I'm also not the tax police, it's not my job to ensure that the trades I hire are paying the correct amount to the CRA. All the payments go on my tax return because I offset them against profits, so if the CRA wants to hunt them down they can.
What's what in this situation depends on whether you are actually expressly agreeing with them that you will pay them cash so they will charge you less because they can avoid paying tax; or whether you are just paying them cash.
One slightly tangential thing about cash is that, if it gets stolen, it's gone. But if your debit card gets nicked, you get your money back. (If it's a credit card, the bank gets their money back)
Given the actual costs of processing, cash shouldn't be any cheaper than digital (except for the evasion/avoidance thing). But banks, no matter how profitable, do like to make sure people pay for everydamnthing.