Canada’s underground economy was estimated to be $68.5 billion in 2021, representing 2.7 per cent of the total GDP, according to a report from Statistics Canada.

The report shows that in 2021, the underground economy experienced significant growth of 4.8 per cent in real terms, primarily driven by an 18 per cent surge in underground economic activity related to investments in residential structures.

In contrast, the underground economy experienced a 4.5 per cent decline in 2020, mainly due to reduced underground economic activity in household final consumption expenditure, which dropped by 8.4 per cent.

The underground economy is defined as consisting of market-based economic activities, whether legal or illegal, that escape measurement because of their hidden, illegal, or informal nature, according to the report.

StatCan has excluded some illegal activities, such as those related to drugs (except cannabis) and prostitution in the report.

The StatCan report shows that in 2021, the residential construction industry played a significant role in the underground economy, contributing 35.0 per cent or $23.9 billion, making it the largest contributor.

The next in line were the real estate landlords, responsible for 12.7 per cent, followed by retail trade at 10.5 per cent and accommodation and food services at 7.3 per cent.

According to the report, together, these four industries accounted for about two-thirds of all underground economic activity in Canada.

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