Minister's Underground Economy Advisory Committee meeting - November 30, 2017 - Record of Discussion
1. Introductory comments
The Minister of National Revenue welcomed participants and introduced guest speakers from the University of Ottawa and the Ontario Ministry of Finance. She noted that the underground economy (UE) is everyone’s problem, highlighting the importance of encouraging Canadians to be part of the solution and of working with key partners to exchange information and data in order to detect cases of non-compliance.
2. The Canada Revenue Agency’s Digital Services
The Canada Revenue Agency (CRA) presented on the digital services it offers to help encourage compliance through the use of modern technology. The CRA’s goal is to make it easier for taxpayers to comply, which can impact participation in the UE.
Advisory Committee members encouraged the CRA to continue developing these services, and offered the following suggestions and/or comments:
• Increase communications on when to use the online tools and where they are located.
• Consider changing the name of the “Represent a Client” portal as it does not resonate with payroll departments (they are the employer, not the client).
• The move towards electronic takes away the “live” interactions, which will be a challenge for industry.
• Notify taxpayers of changes to services in a more direct manner.
• Change the threshold for GST so that everyone has to register for it (no small business exemption).
3. Ontario’s activities aimed at combatting the UE
The Ontario Ministry of Finance presented on its efforts to address the UE with a focus on its recent advertising campaign, and the market research used to support it, launched in partnership with Consumer Protection Ontario.
Members appreciated the presentation and noted the following:
• Highlighting the risks of participating in the UE and the consequences for those who get caught.
• Giving consideration to the fact that the sharing economy is already in full swing.
4. An academic perspective on the UE
A PhD candidate in sociology from the University of Ottawa presented a sociological analysis of the UE and proposed ideas for effecting change on both the supply and demand sides of the UE. She highlighted that:
• Perceptions of risk change if a person is involved in a transaction with someone they know. The element of trust creates a moral justification for people to participate in the UE.
• Close-knit social networks give people a sense of trust, which makes consumers knowingly engaging in UE transactions less likely to identify with messaging that demonizes UE activity.
• Consideration should be given to the perceived benefits of participating in the UE, especially for marginalized communities, in order to better understand what incentives or nudging techniques may actually work.
• Messaging from the CRA and its partners on the UE should have a consistent tone and vocabulary, and be communicated repeatedly.
5. The CRA’s next UE Strategy
The CRA presented an overview of its next UE Strategy (to be effective April 2018) and provided details on its vision and priorities for addressing the UE over the next three years. The CRA also shared some of the tactics it intends to pursue that are over and above the day-to-day work that has always been done to combat the UE.
6. Closing remarks
The Minister of National Revenue asked committee members to contribute to the next agenda so that it reflects their suggestions on projects or subjects that are important to them. This information will help the CRA to better understand their challenges and put in place strategies that respond to industry needs. The Minister concluded by congratulating members for the work they have already completed on the UE.
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