Canadian Contractor

Steve Payne   

I think the best idea (to combat the underground) is government tax credits for work done legally

Canadian Contractor Insurance

"Where I live (in B.C.) they are very soon going to implement a system where the building inspector is going to report to the electrical authorities, at the time of the inspection, any electrical work being done."

Last week we ran a comment from a French contractor, Jean-Claude, who reported on the way France deals with underground contractors. They punish both the contractor AND the homeowner who hired them. And they reward people who rat out underground contractors.

Kit, an electrician in B.C., responded by talking about what is happening with building inspectors reporting all electrical work being done, by anyone, to the electrical authorities, in her jurisdiction.

“I am an electrical contractor in B.C. and I get asked to do cash jobs all the time. I tell all of my customers that they can pay cash to all of their contractors (painters, drywallers, etc.) except their electrician. We are registered with the Safety Authorities and have $10,000 licensing bonds payable to them, as well as S/A permits. Insurance companies don’t sue drywallers or painters for the work they did. The idea from France that you published reminds me of what life in Albania must have been like under their dictator. Everybody spying on everybody else. And why should someone get a kickback from the government for reporting a cash contractor (or a contractor that just cut you off on the freeway)? The person who reports you could be the customer that had the work done. Always a sting operation somewhere. And if you are going to do a cash job it had better be for a good price, because the government plays hardball if they catch you.”

“Where I live they are very soon going to implement a system where the building inspector is going to report to the electrical authorities, at the time of the inspection, any electrical work being done. And the same for work being done by a building contractor. I know that this practice is used in many places, but not here yet. It will be interesting. Personally, I am not going to tell the other inspection authorities anything. I think that the best idea is government tax credits for work done legally, like they had a couple of years ago. Sure, the government has to set up the department, but it is a win-win situation for everyone. Ahhh– the joys of being self-employed contractor.”



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4 Comments » for I think the best idea (to combat the underground) is government tax credits for work done legally
  1. John Vannus says:

    With respect to shutting down the underground economy or any type of illegal non permitted work. The solution is very simple, this can be achieved without any government intervention or new laws, as a matter of fact this should be used as the biggest bargaining chip whenever a person purchases a residential or commercial piece of property. This is what you do, choose a home / building inspector or better yet hire a building contractor, an electrical contractor, a plumbing contractor and an HVAC contractor then you’ll have all the experts in their specific disciplines to give you a report on the property you are to purchase. Make this inspection a condition of sale as per standard protocol. When the trades do their inspections and MOST IMPORTANTLY !!!! have them check if any permits have been pulled on any work that they encounter that is not original to the building. If the reports come back with negative information the purchasers are then armed to significantly reduce that value of a property unless the current owners get the appropriate trades and permits in place to make the necessary repairs prior to the purchase being completed. And of coarse documentation that all permits and inspections have been completed would have to be provided to the purchasers lawyer. If the general public was made aware of the power they have in this area people would become very wary of getting any unlicensed or unpermitted work done on their homes or business’s. After all who wants to get $50,000, $100,000, $150,000 or even less for their home or commercial building because they saved a few bucks dealing in the underground. Or even worse if they can’t even sell their property at all because of all the illegal work done on it.

  2. Questo says:

    Hello John Vannus, you should sale your idea to the Queens Park, and if they take the bait, then they will finish them selves in a heart bit.

    First, your idea will never work, because a lot of small works in homes and commercial does not need a permit.

    Furthermore, advocating a cash less society only serves the bankers and crook governments, failing in your part to understanding how the economic structure works.

    If anytime the electrical power fails, the bank machines and computers fail to operate, if that goes on for weeks, mounts, etc, I wonder how you will solve your own economic affairs, if you haven’t have any cash available.

    With all these inspections ideas of yours, those looking for a home, will have to pay it. That’s what the home inspection does now, he/she looks for all anomalies in the property he/ she inspect. Your idea will became so expensive no one will afforded. Your idea is only good for those which have a lot of cash available to buy in the bargain of your idea discount tickets.

    Any contractor can demand payment in cash, whatever work he/she performs, in the construction/ renovation business, when the work to whom his done can’t be trusted in credit ways. A full payment can be demanded and be put in a trust account, either in cash or other means. Also the contractor is responsible for any
    any permits if their is a need for it. A lot of home owners only look to get the job done, will not have these permits later to show their lawyers in case of selling their property.

    The underground economy, sounds like a paranoia machine to make everybody hooked on the banks and government slavery machines, cashless society.
    Even if people buy the materials for works done on theirs homes, they pay tax,
    if they pay cash for the work, is their free chose to do so. The contractor and their clients are free to enter into any contract on their own free will, its private.

    Do you really get paid these days? Majority of workers get direct payment to their bank accounts, for the bank fee collection purposes, they hold people economic status, they hold the workers by balls, if anyone gets a such amount of their own money out, questions start to be asked, really? No wonder some people will work for cash.

    People these days own nothing, is just a pyramid scam, an elusion, please stop selling more elusion, and be more realistic for the days we all are, trying to make a leaving.

  3. Gary McKague says:

    A number of years ago the federal government hired 10,000 auditors to combat “the underground economy”. After operating for a few years, a Ren Can publication reported recovering 30M in taxes. A very expensive solution representing $3,000.00 recovered per auditor hired. Other solutions are in effect – all costing both government and businesses money – such as campaigns to educate about the issue, reporting requirements for the construction industry, running “snitch lines” which relies on, and allows, a small percentage of the population who have a destructive bent to wreck their damage. None of these address the real problem.
    In the construction industry a large percentage of the underground economy involves residential renovations. A home owner receives no benefit by paying “on the books”. In fact, it costs the homeowner much more in after tax dollars to incude the HST, Workers’ Comp and pay for the personal income taxes the renovator will have to pay by reporting the income. The fact is that AFTER TAX DOLLARS are worth way more than PRE-TAX DOLLARS. The home own must pay with after tax dollars. And so it makes sense for many to pay cash. They have already paid the tax to use this money to pay for renovations. One regulatory or tax change can change this entire scenario, do away with the need to establish a “snitch network”, hire special auditors at great expense, implement reporting systems and other time and money consuming efforts. The change is to allow a home owner a certain percentage of his/her home value to be considered as DEPRECIATION. This is done on business property. Why not allow for depreciation on a homeowner’s property? He has to spend money to maintain and improve it. Even at 2% of the purchase value of the home allowed per year, this amount will add up to being able to replace a roof, do renovations or landscaping upgrades or upkeep. This would be allowed as a tax deduction for the homeowner, when proper receipts for the work done are submitted. The homeowner is then able to spend PRETAX money on his property maintenance/upgrades, and the taxes are then paid by the recipient of the money, with an incentive for the homeowner to report such renovations and to seek out companies who will provide the proper documentation.

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