Don't get nailed under the table, contractors warn consumers

Registered contractors have launched a media campaign to persuade Newfoundland and Labrador consumers to avoid the pitfalls of the underground economy.

A new campaign launched by the Eastern Home Builders Association underscores the risks of cheap— and illegal— contractors.

"I guess I was vulnerable at the time but this person seemed so honest," a woman says in a television spot. "So I paid him $40,000 cash under the table, and then he was gone."

The contractors are hoping the education campaign— which follows criminal charges laid last summer following a police investigation— will persuade consumers to stick with legitimate contractors for renovations and construction jobs.

Contractor Greg Hanley said his company, Karwood Contracting, is just one struggling to compete with illegal contractors who don't pay employment insurance, workers' compensation dues and payroll taxes.

"We estimate they have a 45 per cent advantage over us of the labour portion and the [harmonized sales tax]," Hanley told CBC News.

"Oftentimes the items that they install in homes could be stolen materials, so they have a huge advantage on the price they can charge."

Contractor Dennis Galway said government coffers are hurting as much as legitimate businesses. He said it's time to get aggressive with underground contractors.

"You do a disservice to the industry you know if there's a certain level where people can make a living and there's no reason why they couldn't in this industry here.

"The more underground work [there] is, the harder they have to work to match those underground dollars."

Galway said the ads will run for at least another six months.