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Tax fraud in the construction sector is costing the province billions of dollars every year

This is a very common issue, which has aggravated since the start of the COVID-19 pandemic.

Rodrigo Díaz M.

The province of Ontario is losing hundreds of millions of dollars every year because of underground activities in the construction sector. The most prominent of these illegal activities? Tax fraud.

“It’s a real issue in the construction industry that these underground contractors are taking money away from legitimate industries, contractors and workers”, said Mike Yorke president of both the Carpenters District of Ontario and of Carpenters & Allied Workers, Local 27. “It’s something that unscrupulous cheating contractors are engaging in more and more”.

Local 27 has launched a new multimedia campaign in order to face these illicit activities that have sapped revenue from the province in this time where it’s needed the most.

“We have less money to invest in our healthcare, we have less money to invest in our transportation system”, said Yorke. 

“The province needs revenue to provide Canadians the services, the healthcare and the support that they need, especially during this critical time in our country”.

The latest data from a study commissioned by Ontario Construction Secretariat suggests that the province of Ontario has lost between 1.8 and 3.1 billion dollars on a yearly basis from tax fraud perpetrated in the construction industry from 2013 and 2017. This represents an increase of 30% since the last commissioned study in 2009, where annual revenue loses were calculated at anywhere between 1.4 and 2.4 billion dollars.

But Yorke says that this doesn’t happen just in Ontario, it’s widespread issue all over North America.

Tax fraud being committed by certain parties in order to increase their income, which also suggests that the persons involved in these illegal activities, acting as subcontractors, are cutting costs where most needed.

“We know they don’t have proper health regulations in place that are required during these times or even the minimum safety measures that have been always required in workplaces”, said Yorke. “We also know they exploit undocumented workers of new immigrants”.

Yorke also said that this situation has been aggravated by the pandemic.

“There are many, many workers out there that are desperate for any type of employment, they have been hurt badly, a lot of people are unemployed and they’re taking whatever work is available to them”.

“Rip off the worker and rip off the community and then unfortunately that is going on and on. I will say that the carpenters in partnership with our contractors are working hard to address this in order to overcome it and to educate the political decision-makers that something needs to be done about it”.

The president of Local 27 said legitimate construction contractors have taken every safety measure possible and followed the rules stated by all levels of government in order to keep the workers safe at their workplaces.

“We have accepted the responsibility. We in partnership with the contractors have implemented protocols on each and every job site. The hand-washing facilities, the washroom facilities, these have all been put in workplaces and upgraded as required”.

“I think the construction industry has come a long way and through collaboration and now all of us have come to the table, which has resulted in better and safer places for construction workers in Ontario”, said Yorke.

The initiative “Stand Up to Tax Fraud” that is being launched by Local 27 focuses on the “Days of Action”.

From April 14 to April 17 Local 27 encourages people to contact all levels of government and enquire about how they are protecting their communities, ask them to enforce the law and plead for an increase in the funds for investigations related to tax fraud.

More information can be found in the following website: https://stoptaxfraud.net/

“I truly believe we’re stepping up in terms of communications. We are using television, radio, internet, all social media platforms, and the print media”, said Yorke. “We are working hard to get this message out because we think that this effort will result in better workplaces for Ontario workers and we believe that it will result in the revenue that our provincial government requires to build up our infrastructure and help all Ontarians during these hard times”.

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