Yellowknife (Sep 27/06) - The Canada Revenue Agency was on a mission in Yellowknife last week, but it wasn't looking for any specific tax law breakers.

A team of six revenue agents were in the city to visit businesses and let them know about the problems created by Canada's underground economy, said Henry Vogelaar, Canada Revenue Agency Northern Alberta/NWT co-ordinator.

Henry Vogelaar, Northern Alberta/NWT co-ordinator with the Canada Revenue Agency, pounded the pavement in Yellowknife last week. He, along with five other revenue agents, visited more than 500 businesses in the city to inform them about the Canadian underground economy. - David Ryan/NNSL photo

More than 500 businesses in Yellowknife received a 10 minute cold call from the agents who talked to them about under-the-table work, said Vogelaar.

"With everyone who doesn't pay, regular taxpayers end up paying more," he said.

The revenue agents concentrated their visits on construction, automotive and hospitality businesses, but were also able to talk with a variety of other firms, he said.

While the tax dollars lost to the underground economy is difficult to calculate at the territorial level, he said more than $12 billion goes unreported in Canada every year.

Yellowknife was not singled out for the visit due to a poor performance. The agency attempts to visit communities on a regular basis, but had not been to the city since 1997.

"There is no reason to believe Yellowknife is any better or any worse than other cities in Canada,'" he said.

The revenue agents also informed businesses about penalties that could be assessed.

Businesses who knowingly avoid paying income tax are subject to a fine of 50 per cent of the tax sought no less than $100, said Vogelaar.

If a business knowingly avoids paying GST, the business is subject to a fine of 25 per cent of the tax sought and a monetary penalty of no less than $25 depending on how frequently a business pays its GST, he said.

"This can be a very serious matter," said Vogelaar.

People should be aware of what is going on in their community and their economy, said Jim Eirikson, acting president with the Yellowknife Chamber of Commerce.

"They are effected by it," he said.

While it is difficult to say whether there is a large underground economy in Yellowknife, Eirikson hoped that people would be more likely to pursue tax paying occupations in a busy job market like this.

While the Canada Revenue Agency doesn't have full-time employees in Yellowknife, revenue agents are in the city for two days every month at the Federal Greenstone building to answer a variety of questions from the public.