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The underground economy is toxic. It costs jobs, makes it harder for above-board businesses to compete and ruins faith in our tax system. It can also leave you holding the bag when you get sub-par results or someone gets burned in a cash deal. But there is something we can all do, and it's simple.
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It hasn't really grown either. And that's good.
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Across Canada, our elected leaders are rewriting laws to accommodate Uber, while largely refusing to act when it or its drivers break the law. In no other industry would it be acceptable for a company to continue breaking the law while the government fiddles.
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It may be tempting to pay for certain things in cash because we think that saving a few dollars here and there can't hurt; however, we fail to see the larger impact of what happens when we do. The underground economy makes it challenging to protect the country's revenue base and hinders the government's ability to keep taxes low. When people pay in cash, they skip out on paying the taxes that support things like healthcare, education and public transportation -- the very social services we rely on every day.
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The Greek failure to successfully address tax evasion should prove instructive to Ontario Premier Kathleen Wynne, who in 2014 pledged to crack down on tax cheats. Greek measures to tackle evasion with enforcement have resulted in only small improvements. An enforcement only strategy should not be the model Ontario follows for tackling the underground economy. Relying on enforcement and punishment squeezes legitimate businesses who are already faced with high compliance costs and tax and regulatory burdens.
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How is it that everyone seems to know someone who's paid under the table, but no one concedes to doing it? Of course, that's no surprise. Who wants to admit to putting personal gain ahead of the greater good? It costs jobs, undermines businesses that play by the rules, and deprives the government of much needed revenue for vital programs. Statistics Canada says the underground economy totalled $42.4 billion in 2012, roughly 2.3 per cent of gross domestic product, much of it occurring in the construction, finance and real estate, retail and hospitality industries.
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OTTAWA - Statistics Canada says the underground economy totalled $42.4 billion in 2012, roughly 2.3 per cent of gross domestic product.The agency says that's down from a high of 2.7 per cent in 1994,...
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TORONTO - Ontario's Liberal government is vowing to crack down on illegal cigarettes, the underground economy and corporate tax avoiders to eliminate a $12.5-billion deficit in three years as promised...
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When drugs and prostitution are counted in calculating GDP, one could ask why the items in the basket are not increased. Forced labor, human trafficking and illegal organ trade are also elements of the black market. If drugs and prostitution are counted in calculating GDP, should a country also count forced labor and human trafficking in calculating GDP?
OTTAWA - After a three-year effort, the Canada Revenue Agency has failed to produce a new national strategy to combat the underground economy — despite repeated requests to do so from cash-starved pro...
OTTAWA - An advertising campaign last summer warning Atlantic Canadians against paying "under the table" for home renovations was a big flop.The ads from the Canada Revenue Agency were designed to cha...