information Sharing Agreement (ISA) between the Labour Program and the CRA has been in place since March 2025. This ISA has enabled the Labour Program to share information with the CRA, such as the name, business number and address of employers alleged or found to be misclassifying employees since April 2025.

Temporary Foreign Worker Program

• There have also been concerns raised in media and by stakeholders alleging abuse of the Temporary Foreign Worker (TFW) Program linked to the Driver Inc model. However, all work permits issued via the TFW Program are employer-specific, meaning that for a temporary foreign worker to receive a work permit under the TFW Program, there needs to be an employer identified who recruits, hires and pays the worker.
• The Immigration and Refugee Protection Regulations do not permit the granting of a Labour Market Impact Assessment (LMIA) to foreign nationals or temporary foreign workers as applicants. LMIAs are only available to employers in Canada. As such, a temporary foreign worker would not be allowed to incorporate (self-employed) to work as a truck driver for a company that receives a positive LMIA. Under an LMIA, the temporary foreign worker must be an employee of the trucking company (on the company's payroll) and hired with the same conditions, including same wages and benefits, as other truck drivers working for that company. Incorporating as an owner operator would contravene the conditions of an LMIA and would be grounds for non-compliance and penalties with the Program.
• In 2024, there were 8,101 LMIA positions approved via the TFW Program for transport truck driver positions (NOC 73300), and 3,526 approved positions year-to-date in 2025 (January to September). While in Canada, temporary foreign workers have the same workplace rights and protections as Canadians and permanent residents. Mistreatment of temporary foreign workers - or any worker - is unacceptable. The TFW Program has tools in place to protect temporary foreign workers, including a compliance regime that verifies that employers are meeting program requirements.
• The Labour Program and the TFW Program Branch (TFWPB) have signed a Memorandum of Understanding (MOU) to share data between the 2 programs. This MOU will help address issues of non-compliance and better target enforcement activities, including in the road transportation industry. Under this agreement, the Labour Program and the TFWPB will share client and business information of employers and businesses interacting with either program, as well as information about complaints and investigations, particularly related to employers who are found to have violated relevant legislation and regulations and/or who have a high number of pending complaints.

Key facts

• The road transportation industry has more than 8,000 federally regulated employers and 260,000 employees. According to Labour Force Survey data, there are approximately 31,800 incorporated self-employed truck drivers without employees in the federally regulated road transportation industry.
• Since its inception in April 2023. The Labour Program's National Misclassification Team has undertaken over 650 inspections and more than 400 education activities with carriers in the federally regulated road transportation sector.
• The Misclassification Team has successfully obtained voluntary agreement from more than 80% of employers inspected, and found not to be complying with the rules, who have since agreed to properly classify their drivers as employees. Employers who did not cooperate with a labour standards inspection or did not come into compliance, have been subject to legally binding Compliance Orders (CO) and Administrative Monetary Penalties (AMPs).
• The Labour Program has so far issued 30 Compliance Orders and 22 AMPs following proactive efforts to address misclassification in the trucking industry.
• The Misclassification Team also collaborates with federal and provincial partner agencies to raise awareness about misclassification among truck drivers at commercial motor vehicle inspection stations (weigh stations) across Canada. Since late 2024, inspectors have engaged in joint operations at weigh stations in Quebec, Ontario, Nova Scotia, British Columbia, Alberta, Saskatchewan and Manitoba to educate drivers about misclassification and their rights under the Code, as well to gather information on employers who may be misclassifying drivers.
• These outreach activities are often undertaken in partnership with federal departments, such as the Canada Revenue Agency (CRA), and provincial regulatory agencies including worker compensation boards.

Key messages

• The Government is committed to upholding labour protections.
• Addressing employee misclassification is a key priority, especially where truck drivers are wrongly classified as independent contractors, denying them protections under the Code and social benefits like EI and CPP/QPP.
• Based on robust stakeholder engagement, the Government brought forward amendments to the Canada Labour Code in 2024 to strengthen the prohibition against employee misclassification. As such, all workers, including gig workers, are presumed to be employees unless proven otherwise. These amendments better protect workers in federally regulated sectors, but do not affect true independent contractors.
• Since the inception of the dedicated Misclassification Team in April 2023 the Labour Program has initiated over 650 inspections and 400 outreach educational sessions including at weigh stations across the country in partnership with provinces and other regulatory bodies to promote compliance and understanding among drivers and federally regulated employers.
• The Labour Program's collaboration with the Canada Revenue Agency and with the Temporary Foreign Worker Program through information sharing arrangements will further strengthen enforcement efforts against misclassification and violations of other legal frameworks.

