living without a Social Insurance Number
August 13, 2009 9:23 AM
Do you live and work without a social insurance number in Canada?
Someone i ran into told me they do not have a social insurance number and get along in life just fine being the owner of a company. It apparently takes some effort to set yourself up like like this, but there are some obvious advantages and disadvantages. Actually they only really spoke of the advantages. I am wondering if anyone here that lives this way, or knows someone who does and can shed any insight into the pros and cons of living this "lifestyle" that are not so obvious?
Someone i ran into told me they do not have a social insurance number and get along in life just fine being the owner of a company. It apparently takes some effort to set yourself up like like this, but there are some obvious advantages and disadvantages. Actually they only really spoke of the advantages. I am wondering if anyone here that lives this way, or knows someone who does and can shed any insight into the pros and cons of living this "lifestyle" that are not so obvious?
Banks usually require this for opening an account, getting a loan, etc. I'm not sure this is legal, but every time I dealt with them, SIN was required. Same for renting an apartment, at least in Montreal (it probably is not legal at all, but then owners pretty much can ask for anything they want when there are more renters than apartments...). Governmental employment insurance (see point 6 here) applications also ask for this. In Quebec, Hydro-Quebec requires SIN for new clients (in this case it is totally legal).
posted by ddaavviidd at 9:42 AM on August 13, 2009
posted by ddaavviidd at 9:42 AM on August 13, 2009
Without a SIN how are they filing taxes? I assume they are getting some income from their business. It is also necessary for benefits like CPP, RRSPs, as well as various tax rebate programmes and Economic development programmes for businesses. I only know one person (with no legal status in Canada) who lived without a SIN. He was paid less, plus he had all the usual deductions off his paycheque without the benefits (CPP, GST rebate). I believe he could not get a business licence without showing proof of his SIN. He also could not get any form of loan because the SIN is used to verify identity and immigration status (the first three digits indicate status and province where the person originally applied for SIN) someone without legal status would find it difficult to not be viewed as a flight risk for a large, unsecured loan.
posted by saucysault at 9:46 AM on August 13, 2009
posted by saucysault at 9:46 AM on August 13, 2009
Isn't your SIN what they tie your income tax to?
Is this person not paying income tax?
I don't see how you can do this really and be on the level.
posted by nerhael at 9:47 AM on August 13, 2009
Is this person not paying income tax?
I don't see how you can do this really and be on the level.
posted by nerhael at 9:47 AM on August 13, 2009
Indeed. You cannot file taxes without a SIN.
posted by dirtynumbangelboy at 9:52 AM on August 13, 2009
posted by dirtynumbangelboy at 9:52 AM on August 13, 2009
Here are some disadvantages:
I work in financial services, and a SIN is needed to report any investment income by the bank - plus while its not officially required for a lot of products and services you will be asked for it anwyay, and your failure to produce it could potentially get you flagged as someone who could be attempting money-laundering or terrorist funding (you'd be suprised at how big that net is). So forget about obtaining hassle-free financial services, because you'll (for sure) trigger some flags and possibly some attention from security agencies.
Your friend is almost certainly a tax-evader, and if he gets caught all the penalties applied by the government will be applied retroactively with interest based on government estimates which may have no grounding in reality. The government is going to be catching a lot of these guys next year - consider that with the home renovation tax credit a lot more people are going to be requesting receipts for things renovations and handyman services which may have been done under the table before.
Aside from that, with no SIN forget about collecting EI, and CPP, Income Tax refunds, and probably GST cheques - things you'll be paying for with your own blood, sweat, and tears and are entitled to but won't receive.
posted by Deep Dish at 10:05 AM on August 13, 2009
I work in financial services, and a SIN is needed to report any investment income by the bank - plus while its not officially required for a lot of products and services you will be asked for it anwyay, and your failure to produce it could potentially get you flagged as someone who could be attempting money-laundering or terrorist funding (you'd be suprised at how big that net is). So forget about obtaining hassle-free financial services, because you'll (for sure) trigger some flags and possibly some attention from security agencies.
Your friend is almost certainly a tax-evader, and if he gets caught all the penalties applied by the government will be applied retroactively with interest based on government estimates which may have no grounding in reality. The government is going to be catching a lot of these guys next year - consider that with the home renovation tax credit a lot more people are going to be requesting receipts for things renovations and handyman services which may have been done under the table before.
Aside from that, with no SIN forget about collecting EI, and CPP, Income Tax refunds, and probably GST cheques - things you'll be paying for with your own blood, sweat, and tears and are entitled to but won't receive.
posted by Deep Dish at 10:05 AM on August 13, 2009
You cannot open an interest-bearing account at a financial institution in Canada with no SIN.
You also need one to get a GST number to operate a business in Canada, even a home business (unless the income - not profits - are less than some amount (last I checked it was $30,000 but that could have changed)).
No public sector organization or reputable private sector company can hire you without a SIN number because doing so would prevent them from accurately filing their own taxes.
You *can* have basic medical coverage without a SIN, however. The only time a provincial health ministry is allowed to collect SIN numbers is if a) they collect premiums and b) they offer a discount on premiums to low-income people. (I.e. when Alberta used to charge premiums and you applied for a discount/waiver, you provided your SIN which allowed them to verify if you were actually low-income.) Alberta used to ask everyone for a SIN, but the provincial Privacy Commissioner slapped their wrist for that.
However, there really isn't very much you can do legally, work or business-wise, without a SIN.
posted by Kurichina at 10:06 AM on August 13, 2009
You also need one to get a GST number to operate a business in Canada, even a home business (unless the income - not profits - are less than some amount (last I checked it was $30,000 but that could have changed)).
