Ontario Seeking Input to Address Underground Economy
Province Working With Construction Sector to Strengthen Worker and Consumer Protections
Ontario is seeking input from individuals who work in the residential construction sector on ways to prevent illegal practices that contribute to the underground economy such as under the table transactions.
Parliamentary Assistant Laura Albanese is consulting with key stakeholders, including the Ontario Home Builders' Association, to better understand the scope of the underground economy within the sector. She will also gather advice on how best to help responsible contractors remain successful and support the economy.
Individuals that run a business or work in the residential construction sector are also invited to submit their ideas on the types of illicit activities that impact their ability to remain competitive to firstname.lastname@example.org.
The underground economy accounts for $15 billion in lost economic activity in Ontario each year. When businesses aggressively avoid or evade paying taxes, everyone else is left to make up the shortfall. This also puts the competitiveness of legitimate businesses at risk. Illicit practices may also impact worker safety and prevent workers from accessing government support programs such as workplace safety and insurance protections, the Canada Pension Plan and Employment Insurance.
Addressing the underground economy and maintaining tax fairness are part of the government's plan to build Ontario up. The four-part plan also includes investing in people's talents and skills, making the largest investment in public infrastructure in Ontario's history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.
- According to Statistics Canada, the country’s underground economy is estimated to be 2.3 per cent of annual gross domestic product (GDP), and is estimated to largely occur in the construction, retail and hospitality sectors where cash payments are common.
- According to Statistics Canada, the residential construction sector comprises almost 30 per cent of Ontario’s underground economy, or approximately $4.5 billion in annual underground economic activity.
- Through initiatives that include enhanced auditing, the government has generated more than $825 million in increased revenue for the province since 2013–14 — a $225 million increase over what was reported in the 2015 Budget.
“Ontario continues to foster a dynamic and competitive business environment to promote a vibrant and prosperous economy. However, when select operators deliberately evade their legal obligations and tax responsibilities by going underground, it creates an unfair advantage over legitimate businesses and poses serious consequences to workers and consumers. I am pleased to partner with the residential construction sector to gain insight into how we can combat this problem.”
“Consumers and workers are protected when everyone pays their fair share and complies with regulations. It is important to hear from the people who work in the construction sector as they will be able to provide the most valuable input on how to combat the underground economy.”
“As the voice of the residential construction and professional renovation industry in Ontario, OHBA welcomes these discussions and looks forward to working with the government to stop the underground economy in order to protect consumers and support professional home builders and renovators.”