Mr. Speaker, a recent report was prepared for Human Resources Development Canada based on an 18 month study into underground economic activity, the $92 billion a year construction industry. The report was prepared by the consulting firm, KPMG.
The study which ended last fall was conducted by a working group headed by a consortium of consulting firms and involved a half dozen federal departments and agencies including Revenue Canada, Finance, Statistics Canada, Industry Canada and Canada Mortgage and Housing Corporation.
Government suspects and those in the industry claim the construction workers operating in the underground economy are padding their untaxed earnings with EI, welfare or workers' compensation. Governments fear that underground activity in this area is undermining their ability to fund those same social programs, as well as the Canada and Quebec pension plans.
The abuse and undermining of social programs are only two of the disturbing findings of the study into an industry long suspected of being a major player in the underground economy where otherwise legitimate activities are hidden and not taxed or regulated.
When the untaxed wages of workers in the underground economy are added on to social program payments, they often earn more than workers on legitimate construction jobs, according to the report, and it so notes. Those workers are also putting their future financial security at risk.
Workers are being pressured into accepting less than legitimate working arrangements under which employment insurance premiums are not deducted, workers' compensation is not provided, and there is no protection against dangerous or unhealthy working conditions.
It would appear that while economic factors are the largest factor in driving the underground economy, the picture is complicated by other factors including politics, an inverted sense of self-righteousness, various forms of sociocultural motivation and the role of EI, workers' compensation, social assistance and other benefits. The underground economy therefore is not only flourishing, it would appear, but it is also growing.
I would like the parliamentary secretary to outline exactly what the government plans to do to correct the abuse and what the government plans to do to stop the undermining of our social programs as a result of this underground activity.