If Pressed (about investments from the Government of Canada to address misclassification)

• In the 2022 Fall Economic Statement, the former Government took measures to address misclassification and potential non-compliance in the federally regulated road transportation industry by announcing $26.3 million over 5 years, starting in 2023 to 2024.
• The Labour Program is using this funding for a dedicated team of labour standards inspectors to focus on addressing misclassification across Canada. This includes proactive measures, such as outreach, awareness, communications, as well as undertaking compliance and enforcement actions to enforce the provisions of the Code.
• The Labour Program continues to expand partnerships with federal and provincial regulatory agencies to address misclassification.
• Labour inspectors have worked with provincial counterparts at weigh scales in Quebec, Ontario, Nova Scotia, British Columbia, Alberta and Saskatchewan, educating drivers on their rights and uncovering leads on possible misclassification. The CRA has also taken part in joint operations with our provincial partners since Summer 2025.

If Pressed (About Government Action or Enforcement)

• Employers who misclassify employees and deprive them of their rights and benefits are in contravention of the Code and may be subject to various enforcement measures, such as administrative monetary penalties (AMPs), compliance orders, and payment orders for wages and other amounts owed to their employees.
• Since April 2024, the Labour Program has also issued over 750 payment orders to employers totalling over $4.1 million for unpaid wages and other amounts in the road transportation sector.
• The Labour Program has issued 22 AMPs related to efforts to address misclassification in the trucking industry, as well as 30 compliance orders.
• To date, the Labour Program has published the names of 2 employers found to be non-compliant with misclassification provisions of the Code. More naming of non-compliant employers is expected, as the Labour Program is examining ways of increasing the issuance of AMPs and the public naming of bad actors, as part of a robust review of the AMPs regime.

Background Q and As

Q1. What is employee misclassification?

A1. Misclassification occurs when an employer wrongfully classifies an employee as an independent contractor, which deprives them of rights and protections under the Canada Labour Code (the Code) such as minimum wage, overtime pay, vacation and general holiday pay.

In addition, those who are misclassified are often denied entitlements such as Workers Compensation, Employment Insurance and Canada Pension Plan benefits.

On January 1, 2021, the Code was amended to add a provision (section 167.1) prohibiting employers from intentionally misclassifying employees to deprive them of their labour standards rights. In 2024, the Code was further amended to strengthen the prohibition on misclassification. The amendments introduced a presumption that all workers, including gig workers, who are remunerated are employees unless proven otherwise, placing the burden of proof on employers.

Q2. What is the incorporated driver "Driver Inc." business model?

A2. Under this business model, workers employed as truck drivers register as an incorporated entity and offer their driving services as independent contractors to road transport carriers.

While there are truck drivers who are legitimate independent contractors, the Labour Program is finding that in the majority of cases these workers are in fact employees being misclassified: they are driving the transport carriers' truck and exercise little to no control over their work schedule.

Q3. How prevalent is the "Driver Inc." model?

A3. The road transportation sector is comprised of more than 8,000 federally regulated employers and 260,000 employees. According to Labour Force Survey data, there are approximately 31,800 incorporated self-employed truck drivers.

More than half of all unassigned labour standards (Part III) complaints received by the Labour Program are from the road transportation sector and mainly from truck drivers. Based on historical data and trends, the majority of the truck drivers who submitted complaints to the Labour Program are misclassified drivers.

Preliminary reviews of employer size for unassigned labour standards complaints in the road transportation sector show that 40% are from micro businesses (fewer than 5 employees) and an additional 43% are from small businesses (more than 5 but fewer than 100 employees).

In addition, the Labour Program's dedicated team, of 23 officers, is currently working on misclassification. Since April 2023, the Labour Program has initiated over 650 inspections and found 129 cases of misclassification. The focus has been on high-risk employers who are suspected of misclassification - drawing from the Department's list of employers with a history of non-compliance, employer names provided through a tip line and names provided by stakeholders.

Q4. What barriers are faced by misclassified workers who wish to report abuse or file complaints? What can be done about this?

A4. Misclassified workers are often individuals who have increased vulnerability-such as newcomers to Canada. They may be faced with several barriers such as fear of retaliation and lack of awareness of their rights.

Some workers misclassified as independent contractors may also have concerns that there could be negative tax implications, or an impact on their take-home pay and job security, if they were treated as employees without understanding that as a misclassified employee, they are giving up important protections and entitlements. As a result, misclassified drivers may not file complaints due to a lack of knowledge about their rights and entitlements or may only file complaints after leaving their job.

Q5. When a violation of the Code is found, what consequences does the employer face?

A5. When there is evidence of a violation under the Code, the Labour Program uses fair, foreseeable, and nationally consistent measures to enforce compliance. Federally regulated employers must follow the employment conditions for hours of work, wages and other benefits.

If there is evidence that an employer is operating below minimum labour standards, the Labour Program will take compliance and enforcement actions such as an assurance of voluntary compliance whereby the employer makes a written commitment that they will correct contraventions. More serious compliance actions may also be applied. These include legal orders such as payment orders and compliance orders requiring an employer to pay wages or other amounts owed or take corrective action. Administrative monetary penalties (AMPs) - financial penalties intended to deter non-compliance with the Code, may also be issued.

