Canadian Contractor

Steve Payne   

Under-the-table residential construction worth $12-billion a year: StatsCan

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Residential construction is 28.3 per cent of the total $42.4-billion underground economy in Canada

Canadians spent $42.4-billion in underground economy transactions in 2012, StatsCan says in its latest report on the practice, released yesterday.

And residential construction is the highest contributing industry, the agency says, pegging the dollar volume of unreported transactions in our sector at $12-billion, or 28.3% of the total underground economy.

The residential renovation and repair business is worth $63.4-billion, according to a report last year from TD. $12-billion in underground transactions would represent 20 per cent of that amount.

Many media reports in recent years have given the impression that the underground economy is rapidly increasing in Canada – a reaction to increased taxes and fees. But the underground economy, according to the StatsCan report, is not actually changing much. It has been roughly stable, at about 2.5% of the Gross National Product, plus or minus 0.2%, since 1993. In 2012, the last year reported, the underground economy in Canada was worth 2.3% of GNP.


Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), was quoted in the Toronto Star as saying that government crackdowns on the underground economy have been based too much on “squeezing above-ground businesses” which are easy to find and audit. Government needs to go after the true underground operators, Kelly said.




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