Trucking Risk and Insurance Podcast

Navigating Controversy: Trucking and the Gig Economy with Mike McCarron

• John Farquhar & Chris Harris • Season 2 • Episode 77

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In this episode of the Trucking Risk and Insurance Podcast, we dive into the political landscape with guest Mike McCarron. Buckle up as we explore his candid opinions on the gig economy, trucking, and more. From supply chains to truth bombs, this episode promises to be both insightful and thought-provoking. Don’t miss it! 🚛🎙️

Mike McCarron
mike@riteroute.ca

You Hosts,
John Farquhar
Summit Risk Solutions: summitrisksolutions.ca
1 226 802-2762
John@summitrisksolutions.ca


Chris Harris
Safety Dawg Inc: safetydawg.com
Chris@SafetyDawg.com
1 905 973 7056


This week on the Trucking Risk and Insurance Podcast, we go political! We have our guest, Mr. Mike McCarron. He states a few views that might be controversial, truthful, and political. I think you're going to find this episode really interesting. Stay tuned. Here comes Mike.

Chris Harris, Safety Dawg 1:

Welcome to the Trekking Risk and Insurance Podcast. Mike McCarran, Ace. Welcome back to the Trucking Risk and Insurance Podcast. Can you, for our audience, introduce yourself, please?

Mike McCarron:

Uh, my name is Mike McCarran. I'm a columnist at today's Trucking Magazine. I'm a partner at Left Lane Associates, a supply chain M& A advisory firm. President of Right Root Solutions, which is a third party logistics company.

Chris Harris, Safety Dawg 1:

There you go. And from the latest reading, and I read it in Truck News, which of course is all part of the same organization that you are writing for, you have an opinion about the gig economy and how it all affects trucking. Do you want to elaborate on that?

Mike McCarron:

Absolutely. It's nice to know that someone reads the column, so thanks Chris. I think the first thing to mention is that I'm absolutely against people not paying source deductions. I don't like it. It absolutely freaks me. I think of the taxes I've paid over the years, both personally and corporately, and I really struggle with people not paying their taxes, but I think in reality there comes a point where we have to accept the fact that This gig economy is not going anywhere. I had the pleasure of, uh, you know, being up in Ottawa recently with some business friends. We met, uh, some private members of the Liberal Caucus and, you know, it became pretty clear that, uh, the Liberals have bought this economy so bad, uh, under Trudeau's leadership that the only way to grow the gross domestic product is through immigration. It so happens that a lot of that immigration is coming from South Asia. They happen to like the trucking business. So that's their industry of choice. And I just, it's just not going away. And they made that pretty clear to us. And, you know, I, I cited in that column, a recent report from HR Block where. There's almost 8 million Canadians, uh, making a living in the gig economy. I absolutely lost my mind when I read that a lot of them don't want to pay their taxes. Um, and I think a lot of them, frankly, are working in the gig economy to create multiple income streams just to kind of throw the scent off at CRA. So, um

Chris Harris, Safety Dawg 1:

One of the things in that article, sorry, in the H& R Block thing, and I Forgive me if I get the number wrong. It was close to 50 percent. I think it was 44 percent. It said that the workers in the gig economy, many of them are willing to hide their income.

Mike McCarron:

That's that's right. It just drives me insane because I look at the taxes that we're paying, what I've paid in the past, and You know, it's important to understand that I don't support this at all. And like my peers, my legacy carers, I would be infuriated. But the reality is, is that, you know, we, I believe we played by the government. Um, I believe that, uh, they have been straight with us. I think there comes a point where, you know, both sides of this fence have to get together and really focus on the real enemy, which is the government. To bring some clarity, just tell us what's right and what's wrong so we can react accordingly. This limbo land doesn't hurt anyone. It's bad for the economy and it's bad for truckers who, you know, as I said, don't really understand what they can and can't do because they've been. They've been played by the government. I really believe that. Well, and

Chris Harris, Safety Dawg 1:

I like the point that you had made, um, in the article where I believe it's CTA was running ads. And, you know, the ad said something about, hey, come work for trucking. We've got great work with benefits and all that kind of stuff. And then what happens,

Mike McCarron:

