Temporary Foreign Worker Program compliance risks for Canadian trucking companies

Key Takeaways

• A recent investigation revealed a pattern of unsafe carriers being repeatedly approved to participate in the Temporary Foreign Worker Program (TFWP) notwithstanding their records of safety and labour violations.
• The decentralized nature of trucking regulation, split between federal and provincial authorities, can create oversight and enforcement gaps that some carriers exploit to circumvent compliance and gain access to the TFWP, underscoring the need for stronger oversight and enforcement mechanisms.
• Non-compliant employers may face significant consequences, including administrative monetary penalties of up to $100,000 per violation, to a maximum of $1,000,000 per year, a permanent ban from the TFWP, and the suspension or revocation of existing Labour Market Impact Assessments.

Labour shortages remain a concern for employers across many sectors in Canada. In response, programs such as the federal Temporary Foreign Worker Program (TFWP) allow employers to hire foreign workers to fill positions they have been unable to staff domestically. This is particularly prevalent in the trucking industry, where persistent driver shortages have led a growing number of carriers to rely on the TFWP.

Used properly, the TFWP is a legitimate and valuable program that supports both employers and workers. A recent Globe and Mail investigation, however, revealed that some unsafe trucking companies have been exploiting the program, participating in it while out of compliance with the trucking regulatory framework and, in a number of cases, engaging in unfair labour practices toward foreign workers.

For carriers that use the program in good faith, these findings are a timely reminder that what matters is not simply using the TFWP, but using it responsibly and in full compliance with the governing scheme to reduce the associated legal and reputational risk.

How the Temporary Foreign Worker Program (TFWP) works

The TFWP allows Canadian employers to hire foreign nationals for temporary positions where qualified Canadians and permanent residents are not available. The program is governed by the Immigration and Refugee Protection Act (IRPA) and the Immigration and Refugee Protection Regulations (IRPR), and is jointly administered by Employment and Social Development Canada (ESDC), Immigration, Refugees and Citizenship Canada, the Canada Border Services Agency, and the Ministère de l'Immigration, la Francisation et l'Intégration (MIFI) in Québec.

To participate in the TFWP, an employer must first determine whether the position it seeks to fill requires a Labour Market Impact Assessment (LMIA). An LMIA measures the effect that hiring a foreign national would have on the Canadian labour market. In assessing an LMIA application, ESDC considers labour market information for the occupation and the region, the employer's recruitment and advertising efforts, the wages and working conditions offered, evidence of a labour shortage, and any transfer of skills and knowledge to Canadians. A positive LMIA confirms both a genuine need for the foreign worker and the absence of an available Canadian citizen or permanent resident to fill the position.

Before applying for an LMIA, an employer must complete recruitment efforts and demonstrate that it has been unable to meet its labour needs domestically. Recruitment obligations vary based on applicable stream. At least one recruitment effort should remain active until ESDC issues a positive or negative LMIA decision.

Further, as part of the LMIA process, every job offer made by an employer through the TFWP must be assessed to ensure that the business and the offer are genuine and legitimate. To determine this, ESDC reviews the application and supporting documents to confirm that the business:

1. provides a good or a service in Canada;
2. offers employment consistent with the reasonable needs of the business;
3. can fulfill all terms of the job offer, including wages and other financial obligations; and
4. has no compliance issues.

All four factors must be met. Failure on any single factor will result in a negative LMIA decision.

Trucking applications have their own distinct documentary requirements. Regardless of the employer's history with the TFWP, every trucking application must include copies of:

1. a current National Safety Code (NSC) certificate or equivalent;
2. a current carrier profile or equivalent; and
3. fleet insurance.

The TFWP has become an increasingly important tool for the trucking industry, where employers have long struggled to recruit and retain qualified drivers in the face of growing demand. Federal approvals for temporary foreign truck driver positions rose from roughly 1,000 in 2016 to a peak of 8,500 in 2024.

Trucking regulatory framework

In Canada, trucking is regulated at the provincial, territorial, and federal levels, with jurisdiction turning on the geographic scope of the motor carrier’s operations. Operations confined to a single province are subject to provincial regulation under the authority of subsection 92(10), “Local Works and Undertakings,” of the Constitution Act, 1867.

Where a motor carrier undertaking operates across provincial boundaries, federal jurisdiction is engaged under the exception in the text of subsection 92(10), as confirmed by case law. Federal jurisdiction most commonly applies to extra-provincial bus and truck undertakings, whose operations extend beyond a single province.

Federal motor carrier undertakings are governed by the Motor Vehicle Transport Act (MVTA), which gives effect to the National Transportation Policy set out in the Canada Transportation Act and establishes a regulatory regime directed at motor carrier safety performance and the consistent application of operating standards across Canada.

Importantly, the MVTA delegates authority to provinces and territories to administer and govern the undertaking in a manner aligned with federal policy and the NSC. The NSC is not legally binding on its own. Rather, it establishes minimum performance standards agreed to by the federal, provincial, and territorial governments, which in turn inform the legislative and regulatory frameworks adopted in each jurisdiction and support greater consistency in motor carrier safety standards across Canada.

