Underground economy on the upswing: report
Here’s a big shock: Most Canadians have, at some point, paid cash for goods and services to avoid paying tax.
A recent poll found 19% of respondents take advantage of under-the-table opportunities just about every chance they get. Another 38% said they don’t do it regularly, but have done it once or twice. Only one-quarter of Canadians said they would never pay cash in order to get a tax break.
Ontarians are most likely to take advantage of the underground economy by paying cash while residents of B.C. and Atlantic Canada are least likely, the numbers suggest.
Not surprisingly, home renovations lead the way where as many as one-in-three projects are settled in cash, to avoid paying not only the sales tax, but income and payroll taxes as well. The result in Ontario is more than $2.4 billion drained from the public purse over the past two years, according to some estimates.
All of which is little more than theft, says Ottawa Citizen columnist Mark Sutcliffe in recent editorial: “That's effectively what people do when they participate in the underground economy – steal from their neighbours. And those who help them – either by agreeing to a cash transaction in return for a discount or simply by condoning their behaviour – are complicit in a growing problem with dangerous implications.”
And the Canada Revenue Agency agrees, which is why it sponsored a YouTube video contest to promote the message that those who participate in the underground economy are avoiding their tax responsibilities at the expense of everyone else.
Aside from that, there are going to be risks if you decide to pay cash: No warranty, no recourse for shoddy workmanship and the added risk of liability if an injury takes place on your property.
After all, if contractors are willing to cut corners when it comes to paying taxes, who’s to say they won’t do the same with their work as well?
What’s your take? Is 'working for cash' part of a larger tax revolt or is it really just theft?
By Gordon Powers, MSN Money
Posted by: diane10 | Aug 16, 2021 4:53:03 PM
I know of a contractor who has been hounded by the CRA for the last two years. I find it sad that the government would go after hard working Canadians for a few thousand dollars when they can't keep their own fiscal house in order. Remember - they owe trillions. Yes, the underground economy is a problem, but if you look at all the taxes that are levied on us, it's not surprising that people are looking to save a few bucks. I believe, the advent of the HST, and probably the renewal of the pathetic Eco-Tax are just going to increase this activity. Do you really think that companies are going to pass on their savings to the consumer? For many of them they simply can't afford to. The governments (Federal and Provincial) have no one to blame but themselves.
Posted by: don | Aug 16, 2021 5:12:41 PM
My grandfather used to tell us the government is a reflection of the people. Here it is. The government is no more corruput than all these people cheating on thier taxes. Two wrongs dont make a right and I, for one, resent my bill will continue to climb becasue others cheat....yes... that is what is it. Who do you think you are hurting? it is not ultimatly the government but me who is left paying my share and yours. The other part is this "missing income" allows people to collect benefits and monies from the government in the form of GST rebates and child tax benefits.
I for one dont have nearly as much problem with people not payiing taxes as the people who earn a better living than me taking the tax dollars I paid that are meant to benefit the poor.
Posted by: heather | Aug 16, 2021 5:14:49 PM
I THINK SOME PEOPLE ON HERE ARE GETTING ALITTLE OFF TRACK,FOR THE MOST PART THIS IS ALMOST THE SAME THING WHEN THE GOV'T PUT THE TAXES UP ON SMOKES AND LOOK WHAT HAPPENED THERE ALL GOING TO THE RESERVE TO BUT THEM CHEAPER.THIS IS JUST LIKE THE HST,PEOPLE ARE JUST GOING TO FIND A CHEAPER WAY TO AVOID THIS BULL$%*! TAX..YOU REALLY CAN'T BLAME THEM AND HATS OFF TO THEM FOR DOING SO.WE DID NOT HAVE A SAY IN THIS TAX NOR A VOTE!!BUT ONCE AGIAN AS CANADIANS WE WILL GO "OH WELL"AND LET IT SLIDE .BECAUSE OF THE WAY THE BC GOV'T INTRODUCED THERE SAME VERSION OF OUR TAX,THEY ARE NOW FIGHTING IT IN COURT SAYING IT WAS ILLEGAL THE WAY THEY PUSHED IT IN.I HAVE ALOT OF REPECT FOR THE PEOPLE OF BC BUT AS AN ONTARIAN WE LIKE TO LET THINGS SLIDE.PEOPLE WHO HATE THIS NEW TAX SYSTEM WITH FIND WAY TO AVOID PAYING IT.THANK GOD FOR CASH,WITH THREE KIDS ALWAYS LOOKING FOR A DEAL AND THIS HST IS GOING TO BE A PROBLEM FOR THE CANADIAN GOV'T AND SERVES THEM RIGHT FOR RAMMING THIS DOWN OUR THROATS..
Posted by: Mariana | Aug 16, 2021 5:29:52 PM
Bless you BillyBoy, its refreshing to read someone's thoughts here that actually know what their talking about.
Posted by: William | Aug 16, 2021 5:41:11 PM
Hey Bill, Last year in total I payed over 300 thousand in taxes and I'm sick of it. If you think everyone on here don't pay taxes you are wrong.
Posted by: SP | Aug 16, 2021 5:44:50 PM
There once was a group of people called "American's" who were upset that they were being taxed and did not have a say in the way in which the elites were spending their taxes. So they went to Boston, had a tea party and then continued to merrily pay their taxes as usual without stopping the fiscal abuse. So ends the History lesson as taught by the Canada Revenue Agency.
