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.
Noble1
Quote:
“The CTA announced the initiative on Dec. 18, releasing a package of materials for carriers and drivers to send members of Parliament. ”
Is there an unbiased proposed wage structure in that “package” that would increase truck driver wages ? If truck driver “wages” were increased ,ie: in regards to inflation since deregulation , it would be extremely prosperous for government in regards to a gain income taxes . Double the current truck driver wage . Render it a minimum wage for skilled labour in the trucking industry .
Not only will you attract more drivers , you will also create an incentive for them to drop the driver inc. model on their own . A “carrot” would be much more effective . In the construction industry there is a wage structure for “skilled” labour . Why isn’t there one in the trucking industry ???
In my humble opinion ………
Stephen Webster
I don’t know that drivers would go up a lot but some sort of minimum wage for truck drivers paid for all hours worked and this needs to apply to any one that doesn’t have third own running rights or a real interest o. The company with a Max of 30 such share holders.
Noble1
quote:
“I don’t know that drivers would go up ”
If wages increase driver interest increases . Economics 101 .
Same with rates . When rates increase it attracts an increase in capacity .
Example : If the price of oil(rate) increases , it attracts explorers & speculators to participate in that particular industry . Therefore interest & capacity increases . When the price(rate) of oil goes bust , it engenders a decrease in interest and capacity in that industry and sector .
Now why am I using the Oil market as an example ?
Bare with me and follow along .
Quote:
OPEC( Organization of the Petroleum Exporting Countries)
“The stated mission of the organization is to “coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry”
REQUOTE:
“ensure the stabilization of oil markets”
However, OPEC is a far cry from doing so . Rather than “stabilization” they contribute to booms & busts .
If we were to abolish the FAAAA act and introduce such an organization as an ethical ie; “OPEC” in the trucking industry that would stabilize rates & and supply & demand in regards to “capacity” , we would reduce the boom & bust cycle within the industry .
When demand increases , you gently increase capacity . When demand decreases , you gently remove capacity . In doing so you stabilize rates .
At that point we could then accomplish in the trucking industry what OPEC was suppose to accomplish in the Oil industry .
REQUOTE :
“coordinate and unify the petroleum(trucking policies) policies of its member countries and ensure the stabilization of oil markets(trucking/freight market), in order to secure an efficient, economic and regular supply of petroleum(trucks & drivers) to consumers(shipper & receivers ), a steady income to producers(Carriers, O/O’s, Drivers), and a fair return on capital for those investing in the petroleum(trucking) industry”
In my humble opinion ………..
Stephen Webster
It was their members who started to use it over 20 years ago
They think that the smaller trucking companies that use will go out of business and the drivers will come back
They also thought E-LOGS would bring the truck drivers back to the C T A membership. That did not work out for them
The solution is to pay all truck drivers on payroll by the hour at 1.6 times or more for local drivers and 1.9 times for O T R truck drivers and have them help out truck drivers when their members cheat them on pay and be able to go back 7 years.. Until they do this truck drivers will keep quiting for other jobs and younger people are told to get another line of work. P I said when speed limiters came to Ontario that truck drivers should be on payroll
At that time the O T A was against that and hourly pay