Ontario moves on underground builders
The government of Ontario has finally taken concrete steps against Underground Economy operators passing themselves off as genuine builders. This news release was issued by the Ministry of Labour on May 14. It won’t go far enough to rein in the leeches who evade taxes, leave their workers unprotected from injury and death and leave consumers with lousy work, but it gives teeth to inspectors. Let’s see if it puts a dent in the huge and growing underground economy; it’s a good start. Here’s the government’s new release:
The McGuinty government will aggressively target the underground economy through a new joint enforcement initiative between the Ministry of Labour and Tarion Warranty Corporation to locate unregistered homebuilders, Labour Minster Steve Peters said today.
“The underground economy in Ontario’s construction sector affects everyone,” said Peters at Tarion’s eastern office. “It hurts our economy, quality of construction, competitiveness of legitimate construction contractors and the health and safety of those who work in this vital sector.”
“The information sharing agreement we are signing today will help enforcement efforts to clamp down on unregistered builders who may be working in the underground economy, help safeguard construction workers, level the playing field for legitimate contractors and protect the home-buying public and our economy.”
The agreement between the Ministry of Labour (MOL) and Tarion Warranty Corporation will allow the exchange of information on the location of suspected unregistered residential construction contractors. This information would provide important information to inspectors from MOL and Tarion. MOL inspectors will help ensure contractors comply with provincial legislation on workplace health and safety. Tarion, a non-profit corporation that administers the Ontario New Home Warranties Plan Act, will verify contractors are properly registered builders.
“Our agreement will assist Tarion to enforce regulations related to illegal building to ensure consumers are protected from purchasing homes from builders without proper qualifications,” Tarion President and CEO Gregory Gee said. “This is good news for new home buyers and the building industry.”
The underground economy in Ontario’s construction sector is estimated to cost between $1 and $2 billion per year in lost revenue to all levels of government through unpaid taxes, premiums, and other fees that legitimate businesses pay.
“A stable and vibrant construction industry is vital to the economy of Ontario.” Peters said. “This agreement will help level the playing field for law-abiding construction companies who contribute towards our prosperity.”
Who do we target?
When Goldhawk sounds off against the Underground Economy, we do so knowing that a strict definition of this economy would include drug lords, prostitutes, cigarette smugglers, and a host of Internet businesses that evade taxes. It also includes revenue like tips to waiters, cabbies, hairdressers and a multitude of other service providers. While these areas certainly need more attention, Goldhawk.com is concerned with operators in the UE who compete directly with trustworthy businesses who follow the rules and pay their share of society’s upkeep. (more…)
How would you like an extra $42 billion a year?
A visitor to our Goldhawk Blog asked how we could estimate how much tax and social benefits are evaded by the Underground Economy. We had estimated the independent operators of the illicit economy evaded about $30 billion a year in GST, PST, income tax, EI, Workers Comp, CPP payments and other payments the rest of us make to support our way of life. The answer is our estimate is, at best, a rough guess based on the all-over-the-map information we could gather from a variety of sources. The fact is no one knows how much Canada’s Underground Economy is chiseling from the rest of us and that’s a shame. (more…)
Deportations do nothing to stem Underground Economy
This item was published in a compilation of events of 2006:
“Illegal workers in Toronto’s underground economy are being deported as the new Conservative government abandons a Liberal amnesty plan, immigration lawyers and consultants say. Some families who have been in Canada five years or more are given less than two weeks to pack up and leave. Toronto’s Portuguese community, with up to 15,000 undocumented members, working mainly in the booming construction industry, is especially concerned.” (more…)
Better economic advice needed
It’s no wonder consumers have a difficult time trying to determine where the economy is going so they can plan their purchasing better. Two reports on the economies in the U.S. and Canada, published on the same day, give widely different views of whether we might do well in the coming months or fall into despair. (more…)
Underground Economy even worse to the south
In the United States, experts estimate the underground economy is huge and growing rapidly. In fact, the illegal economy may edge out the legal economy in some areas of work. It is said if the Internal Revenue Service in the U.S. could collect all the taxes owing from the underground economy in a single year, the current, monumental U.S. budget deficit would disappear overnight. After that, the country would have huge surpluses far into the future. (more…)
There is no defense for working underground
The underground economy is defined roughly as all production that is hidden from tax and mandatory social benefit contributions like employment insurance. Some people have tried to make the argument that the underground economy is actually good for us. They say independent operators in the underground economy keep money away from the state that would only squander and misuse it. They look on these tax evaders as ‘honest, peaceful individuals’ who make more efficient use of resources and money than society at large does.
In a word, ‘crap.’ (more…)
The underground economy and why it’s bad for all of us
Basically, the underground economy consists of people who are independent operators and who avoid or, more accurately, evade any legal responsibilities to their customers, communities or the country in which they live and from which they draw all the services they can manage. A good catchall term for members of the underground economy is “leeches”. When you use a member of the underground economy you use a person or an employer of other persons who: (more…)
Goldhawk.com goes live
Goldhawk.com has gone live as a web site completely dedicated to the Canadian consumer. The site launched with extensive listings of suppliers in several of its various categories: Home Renovation, Home Building and Insurance. And Goldhawk.com is seeking honest, reliable and competent suppliers to add to these listings and for its other categories of Real Estate, Auto and Auto Body Repair, Travel, Weddings and Kids. (more…)