Over the Road December 2022

Robert D. Scheper

Making Your Miles Count PODCAST

Beginning in January 2023 and in association with Over the Road Magazine, Making Your Miles Count will be producing a PODCAST to serve Canadian Truck Drivers and Operators. I have been researching topics and formats parttime for over two years. I’ve outlined six topics so far, two in each month of September, October and November. December will be the last article introducing these programs.

7. What should a person NOT DO to be successful?

Charley Munger spoke at Harvard’s 1986 graduation; at which time his own son was honoured. He took an example from Johnny Carson’s speech entitled “How to guarantee misery”. Johnny’s three points were: Ingest chemicals to alter mood or perception, embrace envy and become resentful. Charley proceeded to expand that base: be unreliable, learn only from your own experience (ignoring the mistakes and lessons of others), when you go down stay down don’t get back up and try some more, and finally Don’t invert your problems into things to avoid. Similar to ‘what NOT TO DO to be successful’, we should learn to avoid what causes failure. Social media is loaded with people telling us what to do, but not many telling us what to avoid. If you have a problem, invert the proposed solution into the things to avoid doing, so that the problem doesn’t occur again.

Just because marijuana is legal for recreational use does not mean it’s a good idea to aid in becoming successful. Our society allows for foolishness, and we must learn what to avoid to become successful. The practice of avoiding harmful behavior can often come across as “legalistic”, “restrictive” or even “religious” but nevertheless, produces a safe environment to harvest success.

Financial freedom is more than just working hard and raking in cash… it’s also about

restraint, discipline and staying away from things that erode the benefit of hard work. Inverting the solution to your problem is a method of safeguarding your efforts.

I had a client who was probably one of the hardest working drivers I’ve known. The client maxed their log, maxed their preparations and hardly ever stopped their efforts to make money. With only that outline, the assumption was they should be very wealthy. But they were not. The operator had a gambling problem. It was uncontrollable (at least from where I stood). It was like they worked as hard as they could to support their gambling habit. The outcome, of course, is not hard to foresee. When they lost their truck, the explanation was that they had a higher-than-normal maintenance bill. Of course, that was not the full truth, but it certainly painted a justifiable demise. It scared many potential operators from believing in the benefits of a hard work ethic. “If he couldn’t make it, who can?”, was the word on the street. There are so many half-told stories that it’s difficult to determine reality. Sometimes it’s doing the “do not’s” that causes failure, not just “not doing enough” of the do’s.

8. Stay away from schemes (get rich quick or otherwise)

The Driver Inc. format has been on the radar for several years now. Trying to understand why someone would embrace an incorporated employment scheme is a little convoluted. It comes from two primary beliefs: it will reduce taxes, and it may be the only way to secure a job in the industry. Both beliefs have (or had) a measure of truth to them.

Canada has a self-proclaiming model of tax reporting. Taxpayers submit their returns under the honour system. If the return is found to be untruthful, it will be reversed. CRA has a very detailed method of finding out the truth… it is

MAKING YOUR MILES COUNT

6 • OVER THE ROAD DECEMBER 2022

slow but once focused, very decisive. On average 15% of self-employed people are audited but only 5% of corporations. That means that 95% of corporations are accepted as filed. The historical assumption is that the incorporation process is too complex for a simple cheater to utilize. It was a very reasonable assumption on behalf of CRA. Not so anymore. Online and independently filed (non-lawyer) corporations are more than 50% in most provinces. Technology has made a complex issue more independent. But, of course, it’s much more than just the incorporation process. Someone must complete a corporate income tax return (T2). Firms or private individuals would have to be complicit in the filing of Driver Inc. returns. Nobody files a T2 accidentally. Someone was and still is responsible. The problem comes in liability. I would hazard a guess that every Driver Inc. filed T2 was performed by someone who would NOT be held liable. In the end, it will be the driver who was and is liable for all tax implications. At best a driver could file a suit against the person who prepared the return in the event they can prove they were deliberately and fraudulently misled. In my opinion, it would be a stretch. The Driver Inc. scheme would easily fall into the category of what a person should NOT DO to be successful.

Since CRA will be changing the filings to a PBS (personal business service) any perceived tax advantage in the past will now come back to haunt the filers (plus penalties and interest). It will not look pretty.

Figuring out what constitutes a “scheme” and what is an authentic tax plan all comes down to liability. Will the firm/individual guarantee the filings with their own resources? Is there a waiver involved? What does the waver contain or not contain?

The history of Driver Inc. is filled with halftruths and misrepresentations. Explaining to someone the “benefits” of not having Workers’ Compensation (or paying for it yourself) is simply a ridiculous con-job. Telling someone they don’t have to pay CPP but failing to tell them that the portion they do pay will include both the employer and employee’s portion is numerically tragic. A carrier who refuses to hire an employee but will hire someone through a corporate contract isn’t fooling anyone… they are doing it to reduce their costs and liability.

When a driver under performs in any way and the carrier deducts a “fine” as compensation (damages or other) it is unconscionable. This is not what Canada is about. The trucking industry does not need to victimize the driver; we are in a driver shortage. Drivers are in the driver’s seat. Drivers should be interviewing carriers, not the other way around.

This holiday season we should be thankful for our country and the opportunities our citizens provide for each other. The trucking industry is critical to our society’s survival. Transportation of freight is the engine to all economic survival. It is a proud industry filled with tremendously successful and prudent workers.

The PODCAST is designed for industry information and educational purposes. It is not designed to make me popular or a social influencer. I seek to assist drivers in building long term financial wealth and stability, outside any dependence on government “cradle to grave” standards. Building wealth as a truck driver and/operator is not difficult if the right formula is followed. In fact, it’s probably one of the easiest industries to succeed in. I know plenty of very wealthy drivers and operators who are well prepared for retirement. You can be too.

About the Author: Robert D. Scheper is a leading Accountant and Consultant to the Lease/Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His firm exclusively serves Lease/Owner Operators across Canada. His second book “Choosing a Trucking company” is the most indepth analysis of the operator industry available today. He has a Master’s degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars.

You can find him at www.makingyourmilescount.com or 1-877-987-9787.

JOBS FOR TRUCKERS • 7 DECEMBER 2022