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: paul | Aug 16, 2021 9:20:17 AM
It is a tax revolt. Anyone who calls it theft is mistaken. The taxes we is theft in itself, rather the way taxes are used, losed, and abused is theft. If we saw near full value for what we pay in taxes there would be much less 'underground economy".
We pay more and more and more and see less and less and less. Look at health, education, infrastructure.
We are not getting value for our money.
Posted by: Steve | Aug 16, 2021 9:31:23 AM
In countries where consumption taxes are highest this behavior is highest. I won't mention Greece or Italy but I will say that this does have an effect on the countries finances which cannot be fixed by 'raising taxes'. We all know how to prevent this but no civil 'servant' will be putting their head on the block to lower the need for this level of taxation. Remember the days when public employees made much less than private employees because they didn't risk getting laid off?
Posted by: Bud Webster | Aug 16, 2021 10:20:14 AM
I think most of us are fed up with the politicians of canada and their official pirates the CRA.Revenue Canada is not a legal entity and yet they write their own laws as they require them.They own judges,politicians,thousands of civil servants and an entire country of slaves.Who wants to work and pay half of your earnings out in tax,overt tax and covert tax.We are taxed up the ying yang and any revolt no matter it's shape I support.Underground economy,refuse to pay property tax,stop purchaseing items we can do without.On the hidden taxes or the pst/hst just stop consuming.Car pool,bicycle or walk.Who wants to pay tax on an automobile the tenth time it is sold?Come on wake up all of us and protest any way you can.Want my sin number?
Posted by: Tami S-D | Aug 16, 2021 11:49:24 AM
And this surprises you WHY? If you can pay cash to avoid tax, what incentive would there be to not do so other than the risk of getting caught? (Which is incredibly remote). I'm surprised the figure wasn't actually higher! Duh! I have no objection to contributing to the functioning of my society through financial tarrifs. I do, however, object to the way my hard-earned cash is squandered by the Civil Service, and the political machine. The biggest rip-off of all is the taxes now charged on new home sales. So... you're a struggling young couple trying to buy a family home in which to raise your kids. You have the choice of buying a down-trodden older home which requires major renovation; was built in an era when green wasn't even a concept; and is going to be a money-pit in terms of running costs..... or you can buy a new home, which is going to require no immediate maintenance; far cheaper to run with heating/electricity/water; and a much healthier environment for your kids with fewer noxious substances.... Its a no-brainer, right? You're going to buy the new home.... NOT! The price of a new home, no matter how comparable to the old home (prices even through compromise on choice of areas) is going to cost you dearly because of the taxes. The government wants to grab HST on top of that already nearly impossible to afford asking price.... just begin to get your head around that calculation, on the price of an average home! Its IMMORAL to charge HST on top of the price of a new home! And don't even get me started on taxes on kids items..... My teenaged son pointed out to me the other day, that as he isn't allowed to vote, but he must pay taxes on goods he purchases, or money that he earns, that he is being taxed without representation.... There should NEVER be taxes on children's clothes, shoes, and basic necessities of life. There are families out there struggling to make ends meet for which the extra taxes on top of the price make the difference between buying and not buying things which their kids actually need. Maybe our governments should be taking notice of this study, and, rather than finding ways to "catch" those trying to avoid paying their punative taxation structure, they should be finding ways of REDUCING the burden on their taxpayers instead!!!!!! People are dodging tax because the taxes are not fair, not relevant, and not well-spent. Gee, wasn't that the situation just before the Americans had their big "Tea Party"?!?!?!?! Politicians take note.... I like my tea with a dash of milk, but I wouldn't mind it with a splash of salt if it meant getting the tax-burden down in Canada!
Posted by: William | Aug 16, 2021 12:21:46 PM
So the smart Canadian government has created their own monster. If the polititians and their other little crooks would stop stealing from us and give us some value for our dollar this could help us feel better. I am not proud to be a Canadian no longer and will pay as little in taxes as possible. Maybe they will wake up some day and realize how they are slowly destroying our country.
Posted by: BillyBoy | Aug 16, 2021 12:21:52 PM
Cash, baby... all the way!
I pay cash for everything I cannot "tax" deduct and encourage everyone else to do the same! It's a moral obligation, because CASH = FREEDOM.
The real THEFT is occuring when government unlawfully (notice that I do not use the word "illegally" here - there is a difference)... when government unlawfully seizes half your income through income taxes and the remaining half through sales tax, property tax, capital gain tax, dividend tax, fuel tax, mandatory health care and insurance contributions and a basket of other taxes you don't know about.
This is the tip of the iceberg though, the bigger THEFT by government is through inflation (which is simply the devaluation of your dollar). They print paper money ( Fiat currency ) which they spend while your savings lose purchasing power.
If you value FREEDOM then you have a moral obligation to pay cash. If not enough people use cash, they will try to ban it.
