Section C: Addressing the Underground Economy and Unregulated Tobacco

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The underground economy creates an unfair and illegal advantage for businesses that fail to play by the rules. Maintaining the integrity of the tax system ensures the government has the resources necessary to fund critical public services and improve people’s lives in Ontario.

Underground Economy

The government continues to make progress in fighting underground economic activities in the province through:

  • Ongoing enhanced compliance-focused measures that have generated over $1.4 billion for Ontario since 2013–14, a $165 million increase over the amount reported in the 2017 Budget;
  • Launching a comprehensive social media campaign that informs the public about how participation in the underground economy puts the people of Ontario at risk; and
  • Working to develop information-sharing agreements to support analytics that will lead to better decision-making and targeting of compliance efforts that address high-risk activities.

Building upon this, the government is proposing amendments to the Ministry of Revenue Act to enable information sharing with entities that administer legislation or regulations on behalf of government, and to publish convictions under tax statutes to raise awareness and encourage compliance.

Ontario will continue to effectively target high-risk sectors to directly address the underground economy through a new, enhanced services agreement with the Canada Revenue Agency (CRA) aimed at strengthening revenue integrity and increasing tax fairness.

Unregulated Tobacco

To reduce the availability of unregulated tobacco and ensure compliance with tobacco laws in Ontario, the government will move forward with:

  • Regulating cigarette filter components, such as acetate tow, effective January 1, 2018;
  • Strengthening partnerships with the Ontario Provincial Police’s Contraband Tobacco Enforcement Team and local police services; and
  • Proposing amendments to provide additional grounds for issuing, suspending and cancelling registrations issued under the Tobacco Tax Act.

The government will continue to work with communities and enforcement agencies to address unregulated tobacco, as this issue undermines the Province’s health objectives and compromises public safety through links to organized crime.