In addition, employers who have received AMPs may be publicly named online, which further deters non-compliance and represents a reputational harm for employers.

Legislative Amendments and Misclassification Initiatives

Q6. How are recent legislative changes to the Code enhancing worker protections and addressing misclassification of drivers in the federal road transportation sector?

A6. In 2024, amendments to the Code came into force to better protect employees in federally regulated workplaces, including gig workers, against misclassification.

The amendments introduced strengthened prohibitions against misclassification across all parts of the Code (industrial relations, occupational health and safety and labour standards), added a presumption that a worker is an employee, unless proven otherwise, and confirmed that the burden of proof is on the employer if a worker's employee status is contested.

Workers who are true independent contractors are not affected by these amendments.

Q7. There appears to be a lack of Government oversight and will to show results in eliminating employee misclassification. What have you done to curb this issue?

A7. Addressing misclassification in the road transportation sector continues to be a priority of the Labour Program. We have acted and continue to do so.

• A first amendment to the Canada Labour Code in 2021 added a provision to make the misclassification of workers illegal. These provisions were further strengthened in 2024 to introduce a presumption that all workers, including gig workers, are employees unless proven otherwise. This places the burden of proof where it belongs, on the employer.
• In 2023, $26.3 million was allocated to the Labour Program to establish a dedicated team focussed exclusively on addressing the misclassification in the road transportation sector:
  • 23 inspectors were hired and they have initiated more than 650 inspections and over 400 educational activities across Canada
  • this has resulted in bringing more than 80% of the inspected employers back into compliance
  • this is done in collaboration with partners across jurisdictions including the Canada Revenue Agency (CRA) and provincial regulatory authorities
• The Labour Program is also making use of information sharing agreements to further support respective compliance and enforcement activities in federal departments.  This includes sharing information through signed agreements with the CRA, and between the Labour Program and the Temporary Foreign Worker Program.
• The Labour Program will continue to address the misclassification in the road transportation sector. Specifically:
  • the Minister of Jobs and Families directed officials to undertake a comprehensive review of the administrative monetary penalties (AMPs) regime to ensure strong deterrence and prevention of future violations
  • this Fall, the Labour Program will launch a major inspection blitz in the Greater Toronto and Hamilton Area, to enforce the Code and stop non-compliant employers from misclassifying their drivers
  • the Labour Program will also look to fast-track enforcement measures, moving more quickly through the compliance continuum, including swiftly issuing penalties to address non-compliance and stop misclassification
  • the Labour Program will also look to expand the public naming of employers to include administrative violations related to misclassification investigations

Dedicated team

Q8. What has the Labour Program's misclassification team achieved to date?

A8. This dedicated Misclassification Team, of 23 inspectors, is actively conducting in-person, detailed inspections with trucking companies while applying compliance and enforcement measures, such as orders, administrative monetary penalties and public naming of violators, to enforce the provisions of the Code.

Since April 2023, the Labour Program has initiated over 650 inspections and found 129 cases of misclassification. The focus has been on high risk employers who are suspected of misclassification - drawing from the Department's list of employers with a history of non-compliance, employer names provided through a tip line and names provided by stakeholders.

The Misclassification Team has obtained voluntary agreement from more than 80% of employers inspected to properly classify their drivers as employees. Employers who do not cooperate or who do not come into compliance, are issued Compliance Orders (CO) and Administrative Monetary Penalties (AMPs).

The Team has also collaborated with federal (such as the Canada Revenue Agency - CRA) and provincial partner agencies, including workers compensation boards, to raise awareness about misclassification among truck drivers.

Since late 2024, there have been joint operations at weigh stations in Quebec, Ontario, Nova Scotia, British Columbia, Alberta, Saskatchewan and Manitoba to educate drivers about misclassification and their rights under the Code, as well to gather information on employers who may be misclassifying drivers.

Q9. Can you provide statistics on work conducted by the misclassification team to date?

A9. As of October 18, 2025

• The Misclassification Team has initiated over 650 inspections and led more than 400 educational outreach activities across Canada since its inception in April 2023.
• To date, the team has:
  • found 129 cases of misclassification
  • successfully obtained a voluntary agreement from more than 80% of employers inspected to properly treat their drivers as employees and comply with the Code
  • issued 30 Compliance Orders, and
  • issued 22 Administrative Monetary Penalties (AMPs)

Q10. What are the Labour Program's next steps in combatting driver misclassification?

