Do I have to run this country myself?
I heard this from my father every time there was any hint of anyone dodging taxes. It offended his sense of duty and fairness to think that others were not making their contribution to the system that collectively we’d all agreed on.
I agree with him.
Canada’s underground economy in 2021 (the last year Stats Can data are available) was estimated at $68.5 billion, or 2.7% of GDP. The residential construction industry was estimated to account for a whopping 35% of the economic activities that escape measurement because of their hidden, illegal, or informal nature.* This doesn’t particularly surprise me. I think of various home repairs I’ve had done, and invariably there’s been a casual offer for me to pay less if it’s a cash deal, a way to avoid sales tax for me, and income tax, for the service provider. I decline, telling them that I am perfectly happy to pay my share. I’d also be worried that the work would be done shoddily and I’d have no proof of the relationship down the road. Such an offer just doesn’t instil confidence.
Once I was caught in a long-term cash-only relationship. I don’t know how it evolved but somehow I started paying cash to my hairdresser when he began my cuts in the early ‘90s. He didn’t take VISA, my favoured payment method, so cash was the alternative (Interact wasn’t common then). Once when I didn’t have cash, he asked that my cheque be made out to “cash.” We were years into a client/stylist relationship then and his cuts were great. I didn’t want to find someone else. He retired during the lockdowns. It defies logic that he wouldn’t have caught the attention of the tax authorities showing minimal income as he must have, despite his tony Yorkville salon. Of course, I didn’t ask. To know would have made me even more complicit and so I held my tongue and my nose. I shook my well-coiffed head with disgust every time I left the salon. It was his transgression, not mine.
Regular blog readers know that I met my husband when he fixed my fridge.** My life might have taken quite a different tack but for the above-board transaction. When I reported to my mother that I’d met someone and how, her first question was “did he charge HST?” He sure did, and I still treasure his invoice from that life-altering day.
As with most of us, the chamber I live in echoes back my worldview — my world is full of people who believe strongly in the income redistribution that results from tax-paying. We all know that in a democracy, the way to effect changes in tax policy is not dodging the taxes levied, but rather electing a government whose tax policy better reflects our values. When I posted something on social media yesterday about the shocking increase in food bank use, one of my circle replied in irony: “If only there was some way the public could pool our money somehow and create a public fund that could be used to provide a reasonable amount of social assistance to those in need …”. If only! perhaps she might have questioned why a bunch of us are participating in such a system but it’s never enough partly because a bunch of other people are dodging their contribution.
I had occasion this week to confront the counter view head-on. After the dark days of the pandemic when I had to live in my own filth, I found a great cleaning woman - she does a good job, she has a flexible schedule, her rates are reasonable, and she’s pleasant to deal with. She cleaned my main house when I lived there. Now she cleans Chandlerville bimonthly and the main house when I have a changeover of tenants. She asked for cash, and for the same reasons and with the same degree of enthusiasm as with the hairstylist, I agreed. Pick your battles, I told myself. After all, it’s her legal obligation to declare the income, not mine. But now that I have a rental situation, it’s different. Cleaning costs are a legitimate expense against rental income and I need proof. When I asked for a new payment arrangement, she said she’d “check with her accountant” I even offered to pay more per visit. I followed up this week on my request. Nope. Her accountant doesn’t see a way. (I’d love to know who this sketchy accountant is.) Upshot: I can’t claim legitimate expenses to lower my tax burden but she can pay no taxes at all. This isn’t fair. Lest you think I’m being hard on someone who is struggling, I assure you all signs point to her being a middle class homeowner living a life not much different from mine. We differ only in our taxpaying practices.
Right now much is being made in Toronto about property tax. Years of electing mayors on below-inflation taxation platforms followed by a costly pandemic has resulted in a city with a $1.8 billion shortfall. Mayor Olivia Chow*** was elected promising only a modest increase. Many of us knew her promise just wasn’t realistic. We have refugees living on the streets, tent cities are normal, our transit system is falling apart, and there’s a housing affordability crisis. Olivia’s here to “fix this financial mess,” and doing so is going to take some money. It’s no surprise, then, that her budget proposes a 9.5 percent increase in property taxes estimated to be about $1 / day for most Toronto homeowners. Am I excited personally about paying more? Not particularly. Like everyone else, I am also looking more carefully at my spending, as all the bills have crept upwards at a rate we haven’t been used to. But I also know that we need better transit, more housing, increased social services, and so on. If the feds and the provincial government can’t pony up more money to fund the economic engine of the country - Toronto - then property owners will have to do so. Nothing is free.
So, now, does anyone know a good cleaning service in Weston? Tax dodgers need not apply.
* You can read more by clicking here
** You can read that story, ‘Call me Jack,’ published by Ariel Chart International Literary Journal found here.
*** I wrote about her electoral victory here.
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