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Press release - Tax Fraud
April 11, 2022

The underground economy in the Construction industry steals billions of dollars every year from Canadians

The United Brotherhood of Carpenters (UBC) announces the start of the 2022 Tax Fraud Days of Action (April 11-16, 2022) to disseminate and educate Canadians about construction industry tax fraud.

 “The underground economy is thriving in Canada, especially in the construction industry, stealing billions of dollars every year. Tax fraud is robbing honest and hardworking Canadians and their families of the services they have worked for and deserve,” says Jason Rowe, Vice President, United Brotherhood of Carpenters, Canadian District.

Communities and Canadians suffer as funding for essential programs and infrastructure is lost to thieving contractors who operate in the underground economy evading their tax responsibilities and break the law.

Dishonest employers also intentionally misclassifying workers as independent contractors or pay them in cash to ensure workers do not appear on official employer payroll records and are not covered by employment insurance and workers compensation. When employers shift their tax burden onto their employees, the employees are forced to pay their employer’s employment taxes, which places a substantial financial burden on working families.

Construction industry tax fraud also punishes honest, fair-minded construction firms that cannot compete with fraudulent labour costs.

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

That’s billions of dollars in lost tax revenue that should be used to repair roads, bridges, schools, care for veterans, and fund other essential public programs.

“The United Brotherhood of Carpenters’ regional councils across the U.S. and Canada are working with honest contractors and community stakeholders to level the playing field by shining a spotlight on the underground economy and those who engage in this illegal activity. The UBC is engaging government, law enforcement, and the banking industry to act,” says Jason Rowe, District Vice President, United Brotherhood of Carpenters, Canadian District.

It is time for Canadians to stand up against tax fraud and fight corruption in the underground economy so we can have the programs and services required in our communities.

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