Maple Leaf Motoring is a weekly rundown of developments in the world of Canadian transportation. This week: CTA launches Driver Inc campaign; Nova Scotia pulp mill closure set to hit trucking; and lumber mill bankruptcy reveals debt to transport and logistics companies.
The Canadian Trucking Alliance (CTA) has begun a campaign to pressure the federal government to crack down harder on Driver Inc., the practice of misclassifying employee drivers as contractors.
The CTA announced the initiative on Dec. 18, releasing a package of materials for carriers and drivers to send members of Parliament. The campaign seeks additional enforcement by the Canada Revenue Agency and federal labor regulators.
The association has increasingly targeted Driver Inc. in 2019, contending that the business model undercuts law-abiding carriers by avoiding taxes and other withholdings.
“The legal issues are clear and now the outstanding issue is the scale of the enforcement response from the Government of Canada,” CTA President Stephen Laskowski said in a statement.
The CTA said Driver inc has cost Canadian taxpayers at least C$1 billion. The practice is primarily concentrated in Ontario and Quebec.
Northern Pulp closure set to hit Nova Scotia trucking
Nova Scotia’s trucking industry is preparing to take a hit, with the closure of Northern Pulp looking increasingly imminent.
The pulp mill, responsible for about 170 truckloads per day, is set to close by Jan. 31 following a decision by Nova Scotia Premier Stephen McNeil. On Dec. 20, McNeil rejected a request for the plant to keep operating until a new treatment facility for its effluent waste product can be approved and built.
A report from Unifor, which represents plant workers, estimates that the plant generated about C$50 million per year in transportation-related spending. The plant receives an estimated 120 truckloads of wood chips and ships out 50 truckloads of finished pulp each day — some of which go to the Port of Halifax.
“It’s going to hurt,” Jean-Marc Picard, executive director of the Atlantic Provinces Trucking Association, told FreightWaves in August, amid cautious optimism that the provincial government would allow the plant to operate until it found a new solution for its waste.
“It could lead to closures unless these carriers are able to diversify. But they are hauling very specific products with very specific fleets,” Picard said in August.
McNeil said the province is starting a C$50 million transition fund to support displaced workers and others affected by the closure.
Troubled sawmill owes more than C$2 million to transport and logistics firms
Looking beyond Northern Pulp, these are tough times for anyone connected to the forestry industry.
To get a sense of a single plant’s impact on freight, look to the recent insolvency filing of Prendiville Industries, which owns a sawmill in Kenora, Ontario.
The company appears to owe at least C$2.5 million to transportation and logistics companies. The largest amount: about C$700,000 to Mullen Group’s (TSX:MTL) Gardewine.
It may not sound like a lot for a carrier owned by one of Canada’s largest trucking groups. But it’s not insignificant, considering Mullen’s trucking and logistics segment had an operating income of C$35.8 million on revenue of $222.2 million in the third quarter of 2019.
Mullen Group also highlighted Gardewine’s performance during the quarter. The Manitoba subsidy was a significant contributor to a C$6.7 increase in less-than-truckload revenue during the quarter, Mullen said.
