Mandatory WSIB coverage combats the underground economy: OCS
January 14, 2013 By Ontario Construction Secretariat
Jan. 15, 2013 —Ontario’s recent change to make Workplace Safety and Insurance Board coverage mandatory in the construction industry is an important component in combating the pervasive underground economy, says the Ontario Construction Secretariat.
Jan. 14, 2013 —
Ontario’s recent change to make Workplace Safety and Insurance Board
coverage mandatory in the construction industry is an important component in
combating the pervasive underground economy, says the Ontario Construction
Secretariat. The OCS is a lobby group for unionized construction workers and their employers.
The report reads as follows:
of January 1, 2013,
almost every construction worker in the province of Ontario is
required to be covered by the WSIB, a move that closes a loophole that allowed
many contractors to style their employees as independent contractors.
mandatory WSIB coverage, many Ontario
construction workers were able to not only evade their taxes which fund
important public services, but to also avoid making contributions to the funds
that compensate injured workers,' says Sean Strickland, CEO
of the OCS. 'By closing this loophole, the government has taken an important
step in prohibiting the underground economy in Ontario
OCS has conducted several studies on the underground construction economy in
response to growing concerns expressed by contractors and construction unions.
studies provide evidence that:
Underground construction activity amounts to
between $1.4 billion to $2.4 billion in evaded taxes and WSIB fees, funds that
are being siphoned away from public services at hospitals, schools and injured
workers’ medical expenses;
- Classing employees as ‘independent operators’
provides contractors with an unfair and illegitimate competitive advantage
ranging from 20 per cent to 50 per cent of labour costs; and
- The underground economy undermines the coverage
of benefit plans and weakens support for apprenticeship and training. By
shifting costs onto others, the underground economy increases the operating
costs of workers and contractors who follow the rules.
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