Bill C-224 (Historical)

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

This enactment amends An Act to authorize the making of certain fiscal payments to provinces, and to authorize the entry into tax collection agreements with provinces to provide that the Minister of Finance may enter into an agreement with the government of a province under which the government of the province will collect the federal personal and corporation income taxes on behalf of the Government of Canada. It also requires that the Minister of Finance undertake discussions with the Government of Quebec in order to enter into such an agreement.

Federal-Provincial Fiscal Arrangements Act

[Alain Therrien, Bloc, La Prairie, QC]

Mr. Speaker, when the Constitution was created in 1867, fiscal responsibilities were assigned to each government. Oddly enough, the provinces and Quebec got income tax. One might reasonably think that the Fathers of Confederation were good to Quebec and the other provinces, but no, because income tax did not exist at the time. Neither the provinces nor the federal government collected income tax. That was given to the provinces and they were told to figure it out. The first province to start working on that was British Columbia. It started taxing income, and that worked.

When the First World War broke out, the federal government decided it was time it took charge of that, because it was working. The provinces argued that it was written in the Constitution that it was a provincial and Quebec jurisdiction. It is also written in the Constitution that the federal government can take public money, regardless of how it is taxed. It was written at the bottom of one page, so the government decided to use it.

The First World War ended, the provinces asked that that responsibility be returned to them and they were told “no”. The Second World War arrived. The government said that it would finance the war effort with taxes. After that, we had the difficult coexistence of the provincial and Quebec governments and the federal government, which did not want to give up this responsibility. The provinces and Quebec found the idea to be appealing. The coexistence led to agreements being signed with all provinces except Quebec and Ontario. Then Ontario gave in and Quebec was the only province to stand its ground and say that it would retain control over this money.

In 1953, Maurice Duplessis launched the Tremblay Commission. He said that he would look at the issue and see what came of it. The Tremblay Commission submitted its report in 1956. It found that having the province retain control of taxes was such a good idea that Quebec established and retained control of Quebec income taxes. It was a victory for Quebec. The other provinces were quite disappointed that they did not do the same thing. Quebeckers were rather wily and it served them well.

There are currently two tax returns and two tax systems. People started to question why there was not a single tax collector even if there were two tax systems. We all realized that that was not a crazy idea. We knew that there would be a battle between the Government of Quebec and the Government of Canada. We wondered who would be the one tax collector, if there was one. Quebeckers had the answer.

On May 15, 2018, a motion was tabled in the Quebec National Assembly. I know, because I was the one who tabled it. I am the poor guy who tabled it. At the time, there was a Liberal government facing me. No one would call Philippe Couillard a modern-day patriot. I was sure that his government would buckle and refuse to support us. However, I could see it in his eyes that Carlos Leitão was on board. They said yes. It passed unanimously in the Quebec National Assembly. We then did a survey, and 65% of Quebeckers said that Quebec should collect the taxes, while 22% said that that responsibility should fall to Canada.

We are listening to the majority of Quebeckers who are saying that Quebec should be the one collecting taxes. We know that started with the GST and the QST and it worked. It was great. The federal government did not really talk about collecting GST in Quebec. It wants nothing to do with it. Quebec does a great job of that. It is more efficient than the federal government.

When it comes to economies of scale, my colleague from Orléans is off the mark. It has been proven that the QST is more effective when it is collected with the GST, regardless of what my colleague said.

Why have a single income tax return? My colleague from Rosemont—La Petite-Patrie was saying that we no longer have to use papyrus, quills and ink to fill out our tax return. That is obvious.

Were he more curious, he would know that there is in fact a literature review. Economists such as François Vaillancourt did thorough research to find out how much more time it took to fill out two tax returns. Mr. Vaillancourt conducted studies. It is not complicated. It is 10% more work for individuals and 15% more work for businesses. That is all in the report by IRAI, the Research Institute on Self-Determination of Peoples and National Independence, which, last year, conducted the only empirical study on the benefits of filling in a single tax return. It is worth reading. It points to savings of $39 million for individuals who have someone else fill out their tax forms. Those who fill out their own spend 10% less time.

For businesses, this will reduce their costs by 15%, or $99 million.