A10. The next steps for the Labour Program towards ending the illegal practice of misclassification in the road industry include:

• increasing inspections and enforcement for non-compliant actors under both the labour standards and occupational health and safety provisions of the Code, including scheduling a targeted inspection blitz in Ontario (fall 2025)
• expanding partnerships with federal and provincial government departments and agencies including scheduling more joint operations at truck inspection stations and weigh scales into 2026
• making use of existing Information Sharing Arrangements (with the Canada Revenue Agency (CRA) and the Temporary Foreign Worker (TFW) Program) to further support and maximise compliance and enforcement activities amongst respective agencies
• undertaking a comprehensive review of the administrative monetary penalties regime and public naming of employers to ensure prevention and deter future non-compliance

Collaboration with other federal agencies/departments (CRA) and programs (TFW)

Q11. How is the Labour Program working with other federal departments and agencies to tackle misclassification in the road transportation sector?

A11. Addressing employee misclassification is a key priority and the Labour Program is increasingly looking at ways to share information between federal organizations to support the availability of data for respective compliance and enforcement activities, including inspections.

In March 2025, CRA and the Labour Program signed an Information Sharing Arrangement (ISA) to facilitate inspections and enforcement in the federally regulated road transportation sector. Under this arrangement, the Labour Program has been actively sharing data with CRA since April 2025, including information on employers alleged or found to be misclassifying employees.

[Any questions specific to how this information may be used in advancing compliance and enforcement activities related to the Income Tax Act and CRA-related initiatives would need to be directed to the CRA]

In addition, the Labour Program and the TFW Program have entered a Memorandum of Understanding (MOU), to share relevant data between the 2 programs, to help address issues of non-compliance, particularly in the road transportation sector. This will help strengthen enforcement of the Code in the road transportation sector.

Q12. How is the data from the ISA with CRA supporting CRA compliance efforts? Is there any confirmation that the provision of data from the Labour Program has resulted in findings of non-compliance?

[Questions of this nature would need to be directed to officials of the Canada Revenue Agency.]

Collaboration with provincial authorities

Q13. How is collaboration occurring with provincial authorities to address misclassification?

A13. The Labour Program has developed strong collaborative relationships with federal partners and provincial motor vehicle enforcement agencies enabling direct action on misclassified drivers, addressing safety and labour-related matters, providing education, and ensuring follow-up inspection when misclassification is suspected.

These joint efforts at weigh scales across Canada began in fall of 2024 in Quebec and continue to grow across the country and to include the CRA. Federal and provincial departments address driver misclassification in accordance with their respective mandates. The Labour Program has participated at weigh scale operations in Quebec, Ontario, Nova Scotia, British Columbia, Alberta, Saskatchewan and Manitoba.

Through these joint operations, the Labour Program has uncovered new trucking companies that were previously unknown. As a result, plans are in place to conduct a targeted health and safety and labour standards inspection blitz in selected areas to strengthen compliance with the Code and most importantly correct driver misclassification. The Labour Program is aiming for timely and swift follow-up and follow-through of its efforts expanded across Canadian weigh scales to support fair and safe workplaces.

Q14. With which provinces and provincial regulatory bodies has the Labour Program partnered to detect and address misclassification and non-compliance in the trucking industry?

A14. The Labour Program conducts joint enforcement operations at weigh stations across Canada in collaboration with various provincial enforcement agencies, including:

• the Société de l'assurance automobile du Québec (SAAQ)
• the Ontario Ministry of Transportation (MTO) and Workplace Safety and Insurance Board (WSIB) in the Greater Toronto Area
• the Nova Scotia government
• the Ministry of Transportation and Transit in British Columbia, Work Safe BC, Royal and Insurance Corporation of British Columbia (ICBC)
• the Government of Alberta and CRA at 2 weigh stations - Airdrie and Leduc, and
• the Government of Saskatchewan in the Saskatoon area

In some cases, the joint operations include additional partners such as provincial Workers Compensation Boards (WCB) and the Canada Revenue Agency (CRA).

Q15. Is the Labour Program exploring the possibility of information sharing arrangements with provinces and territories for the purpose of addressing misclassification?

A15. The Labour Program regularly collaborates with provincial enforcement agencies through joint operations at weigh stations nationwide to assess driver awareness of workplace safety and misclassification in the road transportation industry, while obtaining leads of possible misclassification for future inspections.

Administrative Monetary Penalties

Q16. How are existing enforcement measures such as Administrative Monetary Penalties (AMPs) leveraged to help address misclassification?

A16. The AMP regime is designed to promote compliance with the Code rather than to punish non-compliance. In some cases, the names of employers issued AMPs for misclassifying employees have been publicly disclosed, enhancing transparency and reinforcing accountability.

Under the existing AMPS regime, a large business that contravenes the misclassification prohibition (a type "C" violation) would be subject to a $12,000 penalty for a first violation, and a $36,000 penalty for each subsequent occurrence, as a history of non-compliance can result in a tripling of the base amount.

AMPs can be issued throughout the life of an investigation and often while the investigation is ongoing. For example, if an employer fails to provide documents requested to carry out the inspection, a type "A" (maximum penalty, $2,000) AMP will be issued while the inspection remains active to encourage the employer to provide the necessary information. Again, the base amount is tripled in the case of repeat violations.

