Carpenters union takes aim at underground economy
The Canadian office of the United Brotherhood of Carpenters (UBC) is calling on governments across the country to stop construction industry tax fraud and labour trafficking.
The organization’s call for legislative support is part of Tax Fraud Days of Action, a campaign created by the union that is focused on raising awareness of, and taking action to address, illegal business practices in the construction industry.
Tax Fraud Days of Action runs from April 12 to 18.
The UBC Canadian District's call for partnership to address construction industry tax fraud extends to governments and other skilled trades across the country.
The union says the underground economy in Canada costs taxpayers billions in foregone revenue annually.
Statistics Canada recently estimated the annual value of the underground economy to be $65.8 billion, with the largest slice of that activity coming from the residential construction sector (35.0 percent or $23.9 billion).
Construction industry tax fraud occurs when construction companies engage in corrupt business practices to boost profits and reduce costs. This often includes their intentional misclassification of workers as "independent contractors," which enables the general contractor to reduce their payroll responsibilities and avoid rightfully paying for benefits like worker protections, pension, health care and unemployment insurance.
It has become so common that, for many businesses, misclassifications and skirting obligations are part of their business model involving players at all levels: owners, developers, general contractors, subcontractors, and labour brokers. It's all at the expense of workers, taxpayers, and law-abiding businesses.
"We routinely see this issue and its human cost in the residential construction industry," says Jason Rowe, Vice-President, UBC Canadian District. "Workers who are part of the underground economy often don't realize they are being cheated because unscrupulous contractors avoid paying for things like CPP, WCB and EI. This same grey space in the economy can also lead to human trafficking and serious disregard for the health and safety of workers; long hours and horrendous conditions are not uncommon at such jobsites. Industry and government need to do more to protect workers."
The UBC Canadian District Office is seeking to partner with the federal government and take steps towards eliminating construction industry tax fraud.
The union is also inviting its members, members of other skilled trades unions, and all Canadians to join the fight by visiting the UBC's campaign website at StopTaxFraud.ca.