No public sector organization or reputable private sector company can hire you without a SIN number because doing so would prevent them from accurately filing their own taxes.
You *can* have basic medical coverage without a SIN, however. The only time a provincial health ministry is allowed to collect SIN numbers is if a) they collect premiums and b) they offer a discount on premiums to low-income people. (I.e. when Alberta used to charge premiums and you applied for a discount/waiver, you provided your SIN which allowed them to verify if you were actually low-income.) Alberta used to ask everyone for a SIN, but the provincial Privacy Commissioner slapped their wrist for that.
However, there really isn't very much you can do legally, work or business-wise, without a SIN.
posted by Kurichina at 10:06 AM on August 13, 2009
Deep Dish and I posted at the same time. Yes, I'm surprised at how many home reno contractors want me to pay in cash, even with HRTC going on! Don't they know I'm saving the invoices and reciepts to get my 15% back?
posted by Kurichina at 10:08 AM on August 13, 2009
posted by Kurichina at 10:08 AM on August 13, 2009
Actually they only really spoke of the advantages.
Like not paying taxes? I honestly don't see how this is possible. I would honestly be curious to know how one could get through life without one. I had to have one for my first job when I was fourteen - to babysit!
posted by futureisunwritten at 10:42 AM on August 13, 2009
Like not paying taxes? I honestly don't see how this is possible. I would honestly be curious to know how one could get through life without one. I had to have one for my first job when I was fourteen - to babysit!
posted by futureisunwritten at 10:42 AM on August 13, 2009
My kids had SIN numbers from when they were born so I could open a RESP for them. Even if it was possible, there are definite disadvantages as you can't get all sorts of government money without a SIN.
posted by GuyZero at 10:52 AM on August 13, 2009
posted by GuyZero at 10:52 AM on August 13, 2009
Someone i ran into told me they do not have a social insurance number and get along in life just fine being the owner of a company.
It's impossible to register a legal business with the Registrar of Companies in BC without a SIN number. Without a Certificate of Incorporation and/or, a business number you can't qualify to remit taxes on either the provincial or, federal level and, you can't file corporate taxes.
unless the income - not profits - are less than some amount
I can't remember what the threshold is for the automatic requirement to collect GST but below it, its voluntary. It really it makes sense to enroll though, even if you are under, because some of the taxes you pay can be recouped rather than lost.
posted by squeak at 11:10 AM on August 13, 2009
It's impossible to register a legal business with the Registrar of Companies in BC without a SIN number. Without a Certificate of Incorporation and/or, a business number you can't qualify to remit taxes on either the provincial or, federal level and, you can't file corporate taxes.
unless the income - not profits - are less than some amount
I can't remember what the threshold is for the automatic requirement to collect GST but below it, its voluntary. It really it makes sense to enroll though, even if you are under, because some of the taxes you pay can be recouped rather than lost.
posted by squeak at 11:10 AM on August 13, 2009
You cannot open an interest-bearing account at a financial institution in Canada with no SIN.
This is incorrect, you absolutely can open an interest-bearing savings account without a SIN card. For example, children often don't have SIN numbers and open interest bearing savings accounts.
posted by smitt at 11:11 AM on August 13, 2009
This is incorrect, you absolutely can open an interest-bearing savings account without a SIN card. For example, children often don't have SIN numbers and open interest bearing savings accounts.
posted by smitt at 11:11 AM on August 13, 2009
(I should elaborate, I'm just looking into this. While it is mandatory that we ask for a Social Insurance Number to open an interest bearing account, if it is not provided it does not prevent us from opening the account, unless it is a registered product.)
posted by smitt at 11:16 AM on August 13, 2009
posted by smitt at 11:16 AM on August 13, 2009
I don't see how your friend could expect to get any old age pension.
posted by bonobothegreat at 11:56 AM on August 13, 2009
posted by bonobothegreat at 11:56 AM on August 13, 2009
Honestly I think a lot of folks equate not having a SIN Card with not having a number. Is it possible that that is what this person is talking about? I haven't had a SIN Card since my 19th birthday but I know the number by heart and that is more than sufficient for everyone.
posted by mikel at 12:31 PM on August 13, 2009
posted by mikel at 12:31 PM on August 13, 2009
You cannot operate a legitimate business in Canada, or a business of any consequence (including contracting) without a SIN number.
The best you could do would be to sell stuff on the street.
posted by KokuRyu at 1:45 PM on August 13, 2009
The best you could do would be to sell stuff on the street.
posted by KokuRyu at 1:45 PM on August 13, 2009
Smitt, CRA regulations require a SIN number for any interest-bearing account, and while they do not prevent opening the account, it's much greater risk and there are limits to the income that can be generated from the account. The FI I used to work for would not open one without a SIN (Generation accounts (for under-18s only) had seperate provisions, but would generally be supported by a parent or guardian's KYC and SIN information). I'm surprised other FIs would be less stringent, but then the one I used to be with had "medium-risk" strategies in most areas. Perhaps your employer enjoys a higher risk tolerance.
posted by Kurichina at 1:58 PM on August 13, 2009
posted by Kurichina at 1:58 PM on August 13, 2009
This thread is closed to new comments.
I've also known Canadian born friends who have worked "under the table" for cash, but they've always had a SIN number. I don't think you can really get by without one. If you don't have a SIN number you probably don't have any medical coverage etc. Most employers will not hire you without having a SIN number. You'd probably end up working only unskilled labour jobs, which is fine if that's what you want to do for work.
posted by hector horace at 9:33 AM on August 13, 2009