Under the Code, an AMP can only be issued within 2 years of the violation, limiting their use to more recent or ongoing contraventions.

Q17. Some stakeholders have argued that penalty amounts for misclassification are low and ineffective. How effective are administrative monetary penalties under the Canada Labour Code?

A17. There was significant stakeholder engagement when the AMPS regime was developed and introduced under the Code in 2021, allowing for the issuance of penalties for violations under Part II (Occupational Health and Safety) and Part III (Labour Standards).

At the time, concerns were raised by some stakeholders that penalties might in some cases constitute a significant burden for employers, suggesting that these should be reserved for serious and repeat violations, or cases where other compliance measures have failed.

The current penalty rates were established in consultation with interested parties, aiming to set amounts that foster compliance without crossing into the realm of criminal punishments. While base penalty rates may seem modest, the base amount is multiplied by 3 in the case of repeat violations.

Under the existing AMPS regime, a large business that contravenes the misclassification prohibition (a type "C" violation) would be subject to a $12,000 penalty for a first violation, and a $36,000 penalty for each subsequent occurrence.

Failing to comply with a compliance order requiring a large business to stop misclassifying employees (a type "D" violation) could be subject to its own, separate penalty of $25,000, increasing to $75,000, if there is a history of non-compliance.

Nonetheless, it is recognized that penalty amounts set almost 5 years ago may require adjustments, particularly due to the changing labour landscape.

The Labour Program is conducting a review of the methodology and schedules used to determine AMP amounts for potential regulatory amendments. This review includes examining approaches in other jurisdictions. For example, The United States recently adjusted civil monetary penalties for certain labour standard-related violations to account for inflation.

Maximum penalties in provinces and territories that have an AMP regime, for an egregious labour standards violation, range from $900 to $10,000, which is lower than the current $75,000 maximum for a repeat violation (for a type "D" violation committed by a large business) under Part III of the Code. Penalties for the most serious occupational health and safety violations tend to be higher (normally ranging between $2,000 to $10,000) but can reach up to $250,000 in Yukon and almost $800,000 in British Columbia.

Q18. How many AMPs have been issued to date by the misclassification team and what has been the range of penalties?

A18. The misclassification team has issued 22 Notices of Violation (through which administrative monetary penalties are imposed). To date, 12 of these have been successfully served. The remaining notices are still active and in the process of being served. The amounts of these penalties issued so far range from $500 to $11,000.

The reasons for these Notices of Violation include failure to comply with misclassification provisions, not providing requested information and documents, not providing reasonable assistance to an officer, and failing to comply with a legal order.

Q19. Why are only a few AMPs made public compared to the total number issued?

A19. Misclassification of employees is classified as a type "C" violation, and therefore employers committing such a violation are publicly named. While more recent notices of violation related to misclassification have been issued, there is a lag time between issuance and publication due to the requirement to wait until the notice of violation is served and the 30-day period within which an employer can request a review of the penalty has elapsed.

In addition, should an employer request a review of the penalties contained in the Notice of Violation, or make a subsequent appeal, under the current approach, the publication occurs after the review and appeal process has been completed. The Labour Program may revisit this, as part of the review of the AMPs regime that is underway.

To date, the majority of AMPs issued are for type "A" violations, such as failure to provide reasonable assistance to officers or provide employment-related records upon request.

Currently, the Labour Program does not publicly name employers who have only been issued type "A" (administrative) AMPs. As a result, of the 22 AMPs issued, 2 have been publicly named, with more pending publication.

Q20. Will the government increase penalty amounts to enhance compliance? Will AMPs be issued more frequently to help deter non-compliance?

A20. The 2024 Fall Economic Statement referenced the need to better protect Canadian workers from wage theft and committed to increase the penalties imposed on federally regulated employers who commit wage theft.

As such, the Labour Program is undertaking a review of current provisions, regulations, and policies concerning Administrative Monetary Penalties (AMPs) to help strengthen compliance with the Code - specifically regarding occupational health and safety and labour standards protections.

This includes examining potential regulatory changes to increase penalties (base amounts and Schedules) and reviewing guidelines and processes to enable the prompt issuance of AMPs to address serious or recurring violations.

During the multi-year stakeholder engagement leading up to the 2021 introduction of the existing AMPS regime, we heard from many stakeholders who urged restraint in the issuance of penalties. They emphasized that AMPs should be reserved for serious or repeat violations and that education and voluntary measures should remain as primary compliance tools.

For their part, unions and employee representatives suggested that penalty amounts for certain violations, such as non-payment of wages, should be set higher but agreed that AMPs be used to supplement, rather than replace, other compliance and enforcement tools. However, it is clear that stronger deterrents are needed.

The Labour Program continues to explore how the existing AMPs framework might be further leveraged to achieve enhanced compliance results, and it will engage stakeholders as in the past, as part of the regulatory review of the AMPS regime.