Extra-provincial carriers must also satisfy specific safety requirements. Section 7 of the MVTA prohibits any person from operating an extra-provincial motor carrier undertaking without a valid safety fitness certificate, or equivalent, issued by the appropriate provincial or territorial authority and requires compliance with all provincial or territorial laws respecting the safety of motor carrier undertakings.

While the decentralized structure of the trucking regulatory framework may promote administrative efficiency, it can also create oversight and enforcement gaps, particularly where information-sharing and compliance monitoring are fragmented across jurisdictions. These gaps are significant because they can be exploited by bad actors to circumvent regulatory compliance and may also undermine the proper assessment of a carrier’s suitability to participate in programs such as the TFWP.

What compliance risks do trucking employers face under the TFWP?

Oversight gaps and regulatory workarounds

Despite its well-intentioned purpose, the TFWP has attracted scrutiny for its exploitation by bad actors, particularly unsafe carriers within the trucking industry. Since 2019, nearly 100 trucking companies with histories of safety infractions, labour violations, and regulatory failures have been approved to hire foreign workers under the program.

One example identified a Manitoba carrier with persistent safety issues, including a fatal collision, that gained access to the TFWP after setting up a related carrier in Alberta. In another case, a Saskatchewan carrier whose safety fitness certificate had been revoked circumvented compliance requirements by re-registering in Alberta under the same name and ultimately secured approval to hire foreign workers.

These shortcomings are attributable, at least in part, to “weak enforcement and poor information sharing between jurisdictions,” which limit the effectiveness of regulatory oversight. Both instances call into question a system that permits non-compliant employers to hire from a pool of often vulnerable foreign workers, defeating the purpose of many of the guardrails built into the TFWP.

Misclassification and domestic recruitment concerns

The well-documented “Driver Inc.” scheme is another recurring source of concern. Under this model, carriers hire drivers, including those newly arrived in Canada, at low cost, often without adequate training, and then misclassify them as independent contractors rather than employees. This allows the carrier to avoid payroll taxes and remittances, effectively turning the arrangement into a tax avoidance scheme.

The consequences, however, extend beyond tax treatment. Misclassification deprives drivers of the protections owed to employees, including minimum wage, overtime and vacation pay, and occupational health and safety coverage. ESDC has emphasized that this kind of misclassification is illegal under the Canada Labour Code and has signalled heightened inspections in the trucking industry to address the practice.

Separate concerns have also emerged regarding the quality of domestic recruitment efforts under the TFWP. ESDC's most recent evaluation of the TFWP found that, between 2015 and 2018, of the job opportunities posted on the Job Bank and matched to prospective Canadian and permanent resident candidates, only 34% of employers reviewed those matches, and only 27% invited a matched candidate to apply. ESDC observed that this may indicate a very low level of compliance with the TFWP and its requirements.

Trends of this nature have led critics within the trucking industry to argue that poor minimum labour standards, including a lack of wage fairness and transparency, weak safety measures, and limited work-life balance, deter Canadians and permanent residents from these roles and allow carriers to fill the resulting vacancies through the TFWP while leaving such conditions unaddressed.

Worker vulnerability and unlawful fee practices

These market conditions can make it difficult to attract and retain drivers, and the resulting scarcity gives employers considerable leverage in hiring temporary foreign workers, heightening the risk of exploitation in the process. That risk is especially pronounced in regions facing acute driver shortages, where strong demand has increased both interest in the TFWP and the incidence of bad actors misusing the program. Reported abuses range from employers illegally charging newcomers thousands of dollars for a work permit or LMIA to promising a set number of hours and failing to deliver on that commitment.

A recent example of an employer illegally charging for TFWP requirements arose in Singh v Syndicate Transport Ltd. Singh, a foreign national hired by Syndicate as a long-haul truck driver, paid Syndicate $37,000 for the completion of an LMIA. The Alberta Court of Justice found that Syndicate was, in effect, selling LMIAs to foreign nationals so that they could obtain work permits.

Such a scheme is prohibited by the IRPR, which bars employers from directly or indirectly charging or recovering from a foreign national any recruitment fees or applicable ESDC processing fees. Singh sued to recover this payment, along with other amounts.

Ultimately, the court awarded no damages, finding that Singh had entered into the arrangement with full knowledge of its purpose. The court further held that restitution was unavailable because the contract was illegal, and that returning the payment would effectively sanction the sale of access to Canada's immigration process.

The decision illustrates the practical reality that foreign workers, often unfamiliar with the TFWP and its governing laws, may pay such fees in the hope of securing work, only to be left without a civil remedy or employment.

Conduct of this kind may often go unchallenged. Some immigration professionals note that foreign workers frequently stay silent for fear that speaking up could jeopardize their employment or their prospects of permanent residence, leaving abuses underreported and employers largely unaccountable.

This same concern was echoed in a report by the United Nations Special Rapporteur on contemporary forms of slavery, which described the TFWP as a “breeding ground for contemporary forms of slavery, as it institutionalizes asymmetries of power that favour employers and prevent workers from exercising their rights.”

