Working in Toronto "Under the Table"
Toronto has always been a place where, depending on the sector, if you looked hard enough, you could often find a job that paid you in cash. In other words, you could find work under-the-table. The construction sector – the trades as they say – and the restaurant and pub business have both traditionally been areas where cash jobs are more prevalent than say, hospital administrators, or Canada Revenue Agency forensic accountants, to give a couple of examples. The retail trade in general has been where you’re more likely to find cash work in the past.
But in the last few years, starting in late 2014, the availability of cash work in Canada has been changing. If you are, say, an international student studying in Toronto and looking to earn a few extra dollars but without a temporary work permit, you might be tempted to look for under-the-table work; the kind that pays you cash and doesn’t give you T4 records or pay slips. In general, if you do so, you will be risking your entire stay in Canada, and could find yourself being deported if it is discovered that you are working illegally in Canada.
Blame the Conservative government of Stephen Harper. Or praise them, if you’re a hard-working honest, hockey-loving, Tim Horton’s sipping, regular Canuck who pays her taxes. You see someone has to pay for the Canadian universal health care system and the still fairly reasonable tuition rates at Canada’s universities, colleges, and technical schools. That means that education from K-12 through grad school has to be subsidized. Not to mention the other welfare benefits that accrue to Canadians from coast to coast. It all has to be paid for by someone. That someone is you. If, that is, you pay your taxes. And also your employer. If she or he pays their taxes.
In late 2014, Federal Minister of National Revenue, Kerry-Lynne Findlay announced the newly formed Underground Economy Advisory Committee. What was revealed in that press conference is essentially a War Cabinet against the Underground Economy. And you’ll be glad to know it’s still well in place under the new Liberal government. Governments need revenue. It’s that simple.
So, you’d think that the Underground Economy (any undeclared economic activity) is rampant in Canada and we have a national crisis on our hands.
Not really. In 1992, Canada’s underground economy was estimated at 2.9% of GDP. Well below most developed nations. In the last few years, it has been holding steady at about 2.3% of GDP. The only major OECD nation with less cash work as a percentage of their economy? Norway, those self-righteous Nobel Peace Prize-awarding Scandinavians. In France the underground economy is close to 8%. Hungary? Try almost 13%. And Italy? Close to 17%. Arrivederci signore ispettore delle tasse.
But nevermind that as, when it comes to taxes, Canada is as clean as frozen lake in Algonquin Park in late January. There is now a three-pronged strategy to lower our enviably low rate to even less. It is made up of:
- An effort to further refine the government’s understanding of the underground economy. Massive surveillance in other words, across all data sets the government can get their hands on.
- An effort to reduce the social acceptability of participating in the underground economy. Translation: massive snitching and shaming, using various media channels. They’re everywhere.
- The use of a wide range of initiatives to encourage compliance. You thought tax inspectors could sometimes get a little mean? You haven’t seen anything yet. Their specialized audit teams will be “focusing our audit resources on taxpayers who are at risk of non-compliance.”
The main question is, will these government schemes actually make a difference in the areas where cash work is considered acceptable by many (if not always a majority) of Canadians? Will cash payments for a new backyard deck suddenly become a thing of the past? Will thousands of tax inspectors across Canada suddenly descend on every bar, café, and burger joint in the nation demanding to see every server’s T-4 slips and an Excel printout of their estimated tips?
Not likely, but the environment for under the table work is tougher nowadays in Canada compared to years gone by. As stated in their Underground Economy Strategy, they are going to focus on sectors where cash payments are more common. While it may not affect you directly, it will affect those who might have been willing to hire you off-the-books. That means less people willing to pay cash for work and not declare it.
Remember, it’s not illegal to pay cash for work in Canada. It is illegal not to declare the payments, both as employer and as employee or part-time worker. And that’s something CRA will be busy reminding employers and customers of over the next years. Getting work under the table in places like Toronto is getting tougher, make no mistake.
Working under the table can also risk your status in a number of ways:
- If you're here on a visitor visa, working is illegal, regardless of whether or not you work "under the table"
- If you're here on a work permit, working for someone you don't have a work permit for is illegal
- If you're here on a study permit, working more than you're allowed is illegal
All of these situations could lead to loss of status and worse (deportation order, exclusion order), so don't do it.
There are different issues for permanent residents. If you're a PR, you need to prove that you lived in Canada. Working under the table makes it harder to do so and could lead the government to believe you are not meeting the residency obligation. So don't do it!
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