Mr. Speaker, it is always so nice to follow the doom and gloom party.
It is a pleasure to speak today on Motion No. 382 introduced by the member for Mississauga South. Basically the motion calls on the government to consider establishing initiatives to address the massive underground economy that exists in Canada today.
The issue is of concern to me and should be of concern to all Canadians. I have even managed to address the matter while I was vice-chairman of the Standing Committee on Public Accounts. I had the opportunity to ask one witness, a deputy minister at Revenue Canada, about Canada's underground economy. He said that a lot of the situations which caused the underground economy were for elected representatives to discuss and address. This is what we are doing today. My colleague from Mississauga South has proposed ways to address the problem I spoke about before the committee.
The underground economy has a great deal of strength in Canada. The exact size of lost revenue is unknown, with estimates ranging from $20 billion to $140 billion a year. What is known is that each time someone participates in the underground economy money to help pay for our programs such as health care or education is lost and will most likely never be recovered.
It is safe to say that we are taking money from ourselves by being part of the underground economy. We must ask ourselves what is causing this type of economy, one the Minister of Finance does not want to see grow. It could be the threat of taxes. It could be the problems with the Department of National Revenue. It could be the perception that the system is bogged down in bureaucratic red tape. It could be a lot of things. Is it the hated GST? For whatever reason it is real. The underground economy is alive and well.
I hear stories in my riding of Victoria-Haliburton about welding shops which have gone out of business and now operate out of a truck and only collect cash. I hear of car body shops that only deal in cash, buy their materials in cash and pay their employees in cash. It has been said that there are restaurants which pay students cash and tell them not to report it. Some people have told me of contractors who continually give two quotes, a quote for cash and a quote for the legitimate way. Furthermore, some people have actually removed their business listings from the phone book so they can work in cash.
I know a lot of these people were never tax cheaters in their lives, but they may have been forced into operating this way or feel they have to operate this way because they have been doing it for so long and penalties would be too harsh if they come out and operate honestly.
One part of the motion is designed to address the situation precisely. The second part of the motion is designed to give some relief or limited forgiveness on interest and other penalties payable when a taxpayer voluntarily declares previously undeclared income.
Be honest and you won't be punished is the message in the motion. Another part of the motion suggests educating the public about the problem and encouraging its participation in solving the situation.
Our tax system is based on taxpayers voluntarily filing and paying their taxes. It is probably the least expensive way for the federal government to collect taxes owing. However there are some who do not pay which gives some businesses an unfair advantage. In the long run, if every Canadian paid their fair share, we would be further ahead. Most important, we would be paying in a far fairer way.
Nothing is more frustrating for small businesses such as contractors bidding for a job to lose the bid because the competition put in a low bid and an under the table bid.
Another part of the information campaign deals with ensuring people realize the federal government, in particular the Department of National Revenue, is addressing the problem of the underground economy. In the future more people will be exposed for contributing to the underground economy and once caught there are some serious consequences to consider. Furthermore the information campaign must stress that jobs are lost when the underground economy flourishes.
Canada must begin to realize that doing things above board is in the best interest of everyone involved. At the same time this part of the motion calls upon us as a government to help to create an atmosphere in which doing things above board is acceptable. There are other ways to encourage people to do things above board and the third part of the motion touches on them.
The third and last part of the motion deals with giving tax credits to people who are doing home improvements or renovations. The idea is to diminish the two-quote system which already exists. It also creates a paper trail that can serve as a primary vehicle for the information campaign I mentioned earlier.
We as a government must make sure that society is not punished for being honest. We must create an economy in which hard work and dedication are rewarded. We do not want to send out a message that it is all right to operate in the underground economy because everyone else is doing it.
One of our priorities when we were elected was to focus on jobs and growth. The motion helps to maintain that message and I urge all members to support the idea of the hon. member for Mississauga South.