Evidence of meeting #103 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was airports.
A video is available from Parliament.
6:30 p.m.
Liberal
Michel Picard Liberal Montarville, QC
Have you evaluated the potential size of the market if all this unknown revenue were to be declared and what kind of revenue we could get from that? As well, from your perspective, have you established what is a reasonable taxation level if you are apparently overtaxed?
6:30 p.m.
Chief Executive Officer, Canadian Home Builders' Association
I'm just passing on what Canadians feel in terms of what drives the underground economy. In terms of the size of the underground economy—
6:30 p.m.
Liberal
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
Hold on. Mr. Lee can quickly answer one short question, then we have Mr. Dusseault, and then we'll have to pack it in.
Mr. Lee.
6:30 p.m.
Chief Executive Officer, Canadian Home Builders' Association
The underground economy in Canada is estimated to be around $20 billion at least. The opportunity to bring it above board is very much a function of how we change cultural norms, because that's really what it comes down to.
6:30 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Lee, I am surprised that no one has yet talked about a program like ecoENERGY, which operates very well in a province like Quebec. The program requires entrepreneurs to declare what they are doing and to be members of the Association des professionnels de la construction et de l’habitation du Québec (APCHQ), or of another construction association. It also requires customers to have receipts and to submit them to the government in order to prove that they have in fact made the purchases that allow them to obtain a credit under the ecoENERGY program.
Your notes make no mention of demanding the return of the federal ecoENERGY program. Is that intentional, and if so, why?
6:30 p.m.
Chief Executive Officer, Canadian Home Builders' Association
Yes, we have. We were big supporters of the ecoENERGY retrofit program, and that's why we recommend the return of a renovation tax credit that would be aimed at energy efficiency, for example. It would be similar to the Energuide rating system, which is very good. Getting labels on houses really helps people appreciate the value of energy efficiency.
Rather than a grant program, our recommendation is to do it as a tax credit program instead, simply because of the enforceability and because Canadians are much less likely to want to defraud Revenue Canada as opposed to getting a grant. The Revenue Canada approach has a lot of incentives in that sense, and it's easier to enforce because if you defraud you've committed tax fraud, which is different from saying, “Well, I got a grant, but I might not have given you the entire truth.”
In terms of its success in the underground economy and combatting it, it's been excellent, so we'd be very supportive of the return of that type of thing.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
It's the very last question, because we were five minutes late to start. Keep it very short please, Mr. Poilievre.
6:30 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Mr. Lee, you mentioned that higher taxes generally lead to a bigger black market in home renos and construction. Do you believe these latest proposed tax increases on small business owners may have that effect as well?
6:30 p.m.
Chief Executive Officer, Canadian Home Builders' Association
Absolutely, unfortunately. We hear about it. We have a major campaign in our association to help our members fight against their competitors who deal in the black market. But there's no question, and we see it all the time. As I said, when taxes go up in the different provinces, there's an immediate reaction in terms of the underground economy going up.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay, I just want make a point on the underground economy. If members want to test out that it's there, I'd suggest all you need to do—I've had it happen to me—is put out an offer that you want to fix your roof or paint your house, and go to three contractors or individuals. I imagine you'll be made an offer. It is something we need to address.
Just to inform panellists: we got into the small business tax as expected, but I want to remind people that consultations are ongoing. They go on until October 2. Make sure you get your information in to the Department of Finance, and we as a committee are going to hold hearings on this next week in addition to the pre-budget consultations. There will be a button on our website for you to put whatever information and concerns you have to the finance committee, as well, and that will also be transferred to the Department of Finance. We will not make recommendations, but we will submit what people submit to us.
With that, thank you very much for your presentations and your brief before that, and I thank the members for their questions.
The meeting is adjourned.