The Carpenters’ Union in Canada is calling on governments to take a partnership role in combating construction fraud including increasing transparency in the procurement of government-funded projects as the union kicks off its annual Tax Fraud Days of Action week.
Finn Johnson, director of government relations for the Canadian District of the United Brotherhood of Carpenters and Joiners of America (UBC), says crooked employers who pay in cash cheat workers out of protections they are entitled to, operate unsafe workplaces and cost taxpayers billions in tax support, depriving communities of programs and services.
“This is a big issue in our industry,” said Johnson, noting the underground economy accounts for $61.2 billion in economic activity, with residential construction being the worst offender, amounting to 26.2 per cent or $16 billion. “That’s a lot of money and this is happening on the backs of workers that are being exploited.”
This year the Tax Fraud Days of Action campaign runs from April 13 to 19 with the theme Ask Yourself Why.
Johnson said it’s important the union sets aside time each year to update politicians, stakeholders in the industry and the general public on the different ways that unscrupulous employers harm the system, and to press for regulatory change.
Message is getting through
As part of its campaign, the UBC is calling on Canada Revenue Agency to assign an auditor to work with the UBC to help identify contractor tax fraud through reported leads on suspected tax or benefit cheating submitted to the CRA, and it wants government to introduce legislation to impose stronger general contractor liability for subcontractor violations.
“We’ve had some very strong, very productive discussions with elected officials and other financial institutions on these issues. There’s definitely a greater awareness of the issue,” Johnson said. “The reception that we’ve got is that this is definitely something that we need to look at and try to put solutions, whether they be legislative solutions or procedural solutions in terms of the procurement process, in place to really try and root out this issue.”
The campaign is also an opportunity for the UBC to address its own members about the harms that come with co-operating with underground employers.
Construction workers being paid in cash often don’t realize they’re being put in dangerous situations, the UBC said, and how they lose out when employers fail to pay the requisite HST, CPP, EI and workers’ compensation premiums.
The Ask Yourself Why theme encourages construction workers paid in cash to ask why they earn less than their peers, or why they are forced to pay out-of-pocket for medical expenses due to a workplace accident.
A competition issue
Johnson said cost-cutting business practices make it more difficult for legitimate contactors to stay competitive.
The union’s North America-wide campaign reaches out to industry players at all levels to make the point, from owners, developers and general contractors to subcontractors and labour brokers.
“We’ve held rallies every year across the U.S. and Canada, because this is an international campaign and we’re going to continue to get that message out, educate and talk to key decision-makers, both on the financial institution side and also elected officials, to let them know that this is how we can better work together to prevent this practice from happening on such a scale.”
The campaign will also include jobsite rallies and talks, media outreach and intense social media messaging.
“It’s not something that’s going to happen overnight,” said Johnson of the effort to drive cheating employers out of the industry. “That’s why we’ve been at it for a number of years already, and we’re going to continue to fight for fairness in our industry and a level playing field for contractors and making sure workers get the protection they deserve.”
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