Mr. Speaker, I wish a good evening to all my colleagues as we continue to operate virtually in this very extraordinary period of time. I am thankful for the opportunity to speak during today's report stage debate on Bill C-224, an act to amend An Act to authorize the making of certain fiscal payments to provinces, and to authorize the entry into tax collection agreements with provinces.
As the House is aware, after careful study, the majority of our colleagues on the finance committee have recommended that this legislation not proceed further. To briefly recap, this legislation would authorize the Minister of Finance to enter into agreements with the provincial government. As a result of these agreements, and under Bill C-224, the province would then be able to collect personal and corporate income taxes on behalf of the Government of Canada. Additionally, within 90 days of the legislation coming into force, the Minister of Finance would obliged to undertake discussions with the Government of Quebec in order to enter into an agreement within one year.
During my time today, I would like to review the serious issues raised with this bill during the committee stage that prompted members to make the recommendation not to proceed with Bill C-224. Specifically, I want to mention four important areas of concern. They are the bill's potential impacts on public service employment levels in Quebec, the delivery of benefits to residents of Quebec, the fight against international tax evasion and the significant implementation cost of this proposal.
First, as noted by officials from the Canada Revenue Agency who appeared before the finance committee, Bill C-224 would create tremendous uncertainty surrounding job security for the nearly six thousand CRA employees in Quebec, as well as many other CRA employees outside of Quebec.
A CRA official who appeared before the committee on February 16, 2021, said, “The agency’s workloads are national, meaning that the work of a particular province can be done in several other provinces. Therefore, although the impact on jobs would be most significant in the province which would choose to repatriate tax operations, many jobs across the country could be impacted.”
This is a real concern about job security that was also shared by representatives of various public sector unions who also appeared before the finance committee. For instance, the president of the Professional Institute of the Public Service of Canada stated, “it’s critical that we not lose sight of the impact this could have on employment in Shawinigan and Jonquière, where the Canada Revenue Agency provides good jobs to a great many people. I cannot think of a worse time than the middle of a pandemic to start thinking about cutting jobs in smaller communities.”
The CRA is a government leader in the decentralization of its jobs. They are not at all concentrated in the national capital region, as is often the case with federal jobs. Employees cannot be easily redeployed to other departments. Similarly, the national president of the Union of Taxation Employees echoed this apprehension about the job losses that could result due to the passage of Bill C-224 by informing the finance committee of the following:
...massive job losses will clearly ensue if this bill is passed and the federal government hands over administration of Quebec's federal taxes to the provincial government. The Canada Revenue Agency currently employs approximately 6,000 people in Quebec, and our union represents about 4,000 of them. Revenu Québec has around 12,000 employees. Together, the two agencies therefore have a total workforce of approximately 18,000 people. If we compare that to the CRA's total workforce in Canada outside of Quebec, which is about 39,000 employees, it's easy to see that there would be a surplus of employees in Quebec if the bill is passed.
I would like to point out that the vast majority of jobs that would be lost are held by people living in the province of Quebec. They pay taxes there and greatly contribute to the province's economic activity. Basically, they are Quebeckers from all over Quebec, as the national president of the Union of Taxation Employees pointed out when he said, “Included in these job losses are more than 1,200 employees in the Saguenay—Lac-Saint-Jean region and 1,500 in Mauricie.”
As I have clearly demonstrated, Bill C-224 could represent a serious negative impact on job security for the thousands of public servants in Quebec, which is especially unfortunate because of the ongoing COVID-19 pandemic.
In that regard, I cannot believe that the Bloc Québécois, a party that claims to stand up for the people, could imagine that jeopardizing the livelihood of thousands of Quebeckers in the Quebec City region is a good idea.
As the Bloc Québécois leader said yesterday at a press conference, when you take an interest in the regions, you take a real interest.
The second area of concern I would like to highlight with Bill C-224 is its potential negative impact on the delivery of benefits to residents of Quebec, as explained by the CRA official who appeared before the finance committee. The CRA and the Government of Canada use information obtained by the CRA to administer key federal benefit programs, such as the guaranteed income supplement and the child care benefit. Tax information is needed to administer these programs to ensure individuals get their benefits. This official went on to state that a transfer of administration to a province could impede the administrative effectiveness of these programs, which are crucial for the well-being of Canadians. Without tax information on hand, COVID-19 emergency benefits, which are crucial to the well-being of Canadians, would not have been possible to implement as quickly.
A third point of concern I would like to flag with Bill C-224 is its potential negative impact on Canada's fight against international tax evasion. Part of the CRA's mandate is to ensure the tax compliance of Canadians, both domestically and abroad. For this reason, the Government of Canada has signed many critical international tax treaties and tax information exchange agreements to help ensure the CRA's ability to fight international tax evasion. However, as noted by the CRA official at the finance committee, convincing our partners to make changes to include other subnational tax administrations is not a given.
A representative of the Professional Institute of the Public Service of Canada warned that Bill C-224 could negatively affect Canada's fight to combat international tax evasion, stating that because international agreements aimed at fighting tax evasion are signed between central governments, it would be difficult for Quebec to perform the federal government's work in this area without a great many treaties being redrafted. This could lead to increased tax evasion at a time when billions of dollars are sitting offshore that the government is trying to recoup. This is money that is badly needed to fund the public programs and services Canadians depend on every day.
A fourth and final concern with Bill C-224 is the significant potential implementation cost of the proposal, as there would clearly be cost increases and loss of economies of scale. A CRA official explained to the finance committee that the required integration between both the CRA and Revenu Québec processes and techniques would incur significant additional expenses.
In summary, these four areas represented real, substantive worries for the expert witnesses who appeared before the finance committee and helped inform the recommendation of the majority of the members of the finance committee not to proceed with this bill, a recommendation that I also support.
Before concluding, though, I would like to briefly note the important efforts the Government of Canada, through the CRA, has taken to reduce the administrative burden on Quebec taxpayers. In fact, the CRA has started discussions with the Province of Quebec to simplify or combine some tax forms and to simplify the income tax return process. This is an important and responsible step that I think all members would applaud and support.