Let's now talk about duplication. There are people in Quebec City and Ottawa who do the same thing, which is perfectly normal because that is how it is done. Now, someone in Ottawa is tapped on the shoulder and told to stop because there is already a guy in Quebec City doing that job. This will save $287 million. Everyone should read the IRAI report, which is comprehensive, explicit and scientific and explains it all. A single tax return will result in $425 million in savings.

We have heard that if this responsibility is handed over to Quebec City, other countries that have signed tax collection agreements with Ottawa will say they do not want to do business with Quebec. Come on. Those countries sign agreements with the federal government in order to obtain tax information that will help them combat tax evasion. The United States will not turn around and say it wants nothing to do with the Quebec government, because it will not want to have a tax haven just north of the border. It will seek to share that information, which I applaud, and all of those agreements will be confirmed in that manner, one after the other. That will not be a problem.

The Minister of National Revenue said that the Canada Revenue Agency employs 5,300 people in Quebec to handle tax returns. In order to collect and manage the federal government's taxes, Quebec will need 2,332 new employees. This is not rocket science, and it does not take an honorary degree to understand that compared with the 5,300 federal employees, 2,332 will be needed to do roughly the same work, but on behalf of the Government of Quebec.

What about the remaining 2,000 or 3,000 jobs? Canada's public service is aging and losing 3% to 4% of its employees every year through attrition as people retire. This public service claims to have a shortage of workers. I assume the remaining CRA workers will find jobs elsewhere in the public service.

Let us talk about tax evasion. Obviously, analyzing tax evasion by major corporations is not a simple task. It almost needs to be done by tax experts. However, there are many different types of tax evasion and jobs that can be done in this area. Furthermore, this work pays for itself. In fact, the best investment that the government can make is to assign an employee to combatting tax evasion. This employee will bring in much more money than the government spends on their salary. Once again, it does not take an honorary degree to understand this.

The member for Orléans said that tax administration would be less consistent across Canada and that that would be terrible. Well, we do not want that anyway. We are a nation separate from the Canadian nation, and we do not want to be consistent. Our needs, our language, our culture and our economy are all different. We do not want to be consistent with all of the Canadian provinces. That is not our goal. I would tell the member for Orléans that there is no point forcing us to be consistent, because that will not work for us. We do not want to be consistent. That is not hard to understand.

The federal government's next argument is that it will not have the information it needs and that it will not be able to operate without this information. However, Revenu Québec collects much more information than the Canada Revenue Agency. Quebec has more programs, not because it is better, but because it is different and therefore needs more information. Furthermore, Revenu Québec records are used to calculate child support, so if the information had to go to Ottawa, there would be no more child support.

It is not hard to tell the federal government that we will give it all the information we have, and we have more than it has, so it can continue to work the way it wants. It is win-win.

If having one entity collect taxes on behalf of two tax systems can save $425 million, imagine if we had just one tax system. If that were the case, the savings would not be in the millions of dollars, it would be in the billions. However, for that to happen, we would have to achieve independence.

[The Deputy Speaker, Bruce Stanton]

The time provided for the consideration of Private Members' Business has now expired, and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from October 28, 2020 consideration of the motion that 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, be read the second time and referred to a committee.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, it is a pleasure for me to provide some thoughts with regard to an important issue that goes beyond federal tax return forms and filing those forms. It has a lot to do with our national identity and the types of services we provide as a country, as well as how we best finance those programs. It also has to do with the important role the Canada Revenue Agency plays in our society.

That really has been amplified this year with the pandemic. Outstanding work has been demonstrated by our professional civil servants through the Canada Revenue Agency. I want to take a moment to recognize the valuable contributions they have made during this very difficult time.

I was looking at what I might want to say on this legislation. I often forgo notes and instead speak on a few points. I want to reference a note I received. In the COVID-19 pandemic, CRA, as an essential support to millions of Canadians, came to the plate. It delivered the Canada emergency response benefit, CERB, which we all know came from nowhere. This fantastic program was created and CRA was an essential support for Canadians with respect to it. That benefit reached somewhere in the neighbourhood of 8.8 million people, including approximately two million in the province of Quebec. Imagine how much more difficult it would have been if we did not have the CRA performing as it did during the pandemic.