First they took your gold, which is real money and gave you paper backed by nothing but their promise and ability to print more paper. And now, they want to take the paper and give you electronic credits.
CASH affords you anonymity and privacy. CASH leaves more money in your neighbours pocket. CASH gets YOU a better deal. Basically CASH is good for the people and bad for the bankers and government that want a nation of happless, consuming slaves.
THINK ABOUT THIS ONE:
If only 10 million out of Canada's population of 35 million only took out $10,000 from the banks and never put it back in, that would represent a 100 billion dollar economy circulating in the hands of the PEOPLE. No government control, no taxes!
Wanna learn about money? What it is? Where it came from? How it works?
Google the documentary "THE MONEY MASTERS" and watch it. For some people who are still asleep, it may change the way you see the world.
Posted by: William | Aug 16, 2021 12:28:08 PM
FOR SALE CASH ONLY, NO TAX.
Posted by: William | Aug 16, 2021 12:30:20 PM
Billions and Billions of tax dollars each year go missing or are spent in corrupt ways.
Posted by: Al | Aug 16, 2021 12:32:27 PM
Well of course!!!!! All of our levels of governments foster lack of trust FROM the taxpayer. What you are seeing here is a reflection of that. The attitude is "they cheat us at every opportunity, and literally steal from my paycheck, steal from me when I buy anything and steal from me when I die! Why would you think i wouldn't steal from them whenever i can". I am not necessarily condoning this, but anybody with half a brain can see that Canadians feel cheated by all levels of government. As soon as you FEEL cheated, you WILL cheat. You don't need to be a psychologist to figure this out.
Add the cheating to the fact that, at least in ontario, we have the worst liar in the history of politics at the helm - he was elected twice promising NOT to raise taxes. There have been more tax iincreases by this liberal group of thieves than by any other previous government in the history of the province. So it';s a no brainer that the general populous will try to strike back.
Posted by: William | Aug 16, 2021 12:41:14 PM
The underground economy up swing has not even began. Here in Ontario twice this week-end I seen people paying for their gas with nothing more then loonies, quarters, dimes and nickles. Soon working will become a thing of the past, you have nothing left after the tax man gets done with you. THEY NEED TO BE STOPPED .
Posted by: Kevin | Aug 16, 2021 1:24:23 PM
You do have recourse for shoddy workmanship. If I hire somebody to do a job, let's say for $500.00, and I pay cash (which is still legal tender) and I do not get what I paid for I can still sue to recover. The question becomes one of completion of the contract. It is up to the person charging me to remit to the government all taxes or other payroll deductions that are due. When I buy an item at the hardware store I pay cash but the business has to send the tax on to the government.
Posted by: Kuldep | Aug 16, 2021 2:15:38 PM
It looks like one day the average canadian will have no money.The government will have it all.We have only the right to vote to elect the repersentives they do nothing when they are in any government.No public repersentive should be aloud to cooect pension after 2 terms. They should all wait till they are 67 years of age.We in canada live in dictatorship law. No worse than some other countries/
Posted by: the german jackel | Aug 16, 2021 2:19:46 PM
AFTER READING ALL THE COMMENTS POSTED,THERE IS ALOT OF VALID POINTS MENTIONED.YOU LOOK AT ALL THE TAX DOLLARS THAT HAVE BEEN WASTED BY THE GOV- AND NOT TO MENTION VERY LITTLE ACCOUNTABILITY FOR WASTED TAX DOLLARS.PAYING CASH TO AVOID PAYING THE HST WILL ONLY GROW,GROW AND THIS WILL BE A GROWING PROBLEM FOR THE CANADIAN GOV.I HOPE EVERYONE STARTS TO AVOID PAYING THE HST AND MAYBE THE GOV WILL WAKE-UP.WE CANADIAN ARE WAY OVER TAXED FOR WHAT WE GET IN RETURN.THE ONE COMMENT THAT REALLY GOT MY ATTENTION WAS PAYING TAX ON A USED CAR FIVE TIMES OR MORE.CAN SOMEONE TELL ME, WHY SHOULDN'T WE AVOID PAYING HST ON RENO'S ETC.LETS SEE ON A BIG RENOVATION,SAY $5000,$10,000 OR MORE YOUR BETTER TO DO A CASH DEAL AND SAVE THE HST THEN CLAIM IT ON YOUR PERSONAL INCOME TAX.SENIORS ON FIXED INCOMES ARE ONE OF THE BIGGEST LOSER IN THIS HST SCAM.THEY HAVE PUT THERE TIME AND PAID THERE SHARE OF TAXES BUT YET OUR GOV SEEMS THEY JUST CAN'T STEAL ENOUGH FROM THEM.THE CANADIAN GOV ALREADY STOLE MY SHIRT,I THINK I WILL MAIL MY BRIEFS TO THEM BEFORE THE RIP THOSE OFF ME TO.
