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The underground economy overshadows the official economy

February 1, 2016
François Dupuis, Vice-President and Chief Economist • Joëlle Noreau, Senior Economist

Looking into the underground economy is like trying to harness a moving target. And yet this phenomenon—and its impact on the official economy—is very real. Despite the fact that Quebecers want every citizen to contribute their fair share to the state’s coffers, they still toy with the underground economy. While efforts are made to recover unreported amounts, what percentage of estimated tax losses can we really recover? Can the new technologies, with all their transaction-tracking capabilities, help rein in the underground economy? This remains to be seen, but there is one certainty: the work is complex and states around the world are not giving up. In the meantime, as far as economists are concerned, much needs to be done to accurately estimate the extent of this phenomenon and its manifestations.

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