Mike? Well, what happens is that to the outside world, a trucking company's a trucking company. They have no idea that, you know, there's really two industries operating within one industry, the legacy and the newcomer care. So they go and they, uh, they run out and they, uh, go to three or four interviews and, you know, all these promises that were made of stable income benefits, unemployment insurance, vacation pay, good work environment. Safety. Training. Um, they've seen none of that. Uh, you know, so they show up at the interview and you gotta incorporate, uh, we're gonna teach you, we're gonna, we're gonna spend 50 hours teaching how to drive a truck which is basically enough to, uh, which is basically enough to pass your license. And then we're gonna throw you in a truck and you gotta drive to Vancouver by yourself in the winter. And I had an Uber driver, ironically, coming back from the OTA convention telling me that was an experience. So, That's just back to the brand of trucking. Uh, you know, I always, I've always said that your brand is what people say about you when you leave the room. And so, you know, they would have friends in a certain position that don't even bother applying because you know, what they basically are saying is that. These truckers, they're, they're not, they're breaking their promises. They promised this and they're delivering something else. And that's not a good thing for anyone.

John Farquhar, Summit Risk Solutions:

It's really sad, you know, to see this because one of the, one of the biggest dilemmas, the thing that helps run this country is our tax base. Right? We, we all contribute to that tax base so that we can have streetlights, you know, uh, police that, uh, that help to protect us, schools, um, all, all this infrastructure that we need to have a really nice life to live on. And unfortunately, when we don't have everybody paying into the system, there are others that are going to pay way, way more.

Mike McCarron:

A hundred percent. Look at the, look at the deficit that's being run under Trudeau. It's mind boggling. There's no tax revenue. They're not collecting what's owed. There's. Yeah, I can't remember the exact stat, but I think there's like 28 billion dollars here not getting collected. Don't hold me to that, but it's a staggering number and just, just to allow this to happen. But I was gonna say, there come a point where, you know, you've got election coming up and it's all about growth and, and to think that a resource driven economy like ours. We have to resort to this. So you look at something else that's interesting. So what's happening now is this nearshoring where, you know, during COVID, uh, you know, prior to COVID all the rage was, you know, let's single source and make product cheap and China and Singapore and Vietnam. And, you know, obviously, uh, people realize during COVID that that's probably not the best, you know, people, you need product near, uh, supply chain disruption and it's, it's all coming back to North America. But it's not coming to Canada. No,

John Farquhar, Summit Risk Solutions:

no. And I was going to say some of the stuff that I've heard through the grapevine. So a couple of different things, which aren't helping the situation by any means. So during, during the pandemic, uh, we had the government paying out on CERB benefits, and I know for a fact that we're a number of. Gig operators, and not just in trucking, but other industries as well, that collected CERB benefits. And sadly, they weren't eligible, because they weren't paying into the system anyway. But because the government didn't have any, um, any checks and balances in place at the time, they just threw money out. These people collected. And, um, a few of them have left and gone back home to their home country. You know, and now somebody's looking to get that money recouped. So, but another one that is a real thorn in my side, um, to kind of touch on exactly where you're going, Mike, is the HST. So, a lot of gig operators are charging HST to their company, but they're not submitting it to CRA. And I'm like going, Whoa, Whoa, Whoa, Whoa, here. You just took a 13 percent rate increase when you shouldn't have been. So, and I really, I really questioned why the government isn't auditing from that end coming up.

Chris Harris, Safety Dawg 1:

And let's just be clear that we're not just trucking, talking about trucking. No, we're talking in general, the gig economy when Mike says 28 billion, not collected. Yeah.

