Canada Revenue Agency Launches New Underground Economy Strategy During Tax Season


The Canada Revenue Agency has launched its new strategy to combat non-compliance with its taxation regime as Canadians are currently going through the filing process.

The agency says its strategy is centred around three pillars to target the underground economy, with the first one being identifying the activities through data research, analysis, and third party collection processes.

The other pillars are prevention through early outreach and addressing the activities with tailored approaches based on the level of risk of non-compliance.

The strategy was released in mid-March and flagged by Blacklock’s Reporter.

The Canada Revenue Agency (CRA) says the underground economy includes “economic transactions in goods or services which are unreported, resulting in failure to comply with tax laws.”

This can include services paid in cash to a contractor who then doesn’t report the income and the GST/HST, or the failure of a business to remit taxes collected.

The underground economy also includes illegal activities.

“Income earned from activities such as theft, fraud, and the sale of narcotics is taxable and has to be reported as income, despite its illegal nature,” says the CRA.

The agency says the size of the underground economy in Canada was estimated at 2.7 percent of the gross domestic product in 2021, or $68.5 billion.