Millwright Regional Council and CRA Director Jason Charron

Published On: April 18, 2024Categories: Press Release

Ottawa, Ont. – The Millwright Regional Council met with CRA Director Jason Charron on Wednesday April 17, 2024, to discuss tax fraud and the underground economy in Canada’s construction industry, and ways to partner together on this issue.

The underground economy in Canada’s construction industry undermines the countries fiscal position and hurts legitimate contractors. The residential construction industry accounted for 35.0% ($23.9 billion) of all underground economic activity which includes lessors of real estate 12.7% and retail trade 10.5% combined with accommodation and food services 7.3%.

“Construction industry tax fraud negatively affects the economic growth of the country and reduces tax revenues for all levels of government, putting pressure on the government’s ability to provide the services and benefits that Canadians enjoy and expect and it continues to undermine the countries fiscal position and hurts legitimate contractors. One of the primary drivers of the underground economy is employers improperly classifying their workers as ‘Independent Operators’ rather than employees.”

 Said Chris Sutton Director of Public Affairs and Strategic Initiatives for the Millwright Regional Council,

Most recent looks at the 2021 fiscal year which a Statistic Canada report that was release February 20, 2023; it increased by 4.8% in 2021 creating approximately $68.5 billion in underground economy activity in Canada or 2.7% of total GDP during this period. The total value of underground economic activity in 2021 was highest in the four largest economies: Ontario ($26.9 billion), Quebec ($15.5 billion), British Columbia ($11.1 billion) and Alberta ($6.8 billion). These four economies accounted for 87.9% of total underground economy, while the total GDP created by these four provinces accounted for 87.1% of total economy.

Underground economic activity negatively affects economic growth in Canada. It also reduces tax revenues for all levels of government, putting pressure on the government’s ability to provide the services and benefits that Canadians enjoy and expect. Moreover, these illegal activities continue to erode Canadian’s faith in the integrity and fairness of Canada’s tax system, undermine the competitiveness of honest businesses, as well as cause honest taxpayers to bear the tax load of those who cheat.

Fraudulent contractors cheat Canadians out of hard-earned pay and benefits by misclassifying workers as independent contractors and paying them under the table to avoid taxes, including worker protections, pension, health care, and employment insurance. This makes job sites less safe because contractors who operate off the books or misclassify their employees are more likely to cut corners and compromise the safety of workers.

The MRC will continue to work with the CRA to create strategies to put an end construction industry tax fraud and working together towards solutions that reign in the underground economy.

The UBC Tax Fraud Days of Action are taking place across Canada and the United States April 13-19, 2024, to bring awareness to the issues of tax fraud and the underground economy.
Safety is our Highest Priority. Learn more at www.stoptaxfraud.ca

 

About the Millwright Regional Council

 The Millwright Regional Council (MRC) is composed of thirteen affiliated Local Unions of the United Brotherhood of Carpenters and Joiners of America (UBC) across Canada. UBC millwrights are vital partners in diverse industries such as energy, automotive, aerospace, food processing, and pharmaceuticals. ubcmillwrights.ca

For media inquiries, please contact:

Andrew Bredin

Director of Communications
Millwright Regional Council
416-757-5161
abredin@ubcmillwrights.ca