Manitoba Trucking Industry Exposed in Winnipeg Sun

In a recent Winnipeg Sun column, Kevin Klein reveals disturbing allegations about Manitoba’s trucking industry. Industry insiders describe an organized system of tax fraud, worker misclassification, and immigration abuse fueling a vast underground economy.

The federal Labour Market Impact Assessment (LMIA) program is allegedly being exploited to recruit vulnerable foreign drivers, some forced to pay up to $40,000 for closed work permits. Once in Canada, they are underpaid — sometimes just 7¢ per mile — and crammed into unsafe housing. One executive called it “modern-day slavery.”

Beyond financial fraud, public safety is at risk, with reports of fraudulent licences, minimal training, and carriers insured despite serious issues. Klein reports that insiders view this not as paperwork sloppiness but as organized crime. They are urging decisive government action to restore fairness and ensure road safety.

Here is the full article:

Organized crime alleged in trucking industry tied to labour and immigration abuse

Kevin Klein Winnipeg Sun column

A disturbing picture is emerging from inside Manitoba’s trucking industry, where industry veterans allege a sophisticated web of labour misclassification, immigration abuse, and tax evasion is fuelling an underground economy. According to those speaking out, the schemes are not isolated mistakes or accounting tricks but organized systems designed to strip millions from government coffers, exploit vulnerable workers, and put unsafe drivers on the road.

The practice begins with how drivers are classified. Under federal law, employees who drive company-owned trucks must be treated as employees, yet sources say many are deliberately misclassified as independent contractors. This tactic allows firms to avoid paying Canada Pension Plan, Employment Insurance, and workers’ compensation premiums. The cost advantage is substantial, with some insiders estimating companies are saving as much as 30 percent on labour. One executive put it bluntly: “It’s a whole scheme.”

The scale of the problem has already been measured. Manitoba’s Workers Compensation Board examined dozens of firms over a three-year period and identified more than $165 million in payroll that was concealed from proper reporting. That figure represents money never taxed and never subject to mandatory deductions. In the words of one insider, it was “money paid under the table to illegal subcontractors.”

The financial manipulation does not end there. Executives describe widespread exploitation of the federal Labour Market Impact Assessment program, originally designed to fill genuine labour shortages. The allegation is that drivers are recruited overseas and forced to pay up to $40,000 for the privilege of obtaining a closed work permit. Some carriers are said to be bringing in more than 100 drivers annually under this arrangement, amounting to millions in untaxed cash. To avoid detection, much of the money is allegedly moved into Canada through jewelry or gold.

A key part of the problem lies in the federal Labour Market Impact Assessment program, or LMIA. In theory, the LMIA is a document issued by the government that gives a business permission to hire a temporary foreign worker when no qualified Canadian is available. These permits are closed, meaning the worker cannot switch employers. In practice, industry insiders say the program has become a magnet for fraud and abuse, far removed from its original purpose of filling seasonal or specialized labour shortages. Instead of addressing genuine gaps, the LMIA has been twisted into a business model, exploited to recruit vulnerable workers from overseas while displacing Canadian labour. Even critics who support seasonal agricultural exemptions describe the program as a policy failure that invites corruption and mistreatment.

Once here, the drivers’ lives often bear little resemblance to the promises that brought them. Accounts describe as many as twenty men crammed into a single home, paid a fraction of the industry’s standard rate. While most Manitoba drivers earn between fifty-five and sixty-five cents per mile, some of these newcomers are paid as little as seven to twenty-one cents, an amount that can translate into just seven dollars an hour on long trips. Illegal deductions for food and accommodation can drive the pay even lower. Those inside the industry use harsh language for what is taking place. “It’s modern-day slavery,” one executive said.

These practices inevitably raise safety concerns. Many of the drivers brought in under these programs have only the minimum training required on paper, with little or no mentorship before they are sent on cross-country hauls. Insiders point to cases where licences were improperly issued or transferred from other provinces, and even instances where law enforcement found drivers carrying nothing more than a photocopy of someone else’s licence. This, they say, is not just an economic issue but a direct threat to public safety.

Manitoba Public Insurance has also come under fire. Insiders argue that MPI has insured carriers without adequate scrutiny, enabling questionable operators to stay on the road. For five years, MPI’s trucking division has reportedly run losses of about $30 million annually, a reversal from previous years when it was profitable. To make up for those losses, compliant operators are seeing their own premiums rise. “They’ve enabled bad actors and then raised premiums on the rest of us,” one carrier said.

The federal government’s role in over-supplying the labour pool is also in question. Industry data suggested Manitoba needed around 820 new drivers in 2024, yet more than 1,000 arrived through the LMIA program alone. That figure excludes other immigration pathways such as the Provincial Nominee Program. Industry leaders argue the labour projections are deeply flawed and easily exploited.

The situation is compounded by pressure from large shippers. Executives say that relentless demands for lower freight rates push companies to the cheapest carriers, regardless of whether those carriers are operating within the law. Some carriers have attempted to fight back, refusing to allow subcontracted fleets onto their property and educating shippers about the abuses tied to their supply chains. In some cases, the tactic has worked, with shippers redirecting business once confronted with evidence. But others, insiders say, continue to turn a blind eye.

Those familiar with the problem say the enforcement response has been fragmented and slow. The Canada Revenue Agency, Employment and Social Development Canada, and federal immigration authorities have all conducted audits, but insiders insist the scope of these investigations has been dwarfed by the scale of the schemes. Access-to-information requests on the Provincial Nominee Program can take months, often with names redacted unless charges are laid, leaving much of the problem hidden from public view. Meanwhile, the underground economy expands.

Industry executives are clear in how they describe the nature of what is unfolding. “If this were the United States, it would be a racketeering case,” one said. “This is a criminal enterprise, not paperwork sloppiness.” They argue that what may appear at first glance as tax avoidance is, in reality, organized crime: immigration fraud, human exploitation, money laundering, and a deliberate effort to evade the law.

At the same time, they caution against casting suspicion on all carriers or all new Canadians working in the sector. Many firms continue to comply with the law, and many newcomers are the victims of predatory recruitment rather than perpetrators. But the executives insist that policymakers and the public can no longer afford to ignore the growing evidence. “The freight will always move,” one carrier said. “The question is whether it moves legally and safely.”

Allegations summarized here are based on interviews with multiple trucking executives and internal industry figures, including reports from workers’ compensation authorities. The Winnipeg Sun has not independently verified all of the claims but has confirmed that investigations into several carriers are ongoing. A company we will not name at this time is alleged to be at the centre of multiple audits touching on labour, tax, and immigration compliance.

Insiders believe this is only the beginning. Their message is blunt: without decisive action, the incentives for exploitation will remain firmly in place. “Right now,” one executive said, “the math rewards lawlessness. That’s not a level playing field — and it’s not safe.”

The Winnipeg Sun will continue investigating this serious issue, exposing the abuse of Canada’s immigration system, the alleged tax evasion that robs taxpayers of billions, and the practices that amount to modern-day human slavery. This is not a story that ends here — it is one that demands accountability, and we intend to follow it wherever the evidence leads.

Visit www.lmiamap.org/ for a map that indicates where the LMIA program is used and provides an estimated number of LMIA employees.