Driver Inc ... A Last Word

Michael Ludwig

Michael Ludwig

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Jul 6, 2009
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I suppose by now all of you have read this article;
www.trucknews.com

Government meets with CTOA on incorporated drivers, pledges to drop 'Driver Inc.' term - Truck News

Federal Labour Minister Seamus O’Regan and several MPs met with members of the Canada Truck Operators Association (CTOA) this week, discussing the roles
www.trucknews.com www.trucknews.com
It is official that Driver Inc. is not going anywhere, and is even quasi-encouraged by the federal government.
(I pointed out in another post that this likely has for more to do with votes than anything else)
Driver Inc. isn't even going to be investigated or enforced unless someone from inside a company complains.
(My guess is that unless there is a horrendous outcry, nothing will be done there either)
My suggestion, ladies and gentlemen, govern yourselves accordingly.
 
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I think all that most people can say is...WOW.

So the government has publicly said they condone this business approach. So as this business model moves forward to every segment of life, variety store workers, construction, factory work....any type of work for money, the government will be increasing taxes on legitimate businesses to make up the shortfalls.

As no one wants to say it, the long term fallout of the government being manipulated and coerced by a segment of the population is sad. In a generation or 2 there will no funding for old age security, EI, health care or other programs.

The government talks about inclusion and equality.... yet they are creating social divides.
 
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Capner said:
I think all that most people can say is...WOW.

So the government has publicly said they condone this business approach. So as this business model moves forward to every segment of life, variety store workers, construction, factory work....any type of work for money, the government will be increasing taxes on legitimate businesses to make up the shortfalls.

As no one wants to say it, the long term fallout of the government being manipulated and coerced by a segment of the population is sad. In a generation or 2 there will no funding for old age security, EI, health care or other programs.

The government talks about inclusion and equality.... yet they are creating social divides.
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As @Michael Ludwig has said in other posts, incorporation is a structure that is made to allow individuals to begin and create small business. It is a valid structure and that is why it is hard to pin down.

One issue is whether an individual is being unwillingly manipulated into being an 'incorporated driver' and is being taken advantage of. @Michael Ludwig said that if done properly then there should be no issue. If you make a contract with an 'incorporated driver' that outlines everything that they are giving up, and they choose to confirm with their legal counsel, and then proceed both parties should have covered many of the bases and eliminated this issue.

The government's problem is that if this 'incorporated driver' who is really an individual chooses not to report his income then the government loses out. This 'incorporated driver' makes comparatively a lot of money and has very little costs. The margin is huge UNLESS he pays himself a wage and produces a T4 for himself. There is absolutely no gain for this business model for one driver unless the driver does something illegal and does not report his revenue and his costs.

So long as:
  • the 'incorporated driver' doesn't cry to the government about abuse or not knowing what they were getting into.
  • the 'incorporated driver' does not try to claim that they should get government benefits (EI, CPP) or claim for WSIB when injured
  • the 'incorporated driver' doesn't make a fuss why payroll drivers are getting benefits like Sick Pay, Stat Pay, Health benefits and now they want them.
  • the 'incorporated driver' doesn't want to become a payroll driver on a whim when it suits them better.
  • the government doesn't flip and flop like a fish and later expect businesses to enforce these 'incorporated drivers' to become payroll drivers.
  • the government doesn't expect the carrier to pay anything for the lack of tax compliance on behalf of the 'incorporated driver'.
  • the government does not retroactively change the structure and expect both the 'incorporated driver' and the carrier to amend previously submitted remittances if they choose the 'incorporated driver' should never have been compensated that way.
I am going to stay the course and not hire 'incorporated drivers'. It sounds too risky for me to rely on this federal government to make anything stick. In the last six months the government went from 'watch out, we're aggressively going to enforce this' to 'it's not going anywhere' - basically que sera sera. I expect that when the government figures out that they're losing out on CPP and EI deductions from both the employee and the company, the income tax forward payment from each of these employees is gone, and that most of these 'incorporated drivers' are not reporting their incomes, you'll see them change their tune again and force businesses to police it again. It happened with WSIB in Ontario - the same will happen with the feds.
 
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You are exactly right Jim L! This government (or any for that matter) can say whatever it wants to appease or placate any particular group, or industry, and continue to do so until…….it hits them in their pocketbook. Can we assume that all of these newly “incorporated” drivers will be good corporate citizens and pay all of their applicable taxes, fees and deductions? If so, great, no harm, no foul. However, after 70+ years in the real world, something tells me that is not going to happen. Money, especially large sums of it, has a tendency to warp peoples understanding of what the right thing to do is.
 
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  • the 'incorporated driver' doesn't cry to the government about abuse or not knowing what they were getting into.
  • the 'incorporated driver' does not try to claim that they should get government benefits (EI, CPP) or claim for WSIB when injured
  • the 'incorporated driver' doesn't make a fuss why payroll drivers are getting benefits like Sick Pay, Stat Pay, Health benefits and now they want them.
  • the 'incorporated driver' doesn't want to become a payroll driver on a whim when it suits them better.
  • the government doesn't flip and flop like a fish and later expect businesses to enforce these 'incorporated drivers' to become payroll drivers.
  • the government doesn't expect the carrier to pay anything for the lack of tax compliance on behalf of the 'incorporated driver'.
  • the government does not retroactively change the structure and expect both the 'incorporated driver' and the carrier to amend previously submitted remittances if they choose the 'incorporated driver' should never have been compensated that way.
So would most of these points also not apply to Owner Operators also?? Once the deductions for your fuel, Insurance and whatever else the company takes, the rest goes to the driver and he has to handle his own taxes and such. Are they paying their fair share of $$ to the goverment??
 
