Discover the underground economy | CFIB
Many employers are concerned about the underground economy. In addition to the considerable risks it creates to public health and safety, the underground economy means that law-abiding employers must pay the insurance costs of employers operating in the underground economy. We have written letters to government officials and made presentations to ensure the voice of business owners is heard.
Limiting the underground economy must come from all levels: the consumer, the entrepreneur, the government.
Did you know….
- Underground economic activity is particularly prevalent in industry sectors where cash transactions are common, such as hospitality, auto repair, and construction, including home renovation.
- Tax evasion is illegal and can result in criminal convictions resulting in fines and imprisonment in addition to taxes and penalties due under income tax and excise tax laws.
- The underground economy imposes an unfair burden on all law-abiding taxpayers. Unpaid taxes mean less money for programs like health care, employment insurance and pensions.
- The underground economy also harms the competitiveness of businesses and individuals, as it provides an unfair and illegal advantage to those who do not comply with Canada’s tax laws.
- The CRA devotes a significant amount of resources to combating the underground economy, particularly in sectors of the economy where cash transactions are most common. ARC – Underground Economy
How to fight against the underground economy?
As a business owner, you can educate your consumers. A good resource is the Canadian Home Builders’ Association. Their brochure “Get it in Writing” helps consumers become 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 sometimes leaving suppliers unpaid.
You can anonymously report underground activity via CRA Whistleblower Program. Reporting illegal activities, such as tax evasion, can help ease the burden of the underground economy.
You can call your business advisor to discuss your specific encounters with the underground economy – they will help you decide what options you have to limit these activities.