Ownership and Instructor Licensing

Q21. How can federal and provincial governments ensure transparency in ownership and instructor licensing?

A21. Responsibility for this type of licensing and reporting falls under Transport Canada and the provinces. Queries should be directed to Transport Canada for any information about this subject.

Bloc Québécois- Recommendations

Q22. What is your response to MP Xavier Barsalou-Duval's recommendations intended to address road safety concerns and other issues with the "Drivers Inc." model?

A22. The Government commends MP Xavier Barsalou-Duval for raising this as a subject to be studied in Committee and for making thoughtful suggestions on how we might address this complex matter. We will leave this to the Committee to consider and await its report so that the Government can consider the findings and any proposals.

Q23. What is your response to the MP Xavier Barsalou-Duval's recommendation to establish automatic joint audits between ESDC and CRA of trucking companies without employees or trucks, within 18 months of their creation, with results shared with provincial authorities?

A23. This would require further examination given the distinct mandates and authorities of the 2 organizations. Nevertheless, collaboration is underway.

In March 2025, the Labour Program and CRA signed an Information Sharing Arrangement (ISA) enabling the Labour Program to share information with the CRA on employers believed or found to be misclassifying employees (for example, employer name, business number, address). Such information has been actively shared with the CRA since April 2025.

Q24. What is your response to the recommendations to establish a shared database of offences and violations of unpaid fines in the trucking sector that is accessible to law enforcement (recommendations #5), and recommendation #7, regarding a public registry of offending companies in the trucking sector, in order to ensure, among other things, that those with a history of violations are ineligible for government contracts (for example: Canada Post, Defence)?

Q24. The Labour Program and the Temporary Foreign Worker Program currently publish information about non-compliant employers, including misclassification under the Canada Labour Code. Should there be a registry, this information could be included.

This question would require further study and the expertise of contracting authorities including Treasury Board Secretariat and Public Services and Procurement Canada.

Temporary Foreign Worker Program

Q25. Does the TFW Program permit the use of the Drivers Inc model?

A25. From the TFW Program perspective, this practice is prohibited by Program requirements. All work permits issued via the TFW Program are employer specific.

To receive a work permit via the Program, a temporary foreign worker must be recruited, hired, and paid by a Canadian employer identified in a positive Labour Market Impact Assessment (LMIA).

Regulations do not permit the granting of LMIAs to foreign nationals or temporary foreign workers as applicants. LMIAs are only available to employers in Canada.

A temporary foreign worker cannot incorporate or self-employ to work as a truck driver for a company that received a positive LMIA. The worker must be on the payroll and hired under the same conditions, including wages and benefits, as other truck drivers employed by that company. Incorporating as an owner operator violates LMIA conditions and constitutes non-compliance with the TFW Program.

Before hiring a temporary foreign worker, employers are required to submit a LMIA. The LMIA evaluates whether there is a valid justification and a genuine need for the employer to hire a foreign worker.

It also acts as the first safeguard for worker protections, by reinforcing program requirements related to wages and working conditions. Officers also assess labour market factors such as job creation or retention, development or transfer of skills or knowledge, labour shortages, working conditions, efforts to hire and train Canadians, and the employer's inspection history. It is important to note that to access the TFW Program, employers must demonstrate that they have made efforts to recruit Canadians and permanent residents.

Q26. How many temporary foreign workers are employed via the Temporary Foreign Worker Program in the road transportation sector?

A26. In 2024, there were 8,101 LMIA positions approved via the TFW Program for transport truck driver positions (NOC 73300), and 3,526 approved positions year-to-date in 2025 (January to September).

While working in Canada, temporary foreign workers are entitled to the same workplace rights and protections as Canadians and permanent residents.

Failure to comply with the labour standards or occupational health and safety rights of temporary foreign workers is just as serious and can give rise to the same enforcement measures as violations affecting any other worker.

In addition, the TFW Program has tools in place to protect temporary foreign workers, including a compliance regime that verifies that employers are meeting program requirements.

Q27. Can a temporary foreign worker operate as an incorporated driver?

A27. Self-employment or incorporation as an owner-operator by temporary foreign workers is not permitted under the TFW Program and would be grounds for non-compliance and penalties.

Q28. What information will be shared and received through the TFWP MOU? How will this assist with misclassification in the trucking industry?

A28. Through the MOU, the Labour Program and the Temporary Foreign Worker Program will enhance coordination and collaboration by sharing client and business information such as the name, address and business number of employers and businesses interacting with either program.

This sharing will include those who have been the subject of complaints and investigations, particularly related to employers found to have violated the Code, and/or the Immigration and Refugee Protection Act, as well as its Regulations.

This information sharing will inform compliance and enforcement activities, contribute to policy analysis and program development, and guide operational decisions and Labour Market Impact Assessments.

Q29. Is there an overlap between the "Driver's Inc" Model and the Temporary Foreign Worker Program?

