Online platforms like Uber and DoorDash will be required to report information about their workers’ income to the Canada Revenue Agency by Jan. 31, following federal legislation that could shake up Canada’s gig economy.
The legislation in question, Bill C-47, is an amendment to the Income Tax Act that calls for platforms to share the information about their workers to the CRA every year by the end of January, with 2024 being the first reporting period.
The changes should serve as a reminder to gig workers to be careful about declaring income, even if it doesn’t fundamentally change how Canadians can, and should, file taxes, says H&R Block tax expert Yannick Lemay.
“It does not change how you should look at your taxes, because the rules for us, for the taxpayers, did not change,” Lemay said. “So it’s not changing how you report your income on your tax returns, but it changes how CRA might reconcile your income to find out if you have, indeed, declared all your income.”
Now, gig platforms will be required to report the name, date of birth, address and total income earned on the platform to the CRA, Lemay said, provided the worker in question logged more than 30 “activities” — which can be understood to be sales, trips, or assignments — on the platform and made over $2,800 on the platform during the year.
According to a survey conducted by H&R Block, nine million Canadians are part of the gig economy. Of those, 43 per cent said they’d be willing to risk not declaring all of their income in an attempt to pay less in taxes.
Though popular platforms like Uber and DoorDash are believed to be among those impacted by the legislation, the CRA said they could not confirm which platforms are required to collect and report information on gig workers.
Still, the agency defines a relevant “platform operator” as “an entity that contracts with sellers to make all or part of a platform (for example, software such as a website or application) available to them to connect with customers.”
Spokespeople for DoorDash and Uber told the Star they intend to comply with the reporting requirements by the deadline. Lyft and Skip the Dishes did not respond to requests for comment as to whether they intend to disclose the required information to CRA by the deadline.
Though the platforms are required to give their gig workers a copy of the information they provide to the CRA, the detail in the disclosures could vary by platform, and discrepancies between what the platform and the worker file with the CRA could raise red flags, added Lemay.
“I guess it’s going to invite people to be more careful of what they include in their tax returns, but we always have to be careful,” Lemay said, “because the penalties are very severe for not declaring all your income.”
Kelly Ho, a Vancouver-based certified financial planner with DLD Financial Group, said it’s almost an open secret that most people will only report income when forced to do so.
“I’m surprised it took them this long,” Ho said of the legislative requirements for gig platforms to report information to the CRA. “I think it’s trying to create fairness among Canadians, quite frankly, because it’s not fair for those who earn a regular salary who have no choice but to pay their taxes because it gets withheld at source.”
For gig workers themselves, this change could likewise be a positive one. Ho added that gig workers will earn RRSP contribution room as well as the option to contribute to CPP and EI, which she said “provide the opportunity for gig workers to contribute to their future.”
As it stands, gig work is already financially precarious, as the Star’s Ghada Alsharif documented in a recent investigation into Uber Eats couriers in Toronto.
Though the exact number of Canadians in the gig economy is difficult to ascertain, estimates from Securian Canada and the Angus Reid Institute put the total in the millions, with more than 800,000 Canadians citing gig work as their main job, according to Statistics Canada.
