A Canada Revenue Agency report released last week — apparently all but pried from a cabinet minister’s cold, dead hands — tells us very little that’s new about the underground economy in the food service industry. But it’s quite enlightening as to how the federal government operates in this age of openness and transparency.

In 2010, Canada Revenue Agency did an audit blitz of waiters and waitresses in St. Catharines, Ont. Workers were warned about the consequences of not fully declaring their income from tips, and later, the auditors descended.

What did they find? Nothing much surprising, except for a good reporting of the numbers. Audits found that almost none of the workers declared every penny of tips they earned. Well, duh . . . .

But you may be surprised to know the extent of the tax cheating going on: almost $1,000 per month per person. The total of undeclared income in St. Catharines came to about $1.7 million, and if you extrapolate it across the country, that adds up to an estimated $1.3 billion a year in undeclared income in the food service industry — in 2008 figures supplied by Canada Revenue Agency. That’s out of Canada’s total underground economy thought to be around $36 billion.

What are the taxes owed on $1.3 billion of undeclared tips from the people who serve you restaurant dinners? In relative terms, bloody little. Probably not enough to pay for an audit.

The report says waitresses mostly live on their tips, and that a very large portion of serving staff are students who pay little or no income tax. Again . . . duh. In fact, that paltry $1,000 a month was in many cases as much as double their wages. These people don’t have a tax problem, they have an income problem.

Yet Canada Revenue Agency put wait staff in St. Catharines on the front line of a government war on the underground economy. In 2010. With no intention of ever telling Canadians about it.

The Canadian Press learned of the report, and asked for a copy under the Access to Information Act. They were stonewalled — illegally, it must be added — for 18 months, and even then the copy they received was heavily censored.

That’s why we’re only hearing about this now.

It’s certainly true, unreported income is theft. It’s stealing from all the rest of us who fill out our tax forms honestly every year.

It’s stealing from the federal budget, because the lost revenue is reflected in the interest payments on the federal debt.

All the above is true.

But they decided to go after waiters and waitresses, whose earnings generally raise their profiles to “working poor” status. For lost taxes?

The 145 audits collected an average of $1,533 in extra tax payments. A good number collected no extra taxes at all, not because those returns were so scrupulously honest, but because the income figures were so small.

That’s maybe two jobs for a plumber or electrician — the kind who offer you two bills for a home repair: one on the invoice, or one for much less, paid in cash, no paperwork involved, wink, wink. The waste for the taxpayer in this report is obvious. Government could pass a law requiring restaurants to include service fees in all restaurants — as is done in many countries around the world. Living wages could be mandated for wait staff, so they don’t have to scrape for tips, or go home with no pay at all on days when some cheapskate didn’t tip at all. (Not tipping is also a form of theft.)

You can wait for that day for as long as you can wait for the federal government to embrace perestroika.

Greg Neiman is an Advocate editor.