Commission on the Reform of Ontario's Public Services

Chapter 18: Revenue Integrity
Appendix: <strong>Commission</strong> Recommendations
Recommendation 18-1: Work with the federal government to ensure that a fair share of a
company’s worldwide income is allocated to Canada and the provinces.
Recommendation 18-2: Work with the federal government to address aggressive
interprovincial and international tax avoidance activities by:
� Undertaking additional data review and research to identify activities of particular concern
to Ontario;
� Entering into an agreement with the Canada Revenue Agency to invest resources
in additional compliance efforts; and
� Implementing additional reporting requirements that disclose activities that cause income
and losses to be allocated to a province where the underlying economic activity was
minimal or did not occur.
Recommendation 18-3: Collaborate with the federal government and other provinces to
investigate options to tax corporations on a consolidated basis, with the purpose of ensuring
a fair allocation of losses and income across Canada.
Recommendation 18-4: Enhance Ontario’s ability to detect and recover revenues from
underground economic activity by linking more databases to reported transactions for
tax purposes.
Recommendation 18-5: Review the adoption of government-authorized sales-recording
modules in certain sectors (e.g., food services) to address “zapper” software (zappers remove
a vendor’s record of sale).
Recommendation 18-6: Develop a concept of self-certification of electronic point-of-sales
(ePOS) software. The self-certification is based on the principle of tax authorities developing
and publishing a set of requirements for accounting software and ePOS systems.
Recommendation 18-7: Develop a public awareness campaign on the impact of the
underground economy. For example, by using unregistered contractors or contractors who do
not issue receipts, there are risks of not obtaining a warranty for repairs, risks of not being able
to seek legal remedy for poor workmanship, and risks of liability for injuries or damages that
occur on a customer’s premises.
Recommendation 18-8: Create employee deeming provisions where businesses substitute
independent contractors for employees to avoid paying Ontario’s Employer Health Tax.
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