P.E.I. Finance Minister Wes Sheridan (left) and former Nova Scotia Home Builders Association president Richard Lind discuss the introduction of HST to P.E.I. (Brendan Elliott/CBC)

P.E.I.'s residential construction industry heard concerns Tuesday night that the coming harmonized sales tax could drive a large portion of their industry underground as people try to avoid the tax.

Home renovation and new home construction costs will increase when the HST is introduced in April, some estimate by as much as eight per cent.

"You're going to find a lot of people offering you cash to operate with them in the underground economy to get that work done," Richard Lind, who was president of the Nova Scotia Home Builders Association when HST was adopted by that province, told the approximately two dozen people gathered at the Farm Centre in Charlottetown.

Lind said that was the experience in Nova Scotia when the HST was introduced there in 1997.

Finance Minister Wes Sheridan said the underground economy already exists within the industry, and recognizes there could be an increase in activity with the HST. The tax department will ramp up enforcement once the HST is brought in.

He also said the consequences of using the underground economy can be far more serious than getting caught by the tax man.

About two dozen people attended the HST information session sponsored by the home building industry. (CBC)

"Do you have any idea what would happen if you were putting a roof on your house and you were paying a guy cash and he fell off and was critically injured, or worse?" he said.

"You would never get out from underneath it."

In addition to increased enforcement, Sheridan suggested there has to be an education program for Islanders about the dangers of participating in the underground economy for either a new home or renovations. Industry representatives agreed to work with the government to develop that idea.

Sheridan will be at another public meeting on the HST Wednesday. The second of eight government-sponsored information sessions will be held at West Royalty Elementary starting at 7 p.m.