Mike McCarron:

And that's where it's compounded because. No one can get workers. I think trucking gets it worse because it has it a worse problem because so many South Asians, which is a lot of the immigration, want to be in the transportation business, they've got the routes that, you know, they've got family and friends, uh, places they worship, uh, you know, in, in Surrey, BC and, and, and, and, and Brampton, uh, there's no such thing as a T4. And so that's the part that drives me insane is. You know that these people aren't contributing. They come to this country and they're not contributing uh to that and it's unacceptable but as I said there comes a point I think for the trucking industry where you know the leaders on both sides have to understand that being a part and and I don't put this on the associations. I think that the Laskowski He's done a great job trying to reach out. Um, but it's a big carriers of leverage that are giving these people business. And, and, and, and, and, you know, I think that there's a lot of really good, a lot of transforming X gig, uh, companies are no longer, but a lot of big ones are, and I just think they've got to realize, I think they want some clarity too. And I just think that. When you have two factions working against each other, you're letting the government off easy, and I think that, um, it's strength in numbers, and, and, you know, neither one of them really represents the trucking industry anymore. I think that the politicians are aware of that. Uh, they don't really think of drivering as anything but the gig economy, and I think it's the only way you're ever going to give clarity to, uh, Canadian, you know, Canadian businessmen that are paying their taxes, and are paying their taxes, and are training their drivers, and are updating their equipment, and it just goes on and on and on.

Chris Harris, Safety Dawg 1:

Well, I wonder how it's going to affect our Canadian government. The recent stance that the, uh, Biden administration took, where they appear to be cracking down on the independent operator, and, of course, um, Not everybody's happy with that stance, but how might that translate into Canadian? Will our government stand up and listen? And we often mirror what happens in the U. S. Well, so that's a great

Mike McCarron:

question. So I find a couple of things interesting about that. You know, I don't think, first of all, kudos to Biden for doing that. I frankly don't think it's a bigger problem in the United States than trucking business, uh, the economy. But I don't think the government, the, the, the, certainly the input that we got, the businessmen I was with from prominent members of the liberal caucus was they have absolutely no desire to chase independent contractors, zero. But what I do find interesting is, you know, the ATA. And both the TCA, uh, went on record recently, in early January, to say that they oppose, uh, Biden's ruling, which is talks of an independent contractor. So, it goes, certainly goes against what the Canadian, uh, uh, legacy and associates are saying. But interestingly enough, there's a lot of Canadian leaders that TCA. So it will be really interesting to see, because it's a real different stance. You know, just my opinion, I think that's their way of saying that, recognizing that we have a huge driver shortage problem and that's the only way that this can happen. The only thing I can think of is that, you know, with the U. S. being very political, uh, the TCA and truck owners are Republicans. So, you know, when you're dealing with the States, there's always a political oversight. So, my take of the United States these days is that It's very hard to apply rational thinking sometimes to irrational thinking and, um, I don't know what's driving that, but it's very interesting to stance. It's very interesting to me. Yeah.

John Farquhar, Summit Risk Solutions:

Well, one of the other things that we're noticing is we're losing drivers. Um, attrition is one issue. So guys are retiring and whatnot, but we're also seeing a lot of drivers that are just sick of the industry now. Um, lack of pay, lack of adequate pay, um, lack of training. Uh, I think we're seeing a lot of senior drivers, very well experienced and seasoned drivers, that are just afraid to be on the road anymore because we're, a lot of these companies are quick to just throw a driver in the truck and send him to Vancouver when he's got no previous experience. And now these guys are going, I don't want to risk my life because of the other driver. So that's causing us a grief.

Mike McCarron:

Well, I agree. You know, I think when a professional driver watches his peers that are having trouble backing in to a warehouse, knowing that They're hooking and going to California. I'd be terrified too. And I think to your point, John, I talk to every Uber driver whose Uber I get in. And you know how many of them have awful experiences in trucking? It's embarrassing. Yeah, I can just

John Farquhar, Summit Risk Solutions:

imagine. I've

Mike McCarron:

tried to get a couple going on record for my column and they don't want anything to do with it.

John Farquhar, Summit Risk Solutions:

Well, you know, back in the day, and I'll use, you know, when I, when I was growing up as a young lad, and I was driving in the, in the early 80s there, um, It was a different mindset back then. It was a career. You know, my family was truck drivers. My grandfather, my uncles, my dad, you know. So it's like, yeah, I want to be a truck driver. And this was a career model. This wasn't just a job. You know, and you took that to heart and the way you went. If you weren't good when you started, well, no problem. You practiced. You got out there. You, you, you, the company you were working for would say, cool, go out in the yard and just back trailers in. That'll teach you how to back up. Go talk to Bob here. Bob will give you some tips on what to do. I don't see that anymore. And I don't see anybody wanting to, you know, bend over backwards and give that assistance. It's more the companies are more, go, you got to get in the truck. I'm paying you. Go, go, go, go, go.

