The underground economy now controls nearly a third of Canada’s trucking industry, evading billions in taxes and flouting labour laws, the Commons finance committee was told this week. Blacklock's Reporter says Geoffrey Wood, senior vice president of the Canadian Trucking Alliance, urged the federal government to take immediate action to enforce existing laws.“From our perspective, we just want the law enforced,” Wood testified. “Please help us.”For over five years, the Canadian Trucking Alliance has called on the government to crack down on widespread non-compliance in the sector, including labour abuses and tax evasion. However, Wood said these pleas have gone unanswered, allowing the problem to grow exponentially.A 2022 Department of Employment spot check in Ontario revealed alarming results, with more than 60% of employers found in violation of labour codes, according to Wood. “Sixty percent represents a substantial non-compliance figure, one which the department has never seen before,” he said.The Canada Revenue Agency’s audits have similarly identified extensive tax evasion in the industry. “It is estimated a third of the trucking industry is in the grip of the underground economy,” Wood said. “This issue needs urgent attention.”Wood warned that the Canadian trucking industry could be overwhelmed by the underground economy if swift action is not taken. Non-compliant operators can significantly lower their operating costs, distorting market competition, while stripping workers of essential rights like overtime pay, vacation pay, and access to Workers' Compensation.“This is just plain wrong, and we need to fix it,” said Wood. He estimated that tax evasion within the industry amounts to billions of dollars annually.In its Pre-Budget Submission, the Trucking Alliance, representing some 5,000 companies, outlined the financial pressures the sector faces. Firms typically operate on razor-thin margins, and the carbon tax, which rose to 21¢ per litre on diesel fuel last April, is adding between $15,000 to $20,000 per truck annually in fuel costs, Wood explained.“The federal carbon tax is intended to encourage truck operators to switch to less carbon-intensive alternatives, which don’t exist currently in the long-haul sector and won’t for the foreseeable future,” Wood said. He added that the tax does little to benefit the environment but represents a $2 billion annual cost to the industry, forcing those costs onto consumers.
