Reporting Fees and the Trucking Industry

Ruth Horst

The CRA requires companies to issue T4A slips reporting fees-for-service payments made to subcontractors. Given the breadth and administrative burden of this requirement, the CRA introduced a temporary moratorium on penalties for failure to file in 2011. But things have changed now, in particular for the trucking industry.

The Backdrop. Many trucking companies require their drivers to incorporate—typically as Canadian-controlled private corporations (CCPCs)—as a condition of work.

However, a corporation that effectively functions as an incorporated employee is considered a Personal Services Business (PSB) by the CRA. A PSB exists where a CCPC provides services to a client and the individual would otherwise be considered an employee if the corporation did not exist. In essence, a PSB is an “incorporated employee,” allowing the employer to avoid payroll deduction obligations. A PSB also has five or fewer employees.

Personal Services Businesses, though incorporated in Canada, lose many of the benefits of incorporation. They do not qualify for the small business deduction, are subject to full federal and provincial corporate tax rates, face an additional 5% federal tax on income, and have limited allowable deductions.

As a result, many truck drivers are now being placed at a financial disadvantage.

What has Changed: On December 4th, 2025, the CRA announce the lifting of the moratorium for the trucking industry. As a result, trucking businesses that make fees-for-service payments exceeding $500 to a CCPC are now required to issue T4A slips for the 2025 tax year and onward. The filing deadline for the 2025 T4A slips is March 2nd, 2026. Although the standard deadline is February 28th, it falls on a Saturday in 2026, extending the due date to the next business day. Late-filing penalties for failure to file those slips range from $100 to $7,500.

Why has it Changed: The CRA has lifted the moratorium on penalties for failing to report these fees to address non-compliance involving personal services businesses. These changes are intended to improve compliance in the trucking industry and restore fairness within the tax system.

CRA’s determination of a Business in the Trucking Industry: According to the CRA, a business is considered to be operating a trucking business if its primary source of income—more than 50%—is derived from trucking activities.

Trucking activities do not include transit or ground passenger transportation; air, rail, or water transportation; pipeline transportation; postal or courier services; warehousing and storage; or support activities for transportation.

The Bottom Line: The March 2nd, 2026 deadline for filing T4A slips in the transportation industry is approaching quickly. To ensure compliance and avoid penalties, transportation companies required to issue T4As must maintain complete and accurate records of annual payments made to each service provider. Each T4A must contain full identification details, including the provider’s legal name, address, and tax identification number. Missing or incomplete information does not eliminate the filing requirement.

Meanwhile, CRA audit activity is expected to increase in early 2026. Are the people hired to do the work employees, unincorporated subcontractors or incorporated companies that are – or are not – personal services businesses? That determination needs to be made. The firms that “employ” them will need to rethink the terms of engagement as well. Payroll source remittances are required for employees.  

Meanwhile, truckers who have been misclassifying as PSB may find themselves owing significant sums to CRA in the future. Professionals should be prepared to work with these clients to sort through the new administrative procedures and mitigate costs.