The Canadian District of the United Brotherhood of Carpenters and Joiners of America (UBC) is asking Canadians to consider construction industry tax fraud, its impact on workers and our communities, and steps we can take to combat this growing issue. The awareness campaign is part of the UBC’s annual Tax Fraud Days of Action week, which runs from April 13-19, 2024.

The theme of this year’s campaign, “Ask Yourself Why,” is focused on asking tough questions about shady business practices in the construction industry. For instance, construction workers paid in cash should ask why they earn less than their peers, or why they are forced to pay out of pocket for medical expenses due to a workplace accident. 

“The unfortunate answer to both questions is worker exploitation,” says Jason Rowe, Vice President of the UBC Canadian District. “Construction workers being paid in cash often don’t realize they’re being put into dangerous situations. By failing to pay the requisite HST, CPP, EI, and workers’ compensation premiums, crooked contractors cheat workers out of protections they are entitled to.”

Perhaps unsurprisingly, many of these same abusive contractors also fail to maintain safe jobsites, which further compounds the problem. Labour trafficking, long hours, and deplorable working conditions, which sacrifice the health and safety of workers, are common on such sites. “We see these kinds of illicit practices most often in the residential construction sector on non-union jobsites. It becomes a vicious cycle where injuries and hardship become increasingly inevitable,” Rowe explains.  

These kinds of illegal business practices are so entrenched that they’re a key part of the business model for industry players at all levels: owners, developers, general contractors, subcontractors, and labour brokers. In addition to exploiting workers, these cost-cutting practices make it more difficult for legitimate contactors and law-abiding businesses to stay competitive.

Tax Fraud Days of Action also calls on all Canadians to ask themselves why governments aren’t doing more to combat this national problem with huge economic implications. According to Statistics Canada, the underground economy accounts for $61.2 billion in economic activity, with residential construction being the worst offender (26.2 per cent or $16 billion). These lost tax revenues deprive all orders of government – and in turn our communities – of funding that should be invested into programs and services. 

The UBC Canadian District Office is seeking to partner with all orders of government and take steps towards eliminating construction industry tax fraud. These steps include:  

• Increasing transparency in the procurement process on all government-funded projects.
• Having Canada Revenue Agency assign an auditor to work with the UBC to help identify contractor tax fraud via reported leads on suspected tax or benefit cheating submitted to the CRA.
• Introducing legislation to impose stronger general contractor liability for sub-contractor violations.

For more information about the campaign, please visit stoptaxfraud.ca. 

Check out more news and blogs here

• 
•