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Is this going too far?
  • the 'incorporated driver' is not permitted to enter and request services at clinics, emergency rooms, etc.
  • the 'incorporated driver' is not permitted to drive their personal vehicle on roads paved by the province/feds.
  • the 'incorporated driver' is not permitted to call 911 should they have any sort of emergency.
  • the 'incorporated driver' is not permitted to request the assistance of fire services should they require.
I could go on but I guess the 'incorporated driver' does contribute to the government coffers by way of HST (or PST, GST), they also contribute to property tax revenues which pays for some of the above noted services..

Anyway, I've recently hired a couple of subcontractors that will mainly work for us, and sometimes work elsewhere. I'm debating asking them to provide their NOA proving they pay taxes because as you can tell this really gets under my skin. You either agree with the system in place and are a legit part of it or GTFO and be shady elsewhere... I must be hangry again, time for lunch!

Keep well,
Mike
 
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I think we need to take the term "Driver" from this. It is now "Incorporated Workers". This is and will spread to all segments of business. If an employer decides to pursue the Incorporated worker model, I believe the government expects the employer to issue a T4A. This will identify to CRA that moneys were paid. If they don't....well.

I'd like to hear someone's thoughts with respect to the impact on Insurance.

At present, if an Owner Operator has an accident, is injured, and they haven't personally opted into WSIB, or have 3rd party injury coverage, they can pursue the vehicle insurer for medical costs. We all know how costly that can be when you're not insured.

Thoughts?
 
Capner said:
I think we need to take the term "Driver" from this. It is now "Incorporated Workers". This is and will spread to all segments of business. If an employer decides to pursue the Incorporated worker model, I believe the government expects the employer to issue a T4A. This will identify to CRA that moneys were paid. If they don't....well.

I'd like to hear someone's thoughts with respect to the impact on Insurance.

At present, if an Owner Operator has an accident, is injured, and they haven't personally opted into WSIB, or have 3rd party injury coverage, they can pursue the vehicle insurer for medical costs. We all know how costly that can be when you're not insured.

Thoughts?
Click to expand...
the OO will still be covered by standard accident benefits as long as they are noted on the policy.
 
Mario said:
So would most of these points also not apply to Owner Operators also?? Once the deductions for your fuel, Insurance and whatever else the company takes, the rest goes to the driver and he has to handle his own taxes and such. Are they paying their fair share of $$ to the goverment??
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Owner Operators have the additional risk by buying their own truck and paying for their fuel. How fuel gets paid is not an issue.
 
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Jim L said:
Owner Operators have the additional risk by buying their own truck and paying for their fuel. How fuel gets paid is not an issue.
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Fuel or truck was not the question. Are they paying taxes to the goverment on the not taxed cheques they get? When getting a cheque with no taxes removed are Owner Operators or Drivers Inc paying their fair share? This is the question I was asking. Seems people already assume Drivers Inc pay no taxes at all from their Incorporated companies.
 
Mario said:
Fuel or truck was not the question. Are they paying taxes to the goverment on the not taxed cheques they get? When getting a cheque with no taxes removed are Owner Operators or Drivers Inc paying their fair share? This is the question I was asking. Seems people already assume Drivers Inc pay no taxes at all from their Incorporated companies.
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I have known some guys that where driver inc and the answer is no they did not pay taxes for the years they worked as driver inc. Long time ago now back in late 90's If this is Mario I think it is. It was for your Dad and Victor back in the day.
 
Rob said:
I have known some guys that where driver inc and the answer is no they did not pay taxes for the years they worked as driver inc. Long time ago now back in late 90's If this is Mario I think it is. It was for your Dad and Victor back in the day.
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Wrong Mario but I also have known Owner Operators and Drivers Inc who have not paid taxes either.
 
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The question was, if an incorporated driver is injured physically in an accident. Can they go back your auto policy and claim medical expenses. There any many cases where O/O's have been successful doing this. I can't see the fleet insurer subjecting themselves to these type of claims.

Just my thought.
 
@Capner.. It is my strong understanding, once you are NOT on payroll, you don't have coverage through the company you are working for and must produce a proof of 3-d party coverage..
The success of those O/O's winning judgement based on a lack of their company's paperwork process while signing them on board..
But, may be I don't know something?
Igor still eager to learn, eh...
 
Capner said:
The question was, if an incorporated driver is injured physically in an accident. Can they go back your auto policy and claim medical expenses. There any many cases where O/O's have been successful doing this. I can't see the fleet insurer subjecting themselves to these type of claims.

Just my thought.
Click to expand...
if they are noted on the policy they are eligible for Accident benefits.
 
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