CRA's PSB Crackdown Is Hitting Owner-Operators Who Did Everything Right
CRA has confirmed a focused audit program targeting trucking personal service businesses. One Ontario owner-operator was reassessed for roughly $130,000. Here's the test CRA applies, what it's costing drivers who did everything right, and what to have ready if the letter shows up.
The Canada Revenue Agency confirmed this month it has launched a focused compliance program targeting personal service businesses in the trucking industry. Incorporated owner-operators across the country are getting letters asking them to prove they aren't one. For a driver who owns his truck, files corporate returns every year, and has hauled for the same carrier for decades, that's not a paperwork inconvenience. It's a letter that can turn twenty years of clean bookkeeping into a six-figure reassessment.
Trucknews.com broke the story on July 10, following an earlier report on the same crackdown. CRA told the outlet the program follows funding in Budget 2025 that lifted a moratorium on penalties for unreported fees-for-service payments in trucking, and that it's now actively reviewing whether incorporated drivers are really running a business or just an employee relationship wearing a corporate structure.
What Makes a Trucking Corporation a Personal Service Business
A personal service business, or PSB, exists when the CRA decides that if your corporation didn't exist, you'd simply be an employee of the company paying you. The agency says it weighs the full picture rather than any single factor. But the two cases making headlines suggest that in practice, auditors are leaning hard on one thing: whether the owner-operator hauls for a single carrier.
Scott Taylor, vice president of Transport Financial Services, told trucknews.com his firm is currently handling six CRA reviews involving incorporated owner-operators who own their trucks but haul exclusively for one carrier. He argues that single-carrier hauling is normal in this industry, not a red flag, because owner-operators depend on a carrier's insurance, authority, and freight to operate at all. Truck ownership, fuel and repair costs, and the financial risk of the business tell a different story than the number of customers on the invoice. "You own the equipment. You have the risk of profit," he told the outlet.
One Ontario owner-operator represented by Taylor was reassessed for roughly $130,000 after CRA disallowed fuel, repair, and other operating expenses. A separate case involves a B.C. driver with more than 40 years in trucking and 28 years hauling for the same carrier under a Unifor agreement, incorporated since 2002, who received a request for information on June 30 asking him to prove his now-closed corporation wasn't a PSB. He'd sold his truck and semi-retired in October.
What a PSB Reassessment Costs You
If CRA reclassifies your corporation as a PSB, the tax treatment changes in ways that go well beyond a single reassessment year.
| Regular active business | Classified as a PSB | |
|---|---|---|
| Small business deduction | Eligible | Not eligible |
| General rate reduction | Eligible | Not eligible |
| Additional PSB tax (since 2016) | None | +5% |
| Rate basis | Reduced federal and provincial rate | Full federal and provincial rates |
Source: Canada Revenue Agency, personal services business guidance, current as of this writing.
That's the ongoing rate. Layered on top is the retroactive risk: a reassessment can disallow years of expense deductions all at once, which is how a $130,000 bill lands on one driver's desk in a single letter.
What to Do If You Get a CRA Letter
Kevin van Delden, an accountant with two incorporated trucking clients currently under review, says CRA auditors he's dealing with are focused heavily on the single-customer question while overlooking clearer signs of a real operating business, like a truck worth hundreds of thousands of dollars sitting on the corporate balance sheet along with real fuel, repair, and insurance expenses.
If you're incorporated and haul mostly or entirely for one carrier, the file to have ready isn't your T2. It's proof of the business risk CRA says it weighs but keeps under-applying: your truck lease or purchase agreement, a full year of operating expense records, and anything showing you could hire a second driver or walk to another carrier if you chose to. Taylor's firm is filing notices of objection for affected clients now and is asking other owner-operators who've received similar reviews to come forward.
If corporate structure and tax exposure are still an open question for your operation, [our post on incorporating vs. sole proprietorship for a Canadian owner-op] walks through the tradeoffs before CRA makes the call for you.
