Many employers are concerned about the underground economy. In addition to the considerable risks it creates for the public's health and safety, the underground economy means that law-abiding employers must pay the insurance costs of employers who operate in the underground economy. We have written letters to government officials and made presentations to ensure the business owners' voices are heard.
Limiting the underground economy has to come from all levels: the consumer, the contractor, the government.
Did you know....
- Underground economic activity is particularly prevalent in industry sectors where cash transactions are common, such as hospitality, automotive repairs and construction, including home renovations.
- Evading taxes is illegal and can result in criminal convictions leading to fines and jail time in addition to any taxes and penalties owing under the Income Tax and Excise Tax Acts.
- The underground economy places an unfair burden on all law-abiding taxpayers. Unpaid taxes mean less money for programs, such as health care, employment insurance and pensions.
- The underground economy also undermines the competitiveness of businesses and individuals because it offers an unfair, illegal advantage to those who fail to comply with Canada's tax laws.
- The CRA dedicates a significant amount of resources to combating the underground economy, particularly in sectors of the economy where cash transactions are most common. CRA - Underground Economy
How can I fight the underground economy?
As a business owner you can educate your consumers. One good resource is the Canadian Home Builder's Association. Their brochure "Get it in Writing" helps consumers be aware of their responsibilities and rights before a project begins. It teaches consumers the value of having a professional contractor - like you - and avoiding incomplete work, possible injury or damage, breaking the law and leaving suppliers sometimes unpaid.
You can anonymously report underground activity through CRA's Informant Leads Program. Reporting illegal activities, such as tax evasion can help relieve the burden of the underground economy.
You can call your Business Counsellor to discuss your specific encounters with the underground economy - they will help you decide what options you have to limit these activities.