Lack of tax revenues from illegal suites costs municipalities millions annually. Each illegal suite places a 43% increase in garbage and a 65% increase in water consumption for which the illegal suite owner pays nothing. The honest tax payers foot the bill instead.
To illustrate the industry wide problem we choose Victoria, British Columbia. In Victoria, based on data taken from our 2001 Canadian industry survey, there are about 25,000 illegal rental units in the area. The local cable service provider is losing over $14.8 million annually! For the municipality, a modest tax levy of only $250 a year ($20 a month), could generate new revenue streams totalling $6.3 million dollars annually.
At the current customer value, placing this market segment "on billing" for the cable service provider would increase the net value of their customer base by roughly $82.5 million.
With an average cable billing of $50 a month, and a sales or drop tax of 7%, the taxing authority would increase their annual revenues by $1,050,000
If this major "White Collar Crime" did not exist or the industry were able to curb the high rate of this crime, the gross value of just the Canadian cable industry would increase by $3.8 BILLION!
National Household Estimations for Canada - 1999 |
|||
St. John''''s |
Charlottetown Summerside |
Halifax |
|
Estimated number of households 1 |
59,090 |
21,620 |
133,240 |
Estimated Number of Illegal Suites2 |
11,818 |
4,324 |
22,648 |
Lost Annual Revenues |
$7,090,800 |
$2,594,400 |
$13,588,800 |
Saint |
Quebec |
Montreal |
|
Estimated number of households |
49,900 |
272,670 |
1,340,370 |
Estimated Number of Illegal Suites |
9,980 |
54,534 |
268,074 |
Lost Annual Revenues |
$5,988,000 |
$32,720,400 |
$160,844,400 |
Ottawa (Ontario part) |
Toronto |
Winnipeg |
|
Estimated number of households |
307,020 |
1,604,190 |
242,380 |
Estimated Number of Illegal Suites |
61,404 |
320,838 |
48,476 |
Lost Annual Revenues |
$36,842,400 |
$192,502,800 |
$29,085,600 |
Regina |
Saskatoon |
Calgary |
|
Estimated number of households |
72,610 |
82,550 |
335,460 |
Estimated Number of Illegal Suites |
14,522 |
16,510 |
67,092 |
Lost Annual Revenues |
$8,713,200 |
$9,906,000 |
$40,255,200 |
Edmonton |
Vancouver |
Victoria |
|
Estimated number of households |
328,930 |
719,020 |
123,650 |
Estimated Number of Illegal Suites |
65,786 |
143,804 |
24,730 |
Lost Annual Revenues |
$39,471,600 |
$86,282,4000 |
$14,838,000 |
Whitehorse |
Yellowknife |
||
Estimated number of households |
7,350 |
5,900 |
|
Estimated Number of Illegal Suites |
1,470 |
1,180 |
|
Lost Annual Revenues |
$882,000 |
$708,000 |
|
1 Data Source: Statistics Canada |
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Approx. No. of Canadian Households = 5,705,950 Approx. No. of Illegal Suites = 1,141,190 Estimated Annual Cable Industry Losses = $684,714,000 Annual Loss in uncollected GST = $47,929,980 Loss in Total Canadian Cable Industry Value = $3.8 billion! (based on current customer acquisition costs) |