Residential Construction Fueling Canada’s Underground Economy

Thursday, June 23rd, 2016
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New data from Statistics Canada says Canada’s underground economic activity totalled $45.6 billion in 2013, or 2.4 per cent of the country’s GDP.

In the report, residential construction industry made up the largest portion of the underground economy at 27.8 per cent, following by retail trade at 12.5 per cent and accommodation and food services at 11.7 per cent.

According to Statistics Canada, the underground economy includes both legal and illegal economic activity that isn’t tracked because of its hidden, illegal or informal nature. The study did not include illegal activities linked to drugs or prostitution.

By the numbers:

  • Since 2002, the proportion of underground economic activity as a part of the GDP has been stable at 2.4 per cent.
  • The highest proportion was 2.7 per cent in 1994, while the lowest was 2.2 per cent in 2000.
  • The underground economy accounted for 3.1 per cent of GDP in Quebec, which was the highest in the country, while Nunavut (0.7 per cent) and Northwest Territories (1 per cent) had the smallest underground economy.
  • The study noted that, by its nature, it is difficult to obtain information on the underground economy.  The date relies largely on assumptions and various indirect methods.

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