(Montreal) The boss of Canada’s largest trucking company says widespread misclassifications of drivers are harming companies like his as well as drivers, a problem felt even more acutely in a difficult time for the Canadian economy.
TFI International President and CEO Alain Bédard calls the phenomenon known as “chauffeur inc.” “disaster” for trucking companies, as those who break the rules gain a competitive advantage.
“We are losing volume because the market is soft and we face unfair competition in the case of “chauffeur inc.” he told analysts on a conference call Friday.
It’s a disaster we’re experiencing in Canada and no one is doing anything about it.
Alain Bédard, President and CEO of TFI International
“Chauffeur inc. » refers to the misclassification of workers as self-employed, meaning the company does not pay benefits or provide basic labor protections.
So-called contractors who work for a single company and have no control over their schedules are illegal – and in a risky situation, because they lack basic rights such as workers’ compensation , overtime, paid leave or severance pay.
Although Ottawa has taken some steps to alleviate the problem, truckers and owners want additional measures to be taken. They say the crisis continues to deepen amid delays in implementing measures, leading to a decline in profits and worker well-being in a sector already known for razor-thin margins and grueling hours. .
“They don’t pay any benefits to their drivers,” said Mr. Bédard. The competitive advantage of “chauffeur inc. » could ease when demand picks up after a difficult year. “But it will be a long-term problem for us as long as no one in Ottawa, Quebec or Toronto does anything to fix it,” he argued.
An “education-focused approach”
Last year, the federal labor minister’s office said the government was focused on an “education-led approach to ending this discriminatory practice.”
“Employers who continue to knowingly break the law after being informed and made aware will be held accountable,” Hartley Witten, press secretary to Minister Seamus O’Regan, said in an email last May.
The Quebec Trucking Association (ACQ) says it filed a brief last November with several ministers of the Quebec government presenting proposed legislative changes to stem the ploy. The ACQ also met the following month with the federal Minister of Transport, Pablo Rodriguez.
According to models presented in November by the ACQ and supported by the Cain Lamarre firm, nearly 2 billion have not been paid in contributions to the Quebec state since the beginning of the phenomenon 12 years ago.
Between January 2019 and March 2020, the Ontario Workplace Safety and Insurance Board (WSIB) audited 204 trucking companies and found that 47% were underreporting revenue drivers, which can be a key indicator of misclassification.
More measurements
Canadian Trucking Alliance President Stephen Laskowski praised Employment and Social Development Canada for stepping up enforcement against violators in southern Ontario over the past two years.
“It’s a race to the bottom, and it’s also widely used to mistreat newcomers to Canada,” he said of “Chauffeur Inc.” “.
Mr. Laskowski also called for higher fines and even tougher enforcement measures to deter wrongful classifications.
Last year’s federal budget included funding to amend the Canada Labor Code to improve job protections for federally regulated workers by strengthening prohibitions on employee misclassification, the spokeswoman said. Canada Revenue Agency (CRA), Hannah Wardell.
Last fall, the CRA launched the second phase of an educational campaign aimed at “personal services businesses,” a special tax classification for contractors who “would be considered an employee of the payer” if they do not had not incorporated themselves.
“The information collected during these two pilot phases will help guide the CRA’s future training and compliance activities,” said Ms.me Wardell in an email last year.
Decrease in post-pandemic deliveries
Respite couldn’t come soon enough for TFI and many other transportation companies.
“It was terrible,” Mr. Bédard said of January, but mainly because of weather problems.
“Of course, the first quarter is going to be a difficult quarter for us,” he added.
The Canadian trucking industry faces a fragile market as freight volumes and rates have continued to decline over the past year – in line with declining consumer demand – from skyrocketing highs seen during the pandemic.
In addition to declining shipments, costs have climbed while freight rates have fallen.
At TFI, so-called part-load sales, which consist of several deliveries of goods for different customers in a single trip, fell by 16 percent in the fourth quarter compared to the same period of the previous year. Truckload revenues saw an even greater decline, by 21%. The two segments account for more than 70% of the company’s profits.
TFI strengthened its fleet with the acquisition last year of Wisconsin-based JHT Holdings, which generates approximately US$500 million in annual revenue.
In December, it announced the purchase of Texas-based platform company Daseke in a $1.1 billion deal expected to close in the second quarter.
On Thursday, TFI announced that its net profit fell 14% to US$131.4 million in the quarter ended December 31. Revenue rose less than 1% to US$1.97 billion. Still, the company beat earnings expectations, according to financial markets firm Refinitiv.