Minister's Underground Economy Advisory Committee meeting - May 29, 2017 - Record of Discussion
1. Introductory comments
The Minister of National Revenue welcomed participants and introduced new members of the Minister’s Underground Economy (UE) Advisory Committee. She stressed that the UE is a concern to all Canadians.
2. Communications Activities
The CRA presented an update on the communications work that has taken place since the last Advisory Committee meeting, including results from the UE advertising campaign that ran in February and March of 2017 and of bilateral teleconferences held between the CRA and Advisory Committee members.
Advisory Committee members were asked to discuss barriers faced by their membership as a result of the UE, and provide input on how the CRA’s communications could be enhanced to help address these barriers. Some of the key suggestions offered were to:
• Focus future ad campaigns on specific sectors.
• Establish longer/sustained campaigns that have a greater impact on attitudinal change.
• Use graphics/visuals on social media.
• Use communications to better explain risks of participating in the UE (e.g., in dealing in cash).
• Look for new venues to share messaging (e.g., financial literacy programs).
3. Business-to-Business Reporting
The CRA presented on program options on reporting of fees paid for services between businesses using the Statement of Pension, Retirement, Annuity, and Other Income (T4A).
Advisory Committee members encouraged the CRA to continue developing this program, and made several points to guide its design:
• The current $500 threshold on the T4A is too low for businesses – it adds an administrative burden.
• A gradual implementation of reporting and penalty application would help to reduce the burden.
• Use a calendar year as opposed to fiscal year for the reporting cycle.
• Include an IT solution that is easy to use.
• Businesses dealing with contractors who do not have a Business Number (BN) are not comfortable with requesting a Social Insurance Number (SIN) for reporting purposes - consider asking all businesses to get a BN (even if they are a sole proprietorship or partnership for example).
4. Leads Program Update
The CRA presented on the Leads Program’s future and led a discussion on how to strengthen citizen engagement and how to increase the quality of leads received.
Advisory Committee members reiterated the importance of the Leads Program in fostering engaged citizenship and a culture of compliance. They offered the following suggestions:
• Focusing on corporate leads (businesses providing leads on their non-compliant competitors) may be more successful than soliciting individuals about individuals.
• Taxpayers may be more interested in submitting leads if they understand how lost tax revenue hurts them and understand that they have a stake in a fair tax system.
• A leads-focused advertising campaign may have a positive effect in obtaining quality leads.
• Members reiterated that the anonymity of Canadians submitting leads is their top priority.
5. The CRA’s Underground Economy Strategy
The CRA gave an overview of the next UE Strategy that will be based on three themes: social acceptability and engaged citizenship, the use of third-party information, and emerging business models.
Advisory Committee members offered the following comments for consideration in the next UE Strategy:
• Develop effective UE messaging to reduce social acceptability (e.g., “what’s in it for me?”; use of positive testimonials).
• Leverage the Liaison Officer Initiative (LOI) as a tool to promote good compliance.
• Increase focus on education (builders manuals, trade schools), with a focus on youth to obtain a cultural shift.
• Consider maintaining the “Get it in Writing” Campaign as it continues to be an effective means to reducing participation in the UE.
• Cheque cashing institutions continue to be an avenue for those participating in the UE.
• Use industry cultural trends, such as an increased focus on safety among contractors, to amplify UE messaging.
• The new business models (e.g., sharing economy) are emerging and will continue to grow - need to ensure fairness between the traditional models and the new ones.
6. Closing remarks
The Minister of National Revenue noted the contribution of the Advisory Committee members and she outlined her vision for Canadians’ relationship with the CRA, emphasizing the committee’s important role in sustaining a relationship of mutual respect. The Minister concluded by thanking them for their continued engagement on UE issues.
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