CTA Warns Banks of Risks of Lending to Illicit Carriers

Source: Canadian Trucking Alliance (CTA) 

The Canadian Trucking Alliance (CTA) is warning Canadian financial institutions about the dangers of lending to trucking companies operating in the underground economy.

This follows news that the Bank of Montreal (BMO) has updated its mortgage policies for self-employed borrowers in sectors affected by the ongoing tariff wars. In a recent memo to brokers, BMO announced tighter lending criteria for borrowers in these high-risk sectors.

In response, CTA contacted the Canadian Bankers Association (CBA) to caution lenders and distinguish between legitimate small businesses and illicit carriers that flout tax and labour regulations. While Statistics Canada ranks general freight transportation as the 10th largest sector with self-employed workers, CTA insists this figure doesn’t reflect the true risk level for lenders.

CTA President Stephen Laskowski emphasized that legitimate owner-operators who manage their equipment and business expenses responsibly should not be penalized. The real concern lies with those using the “Driver Inc.” scheme to misclassify employees as independent contractors—or, in many cases, not file taxes at all.

The CTA points to recent federal actions, including the formation of a misclassification enforcement team at Employment and Social Development Canada (ESDC), and a new information-sharing agreement between ESDC and the Canada Revenue Agency (CRA) to crack down on tax and labour violations.

“The trade war is financially straining our industry,” said Laskowski. “But lenders shouldn’t worry about compliant businesses. The real exposure lies in lending to companies built on illegitimate practices. It’s time for banks to understand the real risks involved in doing business with underground operators.”