Posted by: sil | Aug 16, 2021 6:28:15 PM
YES I LOVE IT screw the govt anyway you can. They screw us, remember i will scrap the GST??
I screw them all the time and will keep doing it. Mr tax sucks you are right, the politicians are bunch of FRUCKERs. Leave them in queens park and hope someone decides to do something
LIke i said, screw them all i can. And loving it
I do my shopping in the states now. Screw dalton and ontario. Tires here are about 700 for 4
water town 360.00 includes exchange and taxes HMM where do i go???
F#$# you dalton
Posted by: Ron | Aug 16, 2021 6:38:31 PM
Taxes ,taxes,taxes.It seems the only solution for government to solve any problem is to tax something.Enough is enough.They should realize that higher taxeare are putting saveral nails in the
coffin of the economy since every dollar they take from me lowers my "disposible income" and I can't help support the economy by purchasing goods and services
Posted by: Tinna | Aug 16, 2021 7:19:39 PM
A way to solve it???
Do like crimestoppers?
Have a reward system!!
It will work!
Posted by: Tom | Aug 16, 2021 7:23:28 PM
Big Bad Politicians, please read this responses...Canadians have had it up their hing-yang with tax $ being misused, abused and down right thrown into the greedy hands of government. The Underground economy has and will live forever. People like Mr. Sutcliffe write these articles to make their own living...don't be too pompous!
Posted by: eman | Aug 16, 2021 7:32:27 PM
The tax payer money used to pay for the G-20 summit is itself a theft and later will raise tax again. The government had carte blanche to secure the leaders of the world, however, just ask HP CEO Mark Hurd how he can do more with less and yet he is the darling of Wall St.
Posted by: sil | Aug 16, 2021 7:59:50 PM
screw the govt anyway you can. Cash only. Dalton you are a piece of C$###p.
Rip them off.
Posted by: randy | Aug 16, 2021 9:43:09 PM
working for cash is the only way, the corrupt governments we elect do nothing but squander taxpayer money on lavish trips and persian rugs. Anyone who can generate an income without paying tax is the man.
Posted by: randy | Aug 16, 2021 9:47:00 PM
and billyboy, quit your whining, only the stupid pay tax and love it.
Posted by: Taxpayer | Aug 16, 2021 10:11:05 PM
To Bill (4:52 pm.): Are you kidding me? What's with the self righteous bullshit? I use the underground economy every chance I get and will continue to do so BUT I also pay taxes everytime I fill up my car, buy something, save something and earn something. I'm not avoiding paying taxes...I'm avoiding being robbed by the lying, thieving crooks on Parliament Hill and the other two levels of government that screw me every chance they get. I'm simply trying to keep some of the money I worked hard to earn. So take your sanctimonious attitude and peddle it somewhere else.
Posted by: Taxpayer | Aug 16, 2021 10:15:46 PM
BTW Bill....no I'm not " unqualified " to be a civil servant...I'm just not FRENCH!
Posted by: Ernie | Aug 16, 2021 10:40:57 PM
Let's not forget as well that our hydro delivery rates have gone up 2 years in a row and now we pay TOU pricing which really discriminates against stay at home moms who don't want to do laundry at 2am. These are 2 provincially owned companies which means that we own them. Dalton's govt just allows these prices to increase on a whim just as his taxes do. I'll be so glad to see some of the common sense revelution return in the next election if there's a politician up to the task. It's no wonder why people like doing cash transactions. We the people look for ways to save a buck - what little we have left after tax and the cost of living in Ontario, while the Dalton's govt finds more ways to steal a buck from us. It's become the cat and mouse game. When will they wake up and realize that taxation has reached the downside of the bell curve in terms of fairness and sustainability?
Posted by: s | Aug 17, 2021 11:06:22 AM
I hope the gov't reads these comments and maybe they'll understand they can't bully or scare Canadians. If you want us to pay taxes, then show us our money is being used on something other that government employee salaries and perks.
Posted by: Geoff | Aug 17, 2021 1:30:31 PM
" I understand there is waste, if so report it if you see it, don't write these lame comments on the internet. Frack, if you had proof post that on here with specific names and organization, blow that whistle.
If you got no real examples with the who, what, when, where, how... pay your fracking taxes."
There is a public agency that "blows that whistle" as you put it, every year; they tell us exactly how much of our hard earned tax dollars are stollen or 'Misused/ spent' by our government. The report is actually quite long, a few thousand pages actually, and outlines what was spent, on what and why it wasn't neccesary; At the end of the day though, do you know what changes? absouloutley nothing! sure there may be an "inquiry" or two, but in the end no jail time is doled out to these thieves when infact, they should be made to repay every cent.
As for writing lame comments on the internet, well sir; this is a free venue for the public to voice our opinions, if you don't like it then don't read it.
At the end of the day its just tiring to look at my already crappy pay stub, see how much goes to tax, then hear about how I'm paying for lunches, dinners, plane trips, hotels etc. that are all un-needed.
I will use cash at every oppertunity to keep as much of MY money in MY pocket.
Posted by: Don Casselman | Aug 17, 2021 1:39:14 PM
When I think about the hard-working Canadians who have, for years ,paid their fair share of taxes and when I think about how big government, over the same period of time, has stolen, squandered, wasted, and otherwise lost hundred of millions of dollars, well now, come on underground....any chance that we can get we will take advantage of it.....