Mike McCarron:

I think the legacy carriers are doing a great job of training. I think they're, that's, the drivers are safer than ever, but There's less and less of them. And, you know, I pushed really hard when I was chairman of, uh, Trucking HR Canada to make driving a skilled labor. You need to get a license to be a hairdresser, to frame a house. Um, but the problem we have is the industry. And once again, largely driven by newcomers, they advertise as don't need any skills. And so when the government sees that, they're saying. Your registry is saying that you don't need skills, but you're saying you need skills.

Chris Harris, Safety Dawg 1:

And we're saying it's a skilled job to be a truck driver. Let's

John Farquhar, Summit Risk Solutions:

take that, let's take that analogy you just used because I did some research about a year ago on this. So the hairdresser, in order to be a hairdresser in Canada, you have to have a license, right? And you have to obtain what's called your Red Seal Certificate. Well, interesting enough. It's, it, it, it takes almost 4, 000 hours to get your hair certificate. And, you know, four, 400 of those hours are done in the beginning in a classroom environment, and then the rest of it is done through an apprenticeship program to cut hair. Yet I can go just take a hundred and three and a half hour course here in Ontario And I can get my truck driving license and I can drive an 80, 000 pound missile down the road What's wrong with this situation?

Mike McCarron:

It's absurd like think of a hairdresser. So the worst case area cut some of zero off big deal. Yeah. Yeah

John Farquhar, Summit Risk Solutions:

I'm gonna be okay

Chris Harris, Safety Dawg 1:

in the trucking industry. The worst case scenario is Humboldt Yes.

Mike McCarron:

Yes. Oh my God. Yes. No, it's, as I said, it's, it's a very, and it's getting worse and it's getting worse and, you know, that's one reason I talked about this getting together because to me, the taxes you can't control, uh, you can fight government. You get to force them to make a decision. And that's all we want as businessmen. Tell me what I can and can't do. Get me out of limbo land. But the focus should be on the unsafe roads, the immigration scams, the human resources scams. It's mind boggling what's going on. You know, I know a lot of the gig operators, you know, we use them a lot in Wright Route. They're some fantastic people, some good businessmen, but I just wish they would pay their taxes, but they're embarrassed by their underbelly. They know it's criminal and yeah they're just not and to me that's not doing anybody's travesties a travesty itself.

Chris Harris, Safety Dawg 1:

I wonder, you know, in the gig economy, far more, or far wider than just trucking, what does CRA do to see if they're actually issuing T4A slips, like CRA says they're supposed to? Do you know if there's any audit process, Mike?

Mike McCarron:

No, I don't think so. Based on the lack of funds that are being collected. I don't know anyone that's been audited. I don't know anyone that's been fined. Like, you know, you think of their fine system. It's hilarious. So they have this big announcement, Seamus O'Regan. Oh, we're going to, that was the enforcement one. We're going to fine. We're going to fine any people that don't pay their source deductions 250 grand. It doesn't matter how many trucks you have, which is absurd, but you do the math on that. So based on what I read from some very reputable truckers, they believe that not paying source deductions presents about a 20 percent cost saving, meaning that the level they have an unfair advantage with 20%. So do a mid sized truck running legal these days. Couple hundred thousand miles. That's 40, 000 a truck. So that tells me that as long as you have six trucks, more than six trucks as independent contractors, you're making money. So you can get, you know, there's, there's, there's gig economy cares that are three, four or 500 million now. It's just a recruiting cost. It's the cost of doing business. The owner's expense account is bigger than that.

