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Trucking & transport
Owner-operators, carriers, freight brokers and trucking staffing agencies across Ontario. Equipment, meals, logbooks, HST on freight, and the classification questions that decide whether a driver belongs on payroll. Plus the T4A reporting that trucking businesses are now penalized for missing.
The genuine owner-operator, with their own truck, multiple customers and real commercial risk, has proper planning to be done.
The model is straightforward: a driver incorporates, the carrier pays the corporation rather than running payroll, and nobody remits source deductions. It is cheaper for the carrier, it looks like more money in hand for the driver, and it leaves the driver without EI, without CPP contributions and often without workers' compensation coverage.
Two separate exposures follow, and they land on different people.
The carrier faces reassessment if drivers treated as contractors are found to be employees, which generally means both sides of CPP and EI, plus interest and penalties, retroactively. The CRA looks at the substance of the arrangement rather than the paperwork: control over the work, who owns the truck, whether the driver can turn work down or send someone else, and who carries the risk of loss.
The incorporated driver faces the personal services business rules. Where a corporation is essentially providing one person's services to what would otherwise be their employer, it loses the small business deduction, pays an additional tax on top of that, and loses the ordinary business deductions almost entirely. Fuel, repairs and running costs are the ones that hurt, because a PSB cannot deduct them the way a normal corporation can.
This is not hypothetical. In a CRA pilot project, close to a third of the corporations reviewed were found to be personal services businesses, and more than three quarters of those had claimed a small business deduction they were not entitled to and had not paid the additional tax. On reassessment the bill was materially larger than what had been paid, before interest and penalties.
The part that matters if you are a legitimate owner-operator. The current audit activity is reportedly catching people it arguably should not. Drivers who own their truck outright, carry their own operating costs and take genuine financial risk are being reviewed, and in some cases reassessed, largely because they haul for a single carrier. Industry reporting describes auditors leaning on a short screening questionnaire about the relationship with the carrier, without asking about truck ownership, capital invested, who pays the running costs, or who wears the loss when a load goes wrong. Those are precisely the facts that ought to decide it. One Ontario owner-operator is reported to have had fuel, repair and other operating expenses denied, on a reassessment of roughly $130,000.
Which makes the practical advice unusually concrete. If you own your truck and haul for one carrier, assemble the evidence that you are running a business before anybody asks for it: how the equipment is owned and financed, who pays fuel, repairs and insurance, whether you are free to take other work and whether you have, who carries the loss on a bad load, and what your contract with the carrier actually says. Hauling for one customer is not by itself the test, but it is what draws the letter.
The same rules affect incorporated contractors in other industries. See incorporated professionals.
Reporting fees for services on a T4A has been in the Act for years and applies to every industry. From 2011 the CRA did not assess penalties for failing to do it, so most businesses never did.
In October 2025 the Department of Finance ended that moratorium for trucking, to address the Driver Inc model described above. The moratorium continues for other industries. Trucking is on its own here.
A business is treated as operating in the trucking industry where more than 50% of its gross revenue comes from trucking activities. That includes:
It does not include air, rail, water or pipeline transport, passenger transport of any kind, couriers and messengers, or warehousing and storage. Those remain subject to the reporting rule, but the penalty moratorium still covers them.
Payments over $500 in a calendar year for fees for services, made to a Canadian-controlled private corporation that is itself operating in the trucking industry, on box 048 of a T4A slip.
The part people get wrong. The service does not have to be a trucking service. If you are a trucking business and you pay a trucking CCPC for anything at all, whether that is hauling, dispatch, mechanical work or something unrelated, it is reportable once you pass $500. The test is who the parties are, not what was bought.
Where you cannot determine it, issuing the slip anyway protects you. Over-reporting carries no penalty. Under-reporting does.
T4A slips go to the payees and the summary goes to the CRA by the last day of February following the calendar year. The first affected year was 2025, with a filing deadline of 2 March 2026. The next is the 2026 calendar year, due at the end of February 2027.
Penalties for failing to file run from a few hundred dollars to several thousand, scaling with the number of slips missed. The larger risk is downstream: the CRA now receives a great deal of information about who is paying whom in this industry, and audit activity across income tax, HST and payroll is expected to follow it.
If you missed the March 2026 filing. You are not alone and it is not something to leave. Late filing reduces exposure and there are routes for coming forward, depending on the circumstances. See the Voluntary Disclosures Program, or just ring and we will work out where you stand.
For carriers and brokers: getting the T4A reporting set up so it runs each February instead of becoming a scramble, working out which payees are caught, and getting the payroll account and the business numbers in place before the deadline rather than during it. Reviewing driver arrangements before the CRA does.
For owner-operators: the return, the equipment decisions, the HST position, and a straight answer on incorporation. Plus bookkeeping that keeps up with a season rather than lagging it by six months. See bookkeeping.
If more than half your gross revenue comes from trucking activities, and you paid more than $500 in a calendar year to a Canadian-controlled private corporation that is also operating in the trucking industry, then yes, on box 048. This applies to any service you bought from them, not only trucking services.
Issue the slip. There is no penalty for reporting a payment that turned out not to require reporting, and there is a penalty for missing one that did.
No. Couriers and messengers, warehousing and storage, passenger transport, air, rail, water and pipeline are outside the trucking definition for this purpose. The underlying reporting rule still applies to them, but the penalty moratorium has not been lifted.
It depends entirely on the working arrangement. A genuine owner-operator with their own equipment and multiple customers is in a different position from a driver working exclusively for one carrier in that carrier's truck. The second case risks being a personal services business, which loses the small business deduction, attracts an additional tax and cannot deduct ordinary running costs. It is worth a conversation before incorporating rather than after.
You may receive attention, yes, and that is a live complaint in the industry at the moment. Hauling for a single customer is not the legal test, but it is what tends to prompt the review. What should decide it is whether you are genuinely in business: who owns and finances the truck, who pays fuel, repairs and insurance, whether you are free to take other work, and who bears the loss when something goes wrong. Get that documented now rather than after a letter arrives.
Get it looked at before somebody else does. The exposure is both sides of CPP and EI plus interest and penalties, going back, and this is precisely the arrangement the current enforcement is aimed at. There are ways to regularize it that are considerably better than waiting.
It depends on the haul. Domestic, international and interlined freight are treated differently, and many carriers end up in a refund position. It is worth confirming your registration and your treatment are both right, because errors here compound quietly over years.
This page describes the position in general terms as at August 2026 and is not advice for your business. The T4A reporting rules for trucking are new in enforcement and the CRA's guidance continues to develop, so check your own circumstances. The CRA's own guidance is the authority.
Whether you are a driver wondering whether to incorporate, or a carrier working out who needs a slip. Twenty minutes, no charge.
Call (905) 207-9639