This week, the Carpenters District Council of Ontario (CDCO) is observing its annual Tax Fraud Days of Action campaign from April 11th to 16th. Tax fraud is a major issue in Canada, and construction industry tax fraud, labour trafficking, and the underground economy cost the Canadian economy billions every year. That is why the Carpenter's Union is trying to promote awareness of the issue, in an effort to reduce tax fraud in the industry. 

By misclassifying workers as independent contractors and paying them under the table to avoid taxes, fraudsters cheat workers out of hard-earned pay and benefits. This includes worker protections, pension, healthcare and unemployment insurance. 

"The infrastructure of a country comes from a carpenter's hands," said Jason Rowe, Canadian District Vice President of the Carpenter's Union. "People who are not paying their taxes – not only the worker on site but also the contractor itself – if they aren't paying taxes and the employer is also not paying proper taxes, that money doesn't go back into the economy." 


Rowe explained that this means that we don't get to build more hospitals, bridges, roads, schools, and other critical infrastructure. 

"The contractors that are fraudulent are hurting the industry, but really, they are hurting Canadians in their own communities," said Rowe. "You have to understand that taxes run this country, and if everyone isn't paying their fair share – it's not going to run properly."

According to Statistics Canada, the underground economy accounted for $61.2 billion in economic activity in 2018. The largest slice of Canada’s underground economy activity in 2018 came from the residential construction industry (26.2 per cent or $16 billion).

A 2019 study of Ontario’s underground construction economy put the annual losses in federal and provincial tax revenue up to $3.1 billion – that's a lot of money lost that could be put towards providing critical infrastructure to Canadians. 

"I truly believe that this is the time to focus on tax fraud," said Tony Iannuzzi, Executive Secretary Treasurer of the Carpenter's Union. "There are millions of dollars out there that we don't have to take from one sector to give to another – there's money there that should be collected and be put into improving necessary infrastructure." 

The Carpenter's Union is hoping to incite legislation that would make it harder for contractors to commit tax fraud in the industry. If you are interested, take a listen to the Building Ontario Podcast – where you can hear Carpenters District Council President Mike Yorke discuss the latest news and innovations in the construction industry and trades with industry players, policy makers, and contractors in Ontario and around the world.

* * *

UrbanToronto’s new data research service, UrbanToronto Pro, offers comprehensive information on construction projects in the Greater Toronto Area—from proposal right through to completion stages. In addition, our subscription newsletter, New Development Insider, drops in your mailbox daily to help you track projects through the planning process.