A29. Employee misclassification is the illegal practice of treating workers, who meet the definition of employees, as independent contractors to avoid legal obligations under labour laws. In the road transportation sector, this often manifests as the scheme referred to as "Driver Inc.", where employers require drivers to incorporate and operate as contractors.

Companies using this scheme, avoid paying source deductions, such as income tax, vacation pay, and employment benefits, while denying workers protections under the Canada Labour Code.

The practice of misclassification of transport truck drivers, particularly the use of the "Driver Inc." model, violates Temporary Foreign Worker (TFW) Program requirements and undermines worker protections.

In the trucking industry, employers who are Federally Regulated are expected to abide by Labour Standards, as well as the regulations of the TFW Program (if participating in the Program). The Labour and TFW Programs have implemented an MOU and preliminary data demonstrates that while there is some overlap this may be more symptomatic of bad actors that look to exploit multiple aspects of the landscape.

Because the TFW Program requirements prohibit this practice, regulations do not permit granting of LMIAs to foreign nationals or temporary foreign workers as applicants. LMIAs are only available to employers in Canada.

We are building on existing oversight measures to strengthen the integrity of the TFW Program and are undertaking the following measures:

• implementing an action plan for the transport truck sector that is being developed in collaboration with key industry stakeholders to further strengthen LMIA and inspection processes
• leveraging the Memorandum of Understanding (MOU) agreement between the Labour and Temporary Foreign Worker Programs to exchange compliance information that will be used to inform their respective inspection activities to target high-risk employers

Labour Code compliance information (shared with the MOU) will allow the TFW Program to enhance its compliance oversight by utilizing the information received from the Labour Program to strengthen its risk selection of employers who may require inspection activities.

• The TFWP and Labour Program will continue to work closely together to exchange information regarding employers in the trucking sector and their compliance with the Canada Labour Code and TFW Program regime. The TFW Program has many integrity measures already in place and Labour Market Information Applications (LMIA) from employers in the Trucking Industry undergo enhanced assessments to keep bad actors out of the Program. In addition, early impact of the MOU can be seen through the fact that TFW Program leverages Labour data to flag all employers that are subject to a compliance order so that this is taken into consideration at point of the LMIA application.
• There is evidence that recent efforts to strengthen the administration of the TFW Program changes are having desired effect, as observed through an increase in LMIA refusal rates since 2023:

Issue

The practice of misclassification of transport truck drivers, particularly the use of the "Driver Inc." model, violates Temporary Foreign Worker (TFW) Program requirements and undermines worker protections.

Background

• Employee misclassification is the illegal practice of treating workers who meet the definition of employees as independent contractors to avoid legal obligations under labour laws. In the road transportation sector, this often manifests as the scheme referred to as "Driver Inc.", where employers require drivers to incorporate and operate as contractors. Companies, using this scheme, avoid paying source deductions, such as income tax, vacation pay, and employment benefits, while denying workers protections under the Canada Labour Code.
• From the TFW Program perspective, this practice is prohibited by Program requirements. All work permits issued via the TFW Program are employer-specific. To receive a work permit via the Program, a temporary foreign worker must be recruited, hired, and paid by a Canadian employer identified in a positive Labour Market Impact Assessment (LMIA).
• Regulations do not permit the granting of LMIAs to foreign nationals or temporary foreign workers as applicants. LMIAs are only available to employers in Canada.
• A temporary foreign worker cannot incorporate or self-employ to work as a truck driver for a company that received a positive LMIA. The worker must be on the payroll and hired under the same conditions, including wages and benefits, as other truck drivers employed by that company. Incorporating as an owner operator violates LMIA conditions and constitutes non-compliance with the TFW Program.
• The TFW Program has signed a Memorandum of Understanding (MOU) with the Labour Program to help address non-compliance and better target enforcement activities, including in the road transportation sector.
• The Program also engages stakeholders through the Trucking Industry Committee to address LMIA misuse, worker protections, and labour market integrity.

Key facts

• In 2024, there were approximately 8,100 LMIA positions approved via the TFW Program for transport truck driver positions (National Occupational Classification (NOC) 73300).
• In March 2025, TFW Program officials established a Trucking Industry Committee comprised of key industry stakeholders and federal department representatives. The committee focuses on shared priorities such as LMIA misuse, TFW Program non-compliance, labour market responsiveness, and worker protection. It also serves as a forum to gather labour market information and stakeholder perspectives.
• The TFW Program represents a small share of the entire Canadian labour force, approximately 1.1% when looking at annualized numbers from 2024. Similarly, the TFW Program represents less than 10% of all non-permanent residents in Canada.
• All work permits issued to temporary foreign workers via the TFW Program are employer specific or "closed work permits". Immigration Refugee and Citizenship Canada manage the authorization and issuance of other temporary entry programs into Canada, including any foreign nationals authorized to work in Canada on "open work permits."

