Governments on both sides of the border are tightening oversight of commercial drivers. Canada’s latest budget proposes new enforcement measures targeting the misclassification of drivers, while California is preparing to revoke thousands of commercial driver’s licenses to align with federal rules on work authorization—moves that follow heightened scrutiny after recent fatal crashes.
Canada targets driver misclassification in budget measures
The federal budget includes steps to crack down on the misclassification of truck drivers, including lifting a longstanding moratorium on issuing T4A slips tied to driver payments and enabling the Canada Revenue Agency (CRA) to share information with Employment and Social Development Canada (ESDC). Critics often refer to misclassification schemes as “Driver Inc.” when employers treat drivers as incorporated contractors to avoid employment obligations.
Industry advocates stress that incorporation itself is not illegal and argue that recent narratives risk casting all independent and incorporated drivers as noncompliant. The Canadian Trucking Organizations Alliance (CTOA) maintains the core issue is tax compliance and education, citing CRA comments at a November 2025 transport committee meeting.
California moves to revoke CDLs under federal pressure
Sacramento officials say California will begin revoking up to 17,000 commercial driver’s licenses in January, affecting drivers who do not have permanent work authorization. The action follows federal pressure to comply with new U.S. Department of Transportation rules overseen by the Federal Motor Carrier Safety Administration (FMCSA) regarding license eligibility and status verification.
In a letter sent last week, FMCSA said a recent collision “may have been avoided” had California complied with the new federal rules. The agency also warned that full compliance could ultimately affect as many as 61,000 CDL holders in the state. Publication of the interim federal rule has fueled debate in California and beyond.
Fatal crashes intensify scrutiny
Policy debates accelerated following high-profile cases. Authorities say an August 12 crash on Florida’s Turnpike occurred when a driver, who was licensed in California and alleged to be in the country without legal status, made an illegal U-turn in front of a minivan, resulting in three deaths. In a separate October incident in Ontario, Canada, a truck-involved collision killed three people; federal authorities alleged the driver did not have legal status.
Industry perspective and next steps
While critics of misclassification push for stronger enforcement, industry groups caution against conflating independent contractor status with illegality. They argue that proper tax compliance, verification, and education should remain the focus as governments implement new measures.
Neither the Canadian budget provisions nor the U.S. rule changes have been fully detailed in final guidance. Carriers and drivers are watching for implementation timelines, enforcement protocols, and any clarifications from CRA, ESDC, and FMCSA in the months ahead.