CRA Is Tightening the Net: Trucking Corporations, Personal Service Corporations, and What Comes Next?

Over the last few years, the Canada Revenue Agency (CRA) has made it clear that certain sectors pose a higher risk of non-compliance. In December 2025, that focus sharpened further, with trucking corporations and personal service corporations (PSCs) moving squarely into CRA’s audit spotlight. The developments are not isolated actions—they are part of a broader, structured compliance strategy that will likely extend into real estate flipping and other cash-intensive or contractor-driven activities.

This article explains what triggered CRA’s renewed attention, what recent guidance and enforcement trends indicate, and what business owners should realistically expect in the months ahead.

Why Trucking Corporations Are Under CRA Scrutiny

The trucking industry has long relied on owner-operators, incorporated drivers, and subcontracting arrangements. While these structures are legitimate when properly set up, CRA audits have repeatedly found common issues:

• Misclassification of workers as independent contractors when, in substance, they operate like employees
• Income suppression, particularly in fuel surcharges, trip-based payments, or cash reimbursements
• Improper expense deductions, including personal use of vehicles and inflated per-diem claims
• Payroll non-compliance, where required withholdings were never remitted

In late 2025, CRA intensified reviews of trucking corporations that pay drivers through corporations or treat long-term drivers as “contractors” without meeting the legal tests of independence. These audits are not limited to corporate income tax—they often expand into CPP, EI, GST/HST, and penalties for gross negligence.

Mandatory T4A Reporting: A Major Red Flag Area

One of the most significant developments impacting trucking businesses is CRA’s aggressive enforcement of T4A reporting. Where a trucking corporation pays another incorporated driver, dispatcher, or owner-operator for services, CRA increasingly expects a T4A slip to be filed—unless the relationship is clearly outside reporting requirements.

Failure to file T4As now routinely triggers:

• Automated matching reviews
• Desk audits escalating into full-scope audits
• Penalties per slip, plus interest
• Broader reviews of worker classification and payroll compliance

For many trucking corporations, the T4A issue becomes the entry point for a much wider audit.

Personal Service Corporations: Still a High-Risk Target

Personal service corporations remain a long-standing CRA concern. Where a corporation essentially provides the services of one individual who would otherwise be an employee, CRA applies the Personal Services Business (PSB) rules aggressively.

The consequences are severe:

• Denial of most business expense deductions
• Corporate tax at the highest marginal rate
• Exposure to payroll reassessments if employee-like control is established

Recent audits show CRA is applying PSB analysis not only to IT and consulting, but also to dispatchers, logistics managers, safety officers, and specialized trucking roles operating through corporations.

What’s Next: CRA’s Focus on Property Flipping

The same compliance philosophy driving trucking audits is now being applied to real estate flipping. CRA has already expanded audit teams dedicated to short-term property dispositions, with key focus areas including:

• Misreporting business income as capital gains
• Use of multiple corporations or family members to disguise flipping activity
• GST/HST non-registration on taxable new housing or substantial renovations
• Improper use of the principal residence exemption

Just as with trucking, CRA is using data analytics, land registry matching, and lifestyle reviews to identify patterns. Once selected, audits can span multiple years and related parties.

How Bad Can CRA Audits Get?

For businesses caught unprepared, the impact can be serious:

• Multi-year reassessments
• Penalties up to 50% of understated tax
• Denial of input tax credits and deductions
• Personal director liability in extreme cases
• Cash-flow strain and banking relationship issues

CRA audits are rarely isolated events. Once a compliance issue is found, CRA often broadens the scope.

Audit Defense with Structure and Strategy

The key is not panic—it’s preparation. With the right documentation, legal positioning, and professional representation, many audits can be contained, negotiated, and resolved without long-term damage.

If you operate in trucking, professional services, or real estate, now is the time to assess your exposure—before CRA knocks on the door.

At Aaras Global, we work proactively and defensively with clients facing CRA scrutiny. Our strength lies in early risk identification, technical positioning, and structured audit responses. We assist with:

• CRA audit replies and information requests
• Worker classification and PSB exposure analysis
• T4A, payroll, and GST/HST remediation
• Pre-audit clean-ups and voluntary disclosures
• Strategic representation before CRA auditors

This article is only for the purpose of education and awareness. Please consult a professional before adopting the right strategy.

Author
Raman Nagpal
B.Com, CA, CMA, DISA.