Key messages

• The practice of worker misclassification is prohibited by the Temporary Foreign Worker Program, which requires an employer-employee relationship, and constitutes non-compliance with the Program.
• While in Canada, temporary foreign workers have the same workplace rights and protections as Canadians and permanent residents. The Government of Canada remains firmly committed to the rights and protections of temporary foreign workers, and works closely with its provincial and territorial governments, international partners, and worker support organizations on workers protections issues.
• If any suspected fraudulent or criminal activity is identified during LMIA processing or compliance inspections-including leads related to the misclassification of transport truck drivers-the TFW Program works closely with key federal partners such as the Labour Program (for federally regulated employers), IRCC, the Canada Border Services Agency (CBSA), and the Royal Canadian Mounted Police (RCMP). The TFW Program also collaborates with provincial and territorial governments through referral and escalation processes. This collaboration supports the sharing of information related to employer compliance and worker protection.

If pressed

• The Government of Canada is continuously taking steps to strengthen the TFW Program to protect the Canadian economy, Canadian workers, and temporary foreign workers. The Program also has a confidential tip line and online reporting tool where temporary foreign workers or other parties can anonymously report potential wrongdoing and misuse of the TFW Program.
• Employers that are determined to be non-compliant can face significant consequences, including administrative monetary penalties and bans from the Program. Non-compliant employers are also listed on a public-facing Government of Canada website. 
• The Government of Canada also funds the Migrant Worker Support Program, which supports temporary foreign workers to understand and exercise their rights while working in Canada

If pressed, specifically on trucking sector compliance in the TFW Program

• To help increase program integrity and better address program misuse, the TFW Program conducts inspections in high-risk areas, including but not limited to the trucking sector.
• In terms of non-compliance rate, the trucking sector had 74 non-compliant cases between 2018 to 2019 and now, which represents an overall 13% non-compliance rate, more than double the 6% observed across all sectors for the same period.
• While early years (2018 to 2020) saw no monetary penalties in the trucking sector, non-compliance intensified from 2021 onward, with penalties and bans becoming more frequent. The total monetary penalties (AMPs) issued to trucking employers amounted to $2.34 million since 2018 to 2019.
• In 2024 to 2025, 28 trucking employers were found non-compliant. This represented 19% of all non-compliant cases under the TFW Program that year, a significant overrepresentation given trucking's 3.6% share of employers.
• In 2024 to 2025, non-compliant trucking sector employers were issued $1.14 million in monetary penalties (AMPs), accounting for 23% of all AMP amounts issued under the program in 2024 to 2025. This was the largest AMP total for the trucking sector since 2018 to 2019.

• Notes: Unique employers based on Organization ID, that received a positive LMIA for the period from April 1, 2018, to September 5, 2025, based on data extracted from the LMIA system on October 23, 2025.
• *For the period of April 1, 2025 – September 5, 2025
• ** For the period of April 1, 2018 – September 5, 2025

Issue

Workers who are part of Drivers Inc. or misclassified as independent contractors are not eligible for regular Employment Insurance (EI) benefits.

Background

• Misclassification occurs when a worker is engaging in employment activities where there is an employer/employee relationship, but they are on a contract. This type of employment is prevalent in several industries including trucking.
  • In the trucking industry, companies incorrectly classify drivers as independent contractors, often to save money. As a result, these drivers lose labour protections including fair pay, overtime, vacation pay, as well as health and safety protections.
• EI regular benefits are available to workers in insurable employment. Workers who are self-employed, including those wrongly classified, are not required to pay premiums and are not able to access EI regular benefits. Self-employed workers can choose to register for EI special benefits but take up is low.
  • Self-employed workers who own a business or control more than 40% of the corporation's voting shares can enter into a voluntary agreement to pay EI premiums on their self-employment earnings to access special benefits. These supports are for the same circumstances as those available to employed workers: maternity, parental, sickness, compassionate care and family caregiver benefits for adults and children.
  • In FY2023 to 2024 a little under 2% of self-employed workers in Canada opted into Self-Employed Special Benefits, the majority of them being women.

Key facts

• In 2023, approximately 5.2% of the unemployed population was engaged in self-employment activities, including gig work, and did not pay EI premiums, and were therefore ineligible for EI regular benefits.
• In 2024, nearly 65% of trucking companies had workers who were classified as either self-employed or contractors.
• In 2024 there were 17,860 workers in the trucking industry who benefited from EI (NAICS 484). These workers had an average weekly benefit rate of approximately $610 and were on EI for an average of 21.5 weeks, with 36% of claimants exhausting their benefits.
• Less workers in the industry are unionized with a union coverage of 10.8% when compared to the national average of 29.8%.

Key messages

• Fixing misclassification in the trucking sector would mean more workers qualify for EI regular benefits when they lose their jobs, giving them the transition support they need when they are between jobs.
• Labour Canada has already taken steps to address issues of misclassification and work remains ongoing.