Question Period Note: MISCLASSIFICATION OF EMPLOYEES IN THE TRUCKING INDUSTRY

Incorporated drivers in the trucking industry are at times misclassified by employers as independent contractors, rather than employees, to avoid obligations under the Canada Labour Code.  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 to December 24, 2025, the Labour Program’s National Misclassification Team has undertaken over 860 inspections and 546 education activities with carriers in the federally regulated road transportation sector.

The Misclassification Team has obtained voluntary agreement from more than 80% of employers inspected, and found not to be complying with the rules, to properly classify their drivers as employees. Employers who did not cooperate with Labour Program inspectors or did not come into compliance, have been issued Compliance Orders (CO) and Administrative Monetary Penalties (AMPs).

As of December 24, 2025, the Labour Program has issued 37 Compliance Orders and 28 AMPs to address misclassification in the road transportation sector.

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, joint operations have taken place at weigh stations in Quebec, Ontario, Nova Scotia, British Columbia, Alberta, Saskatchewan and Manitoba.

Within the joint operations, the Labour Program seeks to educate drivers about misclassification and their rights under the Code and gather information on employers who may be misclassifying workers.

These enforcement activities are often undertaken in partnership with other federal departments, such as the CRA, and provincial regulatory agencies, including workers’ compensation boards.

The Government of Canada is committed to protecting workers’ rights and making sure all employers follow fair labour practices.

Misclassifying workers—especially in the road transportation sector—remains a top priority because it harms workers, creates unfair competition, and undermines confidence in the labour market.

That’s why our government took action. Budget 2025 invested $77 million over four years for the Canada Revenue Agency to crack down on employers who misclassify employees.

The Canada Labour Code is clear: worker misclassification is illegal. All workers are presumed to be employees unless proven otherwise. This puts the responsibility on employers while preserving the status of true independent contractors.

Finally, Budget 2025 reaffirmed the Government’s commitment to crack down on employers who violate the Canada Labour Code, by substantially increasing the penalties imposed on bad actors. These enhancements will strengthen protections for workers and ensure fair competition those employers who play by the rules.

IF PRESSED: Progress

Over the past two years, the Labour Program has:

Inspected more than 850 employers

Delivered over 500 outreach and education sessions

Issued penalties and other enforcement measures to employers who failed to follow the Canada Labour Code

We work closely with federal and provincial partners across the country.

Our presence at truck weigh stations helps educate drivers and detect potential misclassification.

We also share information with key partners—including the Canada Revenue Agency—to support a coordinated effort to stop misclassification.

The Labour Program’s continued focus on the road transportation industry protects workers, supports fair competition, and helps raise standards across the sector.

IF PRESSED: Government Investments

In the 2022 Fall Economic Statement, the Government provided $26.3 million over five years to address misclassification and strengthen compliance in the federally regulated road transportation sector.

A dedicated team of inspectors now focuses on truck‑driver misclassification through outreach, education, inspections, and enforcement.

Collaboration with provinces and other federal partners has expanded, including joint operations at weigh stations in Quebec, Ontario, Nova Scotia, B.C., Alberta, Saskatchewan, and Manitoba. In some cases, Workers’ Compensation Boards and the CRA participate as well.

IF PRESSED: Government Enforcement

Employers who misclassify workers and deny them their rights are violating the Canada Labour Code and may face administrative monetary penalties, compliance orders, or payment orders for wages owed.

Between April 1, 2024, and December 24, 2025, the Labour Program issued over 890 payment orders, totalling more than $5.1 million in unpaid wages and related amounts.

As of December 24, 2025, enforcement actions related to misclassification include:

28 Administrative Monetary Penalties

37 compliance orders

Public naming of 3 non‑compliant employers

The Labour Program is exploring ways to strengthen the AMPs regime, including increased penalties and more frequent public naming of non‑compliant employers.

Hamilton–GTA Inspection Blitz (December 1–5, 2025)

A large, coordinated inspection blitz brought together labour standards and health and safety inspectors.

As of December 24, 2025, early results include:

188 misclassification inspections with 12 potential cases identified; 178 investigations are still underway.

74 health and safety inspections with 45 violations found; 67 investigations are ongoing.

Information from this blitz will also be shared with the CRA to support coordinated enforcement.

Next Steps

Due to the success of the December blitz, planning has begun for a similar operation in the Montreal area, for Spring 2026.

The road transportation industry has more than 8,000 federally regulated employers and 260,000 employees. Precise national statistics are limited. However, 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.

Stakeholders, notably the Canadian Trucking Alliance (CTA), identify the incorporated driver model as a significant concern. Under this model, drivers incorporate themselves and offer their driving services as an independent contractor to road transport carriers. These drivers typically operate the transport carriers’ vehicles and exercise little to no control over their work.

By not treating these workers as employees, employers are not providing them with entitlements under the Canada Labour Code (Code), such as overtime pay, annual vacations, general holidays, or rights on termination of employment. These workers may also not receive proper occupational health and safety protections, such as critical safety training and the right to refuse dangerous work, which can also impact the safety of Canadian road networks. Furthermore, misclassification disproportionately affects workers that are vulnerable and from marginalized groups.

As of January 1, 2021, new provisions (section 167.1) of the Code prevent employers from intentionally misclassifying employees to deprive them of their labour standards.

During 2021 and 2022, the Labour Program ran a pilot project to assess understanding of misclassification, promote the new measures and inspect workplaces. The pilot uncovered high levels of non-compliance (60%) in the Ontario Region.

In the 2022 Fall Economic Statement, the Government announced $26.3 million over five years, starting in 2023-2024 for the Labour Program to take stronger, proactive action against non-compliant employers in the road transportation industry who misclassify employees.

Starting in 2023, a dedicated team of inspectors is active in the field, educating, building awareness, and conducting inspections on the issue of misclassification while moving along the compliance continuum process to enforce the provisions of the Code.

On June 20, 2024, further amendments to the Code expanded protections for misclassification to include industrial relations (Part I) and occupational health and safety (Part II). The changes also strengthened prohibitions against misclassification and added a presumption that all workers, including gig workers, are employees unless proven otherwise. If a worker’s employee status is contested, the burden of proof is on the employer to prove they are not an employee.

Employers who misclassify employees are in contravention of the Code and may be subject to various enforcement measures, such as administrative monetary penalties and compliance orders. Additionally, employers who misclassify employees and do not remit proper entitlements under the Code, may further be subject to payment orders for wages and other amounts owed to their employees.

In March 2025, the Canada Revenue Agency (CRA) and Labour Program, ESDC signed an Information Sharing Arrangement (ISA) to facilitate inspections and enforcement in the federally regulated road transportation sector, as directed in Budget 2024. Since this time, the Labour Program has been sending information to CRA about employers determined or alleged to be misclassifying employees.

Following an announcement in Budget 2025, amendments to the Income Tax Act and the Excise Tax Act were introduced under the Budget 2025 Implementation Act, No. 1 that will allow the CRA to share information with the ESDC for the purpose of addressing worker misclassification. CRA and the Labour Program will revise the current ISA, which allows Labour Program to share information with CRA, to enable bilateral information sharing once the amendments come into force.

In October 2025, the Labour Program and the Temporary Foreign Worker Program Branch (TFWPB) signed a Memorandum of Understanding (MOU) to share data and address non-compliance while better targeting enforcement activities, particularly in the trucking industry. Under this agreement, the Labour Program and the TFWPB will share 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.

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