What insurers think of Canada’s move to tackle trucking fraud

Insurance Bureau of Canada (IBC) is welcoming a new federal government initiative to tackle fraud in Canada’s trucking industry.

In Budget 2025, the Government of Canada announced new funding to address concerns related to the illegal misclassification of commercial truck drivers. This relates to “a fraudulent scheme where some companies erroneously and deliberately misclassify their truck drivers as independent contractors, instead of on-staff employees,” Cecilia Omole, IBC’s manager of commercial policy, says in a press release last week.

Budget 2025 proposes amending the Income Tax Act and the Excise Tax Act to allow the Canada Revenue Agency (CRA) to share taxpayer information and confidential information as it relates to the classification of workers with Employment and Social Development Canada (ESDC), the Department of Finance says in an Oct. 30 statement. This would provide ESDC with access to better information, which could in turn allow it to more effectively address the issue of driver misclassification in the trucking industry.

The feds will also provide $77 million over four years — starting in 2026-27, with ongoing funding of $19.2 million annually — for the CRA to “lift the moratorium on the penalties for failure to report fees for service transactions in the trucking industry and to implement a focused program that addresses non-compliance issues related to personal services businesses and reporting fees for service.”

On Oct. 28, IBC testified before the House of Commons Standing Committee on Transport, Infrastructure and Communities regarding issues impacting the commercial trucking sector.

“IBC made it clear to the members of Parliament that companies and drivers that are committing fraud under this scheme are hurting legitimate trucking businesses that follow the rules,” IBC says in the release. “IBC believes drivers who are improperly paid, undertrained and lacking appropriate qualifications pose a danger, not only to themselves but to everyone else on the road.

“They also contribute to cost pressures in the insurance system that impact everyone, as insurers continue to see a significant increase in the size and severity of insurance claims resulting from collisions.”

During the standing committee, Omole addressed insurers’ assessment of the validity of drivers’ licences.

“As it pertains to the validation of information, insurers go based off of what they are provided by their clients and by the insured specifically,” she says. “If they’re receiving falsified information, it is very difficult for them to have a good response to underwriting the risk. “Certainly, [insurers have] detected fraud. We’ve spoken to some of our members, and they’ve seen it already. We would want to see better quality information being provided.”

Training in focus

In recent years, trucking operators have seen significant challenges securing affordable commercial insurance premiums. IBC found fraud and lax enforcement by government agencies were not the only issues that contribute to the cost of insurance; a shortage of qualified, skilled drivers and inconsistent training standards also contributed.

An IBC-commissioned report in 2024 by professional services firm MNP found mandatory entry-level training programs for commercial truck drivers in many provinces and territories do not fully prepare drivers to operate a heavy truck in all conditions, and that additional onboarding and mentorship for drivers is needed.

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And as new drivers enter the profession, a higher standard of training is necessary to ensure goods are moved efficiently and safely. A driver’s completed level of training, the number of hours behind the wheel and claims histories are some of the key metrics insurers review when pricing a commercial truck insurance policy.

Jurisdictions across Canada have started to introduce mandatory entry-level training programs over the last few years, but the scope and hours of instruction vary by province and territory. IBC reports so far nine provinces and one territory have implemented some form of mandatory requirement, with Quebec the latest to announce its own program in November.

“The federal government’s move to tackle fraud is important, but more needs to be done across Canada to support a safe and prosperous commercial trucking industry,” IBC says. “With the current demand for commercial truck drivers, there is an opportunity to ensure that Canadian truck drivers are among the most skilled in the world.”

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.