John Farquhar, Summit Risk Solutions:

I was, I had the, uh, the opportunity to speak with some folks from ESDC and, and sadly, the 250, 000 fine is highly unlikely to be reached or offered from what they told me, because. The first visit, if they're going in to do a, an audit or an inspection, the first visit is going to be educational. There's no fines. It's all educational and they're going to be advising you what you need to be doing. And then they'll come back in 30 days and see if you're doing it. And if they're not, well, then there's a small penalty somewhere around five, maybe 10, 000. And then from there it goes to court. And you know, it, it takes several, several visits of this person, not, or this company, not following the rule. Before they would ever get to 250, 000. And they say it would probably take several years before they would actually issue a fine that high. Uh, they were talking, they were talking about two audits they were working on, which, uh, each company was fined a total of 20, 000 each.

Mike McCarron:

And even in the worst case scenario that they shut them down, the driver is just going to work for someone else. It's absolutely, it's pandering to the Nth degree. Just absolute pandering. And that's what has to stop. And the only way I think that's going to stop is the big guys. The big carriers have to get together and force, force a decision. Our country is going to get at this stage, you know, that article from H& R Block basically stated that the gig economy has doubled in the past year. We're going to be bankrupt. We're going to be Argentina. How do you run, how do you run a country when the, when, when, when people aren't paying their fair share of taxes?

Chris Harris, Safety Dawg 1:

Exactly. And it said in the article that a good part, part of that, they were doing it so that they didn't have to pay taxes. Amen. About 50%. So, and I'll put a link to that article in the show notes down below, because I found it really enlightening. The rapid growth of the gig economy and the tax implications of that economy. Um, and it's something I think we should all be concerned, at least. All legal taxpaying people should be concerned about.

Mike McCarron:

100%. I'm very concerned. You know, when you have 28 percent of your employees engaging in activities that don't pay taxes. Um, and it's doubling every year. Um, you have a problem in it. They're just like When we went to Ottawa, like, it's like they brush it off like it's nothing. And if you You know, I can't say this with you, but these are far more important senior people than I am. You know, they're facing the same challenges in theirs and in their industries. And the one thing that we learned in Ottawa was that Trudeau is God and what he says goes. And it's all about getting, it's just about getting re elected. You know, it's why they legalize pot because they want to get the use. So it's about getting re elected. And you know, I thought his old man was bad. He is 10 times worse. It's, it's just, I just don't know how they could continue to run this economy in this country with such a deficit, which so many people are just throwing a blind eye to their, their, their fiduciary of just. Well,

John Farquhar, Summit Risk Solutions:

it's just going to get worse for the simple fact that if you've got young people in this gig approach, and they're wanting this gig approach to put more money in their own pocket, I have my doubts they're investing it into their retirement savings plans. Um, and therefore, without doing your tax deductions, you're not submitting to CPP as well. Uh, so as these folks get older. That's gonna put a larger burden on this country, um, to try and deal with social services down the road when they get sick and healthy and, you know, you're not contributing. So now our, our health care program is going to be falling apart. We're not going to have money to support it.

Chris Harris, Safety Dawg 1:

Sorry, what do you mean it our health care program is going to be falling apart?

John Farquhar, Summit Risk Solutions:

Well, yeah more than what it is already Which is

Chris Harris, Safety Dawg 1:

largely a provincial problem, but they get a lot of their funds from the federal government, but anything else This is you know, we got to wrap this up in a few minutes The gig economy. I think we all agree is hurting Canadians, generally, and really hurting tax paying Canadians. Absolutely. Mike, did we cover everything that you wanted to hit? And I know we had that technical difficulty in the middle, but uh, did we hit all the topics that you wanted to address?

Mike McCarron:

Oh, I think so. You know, the bottom line is I think that at the end of the day, you know, all we ask for as Canadians All's we ask for is tax paying Canadians. All's we ask for as a trucking industry is give us some clarity. Uh, don't pander. And let us know what we need to do properly to run our business. And that's just not happening. And I call on our great friends in the trucking industry to step up. To really focus on the real enemy. Because the enemy that they're focusing on is doing something that I don't agree with. But they're taking advantage of lack of enforcement. And, you know, we really need to focus on who's causing this, which is our folks in Ottawa.

Chris Harris, Safety Dawg 1:

Yeah, I was going to say the gig economy is not going anywhere soon, but it would be nice if it was taxed appropriately. Fair taxes. Hey, Mike, I really appreciate this. This was, um, a politically charged.

Mike McCarron:

Take care. Great talking to you, pal. Take care.

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