The federal government says it will lift the moratorium on T4A forms in an effort to stamp out the misclassification of truck drivers, a scheme labeled within the industry as Driver Inc.
The announcement comes as the feds announce their budget.
“Trucking is vital to connecting Canada’s vast and expansive territory and bridging our united economies — but not at the expense of industry standards and tax obligations,” the government said in a release.
“Too many trucking companies and the drivers they hire are in non-compliance with tax obligations. Some companies erroneously and deliberately misclassify their truck drivers as independent contractors, instead of on-staff employees. These practices undercut competition in the sector and unevenly punish rule abiding companies and deprive workers of the benefits and pensions they are owed.”
The budget sets aside $77 million over four years beginning in 2026-2027 with ongoing funding of $19.2 million annually for Canada Revenue Agency to lift the moratorium on the penalties for failure to report fees for service transactions in the trucking industry and to implement a program that addresses non-compliance issues related to personal service businesses and reporting fees for service.
The budget would also propose amending the Income Tax Act and Excise Tax Act to allow CRA to share taxpayer information with Employment and Social Development Canada to allow for better enforcement against driver misclassification.
“Budget 2025 is cracking down on Driver Inc., closing loopholes, making our roads safer, and standing up for drivers and businesses that play by the rules,” said Francois-Philippe Champagne, Minister of Finance and National Revenue. “We are lifting the moratorium on T4A penalties in the trucking industry as part of a series of targeted measures to combat misclassification. In doing so, we are working to guarantee the benefits workers are entitled to, improve safety for Canadians, and ensure that everyone pays their fair share.”
“Trucking companies who follow the rules should not be put at a disadvantage to those who do not,” added Wayne Long, Secretary of State for CRA and financial institutions. “With the budget measures we are proposing, we will be levelling the playing field, strengthening tax compliance to ensure everyone pays their fair share in supporting the programs and services Canadians depend on, and supporting access to benefits for workers in a key sector of our economy.”