Industry participants and associations have called for these misuses to be rooted out, cautioning that they undermine confidence in the trucking sector and damage the reputation of employers that use the TFWP lawfully and in good faith. Accordingly, the actions of a relatively small number of bad actors can taint perceptions of the TFWP across the industry. Thus, careful compliance and thoughtful use of the program are essential not only to lawful participation, but also to managing the accompanying reputational risks.

Risks of non-compliance and mitigation

In addition to the significant reputational risks associated with the misuse of the TFWP in the trucking industry, bad-faith use of the program may also expose employers to regulatory and, in some cases, criminal liability.

Under the IRPR, ESDC has broad authority to inspect employer compliance with the TFWP, including the terms of an LMIA decision and the treatment of temporary foreign workers for up to six years after the worker begins employment. As part of that process, ESDC may also interview temporary foreign workers to assess whether the employer has complied with the program’s requirements.

Where an inspection reveals non-compliance, employers may face serious consequences, including administrative monetary penalties of up to $100,000 per violation, to a maximum of $1 million per year, a permanent ban from the TFWP, publication of the employer’s name and address, and the suspension or revocation of previously issued LMIAs. Stricter pre-LMIA recruitment requirements and enhanced oversight measures have also been implemented.

Moreover, the federal government has signalled a more aggressive enforcement approach in response to concerns about non-compliance and the exploitation of vulnerable migrant workers.

In October 2025, the Department of Finance announced measures aimed at addressing the Driver Inc. scheme, including amendments to the Income Tax Act and the Excise Tax Act permitting the Canada Revenue Agency to share certain taxpayer and worker-classification information with ESDC to support enforcement efforts relating to driver misclassification. Those amendments have since taken effect.

In some cases, non-compliance may also intersect with criminal conduct. A recent example arose in Québec, where a Montréal driving instructor was found guilty of fabricating false Indian and Pakistani drivers’ licences and authentication documents for new immigrants.

The scheme reportedly took advantage of Ontario’s streamlined licensing process for drivers with at least two years of foreign trucking experience. The instructor was found guilty of forgery and trafficking in forged documents under the Criminal Code, with sentencing expected in mid-October.

Against this backdrop, trucking employers using the TFWP should approach both the LMIA process and the ongoing employment relationship with diligence and care.

Key safeguards include working with reputable recruiters, immigration representatives, and legal advisors who understand both the TFWP and the transportation sector, and ensuring that the wages, hours, duties, and working conditions set out in an LMIA application accurately reflect the terms that are ultimately implemented once employment begins.

Some employers have already adopted such best practices by taking a more hands-on approach to recruitment, including sending internal personnel to meet candidates in their home countries and conduct interviews and road tests directly.

Measures of this kind may help protect the integrity of the recruitment process and reduce the risk of misrepresentation or fraud for both employers and prospective workers. Taken together, these practices demonstrate that lawful, effective, and good-faith participation in the TFWP is achievable where employers adopt deliberate, well-documented measures aligned with the program’s legal requirements and intended purpose.

Looking forward

Notwithstanding its exploitation by a number of bad actors, the TFWP remains a legitimate and valuable tool for a trucking industry facing genuine and sustained driver shortages. What has changed is the level of regulatory tolerance for misuse of the program. With coordinated information-sharing efforts between regulators, heightened inspections, and stricter recruitment obligations, participation in the TFWP is assessed with greater rigour.

For trucking employers, robust and well-documented compliance at every stage of the TFWP is essential. Employers should aim to engage reputable recruiters and advisors, maintain active oversight of their hiring practices, and ensure that their obligations under the TFWP are met throughout the application process and the employment relationship.

As scrutiny intensifies, carriers that use the TFWP responsibly and in good faith will be better positioned to meet their labour needs while limiting legal and reputational concerns, supporting renewed confidence in the use of the program across the trucking sector.

TFWP compliance checklist for trucking employers

• Confirm your safety requirements. Make sure all required safety fitness certificates, carrier authorizations and other regulatory requirements are up to date.
• Keep your records in order. Maintain clear and complete records of recruitment,  advertising and compliance and make sure they can be easily accessed if needed.
• Make sure the job matches the LMIA. Check that the wages, duties, hours and working conditions you provide match what was set out in the LMIA application.
• Don’t pass costs on to workers. Recruitment, LMIA and related costs should never be recovered from temporary foreign workers, directly or indirectly.
• Review driver classification. Regularly confirm that drivers are properly classified and that your practices comply with applicable employment and tax laws.
• Work with experienced advisors. Consider engaging recruiters, immigration representatives, and legal advisors who understand both the TFWP and the trucking industry.

McCarthy Tétrault's Transportation & Logistics Group practices nationally, advising shippers, intermediaries, and carriers on all aspects of the transportation regulatory framework. For more information, please contact David F. Blair or Brian Allen Lipson.

McCarthy Tétrault's Immigration team, MT>iplus, advises organizations on Canadian and global immigration matters. For guidance tailored to your organization's unique needs, please contact Stéphane Duval or Chantal Arsenault.