Too many people in Happy Valley-Goose Bay are operating unregistered businesses out of their homes, says town councillor Bert Pomeroy, who warns it won't be tolerated.

Pomeroy says under-the-radar businesses are a problem in residential neighbourhoods, interfering with legitimate businesses and costing the town revenue.

"It puts those who are registered, providing the same products and services, at a disadvantage, and I think we need to look at that and start really cracking down," Pomeroy told CBC Radio's Labrador Morning.

It costs about $300 a year to register a home-based business. Applications can be filled out online, and the town considers the type of business and whether it meets zoning regulations.

"That way, everybody's operating above board and it's a benefit to the whole community," said Pomeroy.

"In most cases home-based businesses are operating an office and providing a service, and those are normally the ones that are approved. Obviously if you're operating a takeout in a low [density] residential area, it wouldn't be allowed," 

Muskrat Falls contractors a problem

While Pomeroy does not have any numbers, he said social media posts suggest there are more and more people advertising products and services, such as cosmetology, who have not registered with the town.

Issues related to the nearby Muskrat Falls project also show the need to tighten up the rules, he said.

"Contractors ... renting out a house, for example, having four or five vehicles parked in a driveway with a company logo on the vehicles," Pomeroy said.

"Some businesses have office space, they pay a business tax, they pay property tax, but an outside company coming in and renting a house and providing a service from that house are not paying the same tax that a local contractor would pay, and we need to look at how we can fix that."

Pomeroy said the town will review its regulations in the new year, with a view towards cracking down.

"We could issue a stop-work order and issue fines and or go through the court process. We would just hope that people would comply."

With files from Katie Breen