Posted by: John | Aug 16, 2021 2:23:50 PM
Is it theft...of course it is!! No different than what the government is doing to us under thier tax systems. The politicians give themselves raises with our money so why should we not try to keep it ourselves? Instead of the government spending money to try and stop this type of behavoir..they should look to ways of change the unfair system! Do not tell us it is for health care, roads etc. That ship sailed many years ago.
Posted by: scott | Aug 16, 2021 2:41:20 PM
The underground economy will only grow as time goes on,it's great to see the BC people fighting there new tax grab in court.I can only say,i'm surprised the number of people polled was not higher which will most likely change just before CHRISTMAS..!!There was a great comment about childeren paying taxes on clothing,school supplies etc even children sports like hockey,baseball,etc.Those should be all exempt from hst.If I can pay cash for those items and not pay the taxes on them,I would in a heartbeat.I really hope this becomes a huge problem for the Canadian goverment,just because the people in the Canadian goverment are over paid with Canadian tax dollars and can afford to pay the HST most Canadians are just making ends meet.I really feel bad for the people who are retired and on a pension.You better watch out seniors,the goverment might start taxing you on your free time..
Posted by: William | Aug 16, 2021 3:04:10 PM
Does anyone want to take a guess at whats going to happen to our Canada Pension Plan. I'm 54 and have paid the maximum amount to CPP every year all my working life. Will there be any CPP when I'm 65.
Posted by: tax sucks | Aug 16, 2021 3:24:20 PM
bahahaha...
"theft" ??? are you F@#$in kidding me???
Govt bureaucrats are the biggest thieves in the nation. What do these people even do for us???
i would trust a handyman far more than a politician
Posted by: s. Bezaire | Aug 16, 2021 3:34:22 PM
Well in one respect every comment made so far are right on the money. Our Governments are thieves, at all levels. I work in advertising and am always amazed at the strategies and planning that goes into campaigns. The remarkable efforts made to not say anything really and the appearance of promises made (NOT). It all boils down to money, OUR MONEY, the money we spend all of our lives to make and all of this theft from the Governments makes it dissapear quicker than we could ever make it, and certainly faster than we could possibly save it. We have been suckers for having our world sold out from under us by slick ads advertising Oil Companies, who have ruined the ecology in more areas of the world than I care to count. Financial institutions that sell products that take your money and promise to give you huge earnings benefits but gaurantee nothing. We slap these investors on the wrists and give them a short sentence so they will still have some life left to enjoy the investors money they embezzeled and hid in special accounts all over the world.
Slowly but surely HONOUR and honesty have left the business world. I could go on and on about businesses I have done business with, that now deliver less and less service and care for the products they have sold me with promises of a wonderful experience, but it's our own fault by buying the products they provide. Just venting on a bundle I purchased for the internet, phone and tv last year from a company I have dealt with for 54 years. (SCREWED AGAIN) and the worst part is I have complain to someone in India or Pakistan or wherever because they will do the job cheaper, certainly not better.. Our politicians have followed suit even at the Municipal Level. In our little city in the North, our politicians believe all business in our City almost always has to be done in camera. Apparently none of the citizens are bright enough to decide for themselves if a business locating here and using our dollars to make it happen is wanted or not. Imagine putting a Cities main economic engine in the hands of one developer.Virtually shutting out many bright and energetic retirees from having input until it's too late. Thats my thoughts on Governments and spending. As for the HST, who voted for that and what did the people have to do with it. NOTHING, I suspect. Skip.
Posted by: Dan | Aug 16, 2021 4:20:23 PM
Ok, everyone has to take a deep breath. It is true that taxes are pretty high here, but who do you think pays for the roads, hospitals, education, etc? I think we should be paying a lot of tax money, just not nearly as much as we are.
I think that the government first needs to take a look at what is happening in private industry and make their wages comparable. My wife works with pregnant teenagers for a measly sum each year, but if she was able to get a government job she could make 50% more. Shouldn't the guarantee of never losing your job be enough? I think that if people in the private and public sectors made the same amount of money, the public sector would STILL be more popular due to job security and the ability to work WAY less hard.
Scrap the government pensions for civil servants and make them pay into private RRSP investments as well... then we will see how many can get away with retiring after working for a measly 30 years and expect 30 years of benefits with incremental increases to match inflation. What a freakin joke of a system.
Posted by: bill | Aug 16, 2021 4:52:04 PM
Frack, there are so many crooks out there! "why did you stab him?" the government is evil, they made me do it.
Half of you writing on here are robbing directly from the honest people paying their taxes, and you think you are in the right! Frack off! Don't talk yourself into thinking it is okay because the big bad government is doing it.
Bitch all you want about civil servants. Were you too unqualified to apply? Or just like being able to complain so you didn't take the job? No - I am not a civil servant. 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.
As dad always said - " shit or get off the pot"!