June 18, 2008

Canadian Construction Association Board Meeting

CCA gives conditional support to federal Contract Payment Reporting System

VINCE VERSACE

staff writer

The federal Contract Payment Reporting System (CPRS) has once again received the conditional support of the Canadian Construction Association.

CCA’s finance committee agreed at its recent board meeting in Toronto that continued support of CPRS is a means to ensuring a level playing field in the industry.

“We would like to maintain the status quo for support,” said John Schubert, of Winnipeg-based McCaine Electric and chair of CCA finance committee.

“However, we would like to distance and distinguish ourselves from home builder issues.”

Questions about whether CCA’s support of CPRS would change or be altered began when the Canadian Home Builders Association (CHBA) withdrew its support of the CPRS. CHBA is instead calling for compliance holdbacks because it believes CPRS is only discovering under-reporting and not addressing the so-called cash economy.

CCA President Michael Atkinson agreed too often the federal government considers the issues of home builders as those of CCA and its members. CCA’s original conditional support for CPRS focused on it proving to be effective in addressing the underground economy.

The benefits to both the federal government and the construction industry had to outweigh the administrative costs to government and the compliance costs to industry, added Atkinson.

CPRS has been in place for nearly a decade. A majority of contractors currently on the finance committee said it still has not been a burden to them at this time.

A 2004 report on the underground economy by economist John O’Grady of Prism Economics and Analysis suggested that 25 per cent of the entire construction work force participates in the underground economy, with 15 per cent of that total engaged in ICI construction.

O’Grady estimated that governments lost $1.3 billion in revenue between 1998 and 2000, climbing to $1.6 billion in 2003.

The government has increased audit resources but it is widely accepted that these measures have had limited effects because audits are not done on the construction site, stated O’Grady.

Also, while accounts may look suspicious, they do not easily show that workers labeled as independent operators are actually employees.

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