The Canadian emergency wage subsidy program reached 3.5 million Canadians. In the province of Quebec, we are talking about 860,000 Quebeckers. We can describe the efforts supporting students and young people, again through the CRA. The emergency student benefit reached 708,000 Canadians, about 140,000 of whom were from the province of Quebec.

One could take a snapshot of 2020 and recognize the value of the Canada Revenue Agency. We understand the role it plays in getting the necessary revenues, and how diligent it is in collecting taxes. In fact, we have been using the CRA to look at ways to go after individuals who try to avoid paying taxes. This government has invested close to a billion dollars over two federal budgets to go after individuals who were not paying their fair share or were trying to avoid paying their fair share of taxes.

CRA employs thousands of Canadians, many of whom call Quebec their home province. CRA plays a very important role in the city of Winnipeg. I would like to think we would continue to support the Canada Revenue Agency, because it is absolutely fundamental to have. Without it, we would not be able to generate the revenues required to provide the many spending programs we do.

Many members of the Bloc are saying that Quebec has a tax-collecting system and the Government of Canada has a tax-collecting system. They are arguing that the federal government could forfeit its responsibility of collecting taxes in the Province of Quebec in favour of Quebec collecting it all and then handing over a portion to the federal government.

In previous debates in the House, I have talked about my heritage. My ancestors trace directly to the province of Quebec. I believe it is in Canada's best interests, by which I mean all regions of our country, to have a single collection agency. The best government to accomplish that is the national government.

Can members imagine if we had taxation collection from all the provinces and territories? That would be chaotic. The national government continues to be in the best position to ensure that we have a standard that is applicable across the country. We can still respect the interests of each region, province and territory. We have a certain level of expertise and we have responsibility. Over the years, I believe the national government, through the CRA, has done an outstanding job for Canadians in all regions.

I wonder why the Conservatives, at times, seem to be very sympathetic to this particular piece of legislation. I am disappointed by that. Hopefully, I will be surprised and I will see the Conservatives vote against it.

Earlier today, I was asking members of the Bloc questions about health care, believing that it is important to recognize provincial jurisdiction issues but emphasizing that there is still a role for the national government to play in it. I can articulate why we recognize that as a fact.

I have not heard from Bloc members why they believe the CRA should give up that responsibility for a provincial jurisdiction, whether it is Quebec today, or another province or territory in the future. It seems to me the Bloc does this for reasons that are not in the nation's best interests.

The Conservative Party, on the other hand, claims to want to be a strong national party. However, it seems prepared to decentralize certain responsibilities the Government of Canada not only should have, but is doing in a manner that serves Canadians to the optimum benefit. All one needs to do is to reflect on the past year, as I have pointed out, and how well CRA has served Canadians. It is not just an agency that collects. It is a fundamental part of the way in which we operate as—

[Louise Charbonneau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I rise on a point of order. The interpretation is not working.

[The Deputy Speaker, Bruce Stanton]

I thank the hon. member and would ask the hon. parliamentary secretary to wait a moment.

I wonder if we could just check the interpretation. Thank you.

I will just ask the hon. parliamentary secretary to wrap up with his last few thoughts. There is only about 20 seconds in his time. Then we will go on to the next speaker.

The hon. parliamentary secretary.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I have one final thought just to emphasize the incredible efforts we have seen by the CRA in 2020 and to amplify how important it is to our nation.

My thanks to CRA employees for everything they have done in serving Canadians from all regions of our country for these past 12 months. I look forward to that ongoing professionalism in the year ahead.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, I am pleased to rise virtually in the House today to talk about an issue that is so important to many of my friends in Quebec.

It is absolutely my pleasure to rise today 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.

Before I get into the substance of my remarks, I would like to address the very learned comments of the previous speaker. When we talk about Canada and the great country that we are, yes, Canadians believe in a strong Canada. There is no doubt about that. However, that does not mean that we do not also believe in provinces having a certain amount of autonomy and freedom to do the great things they do.

I would be remiss if I did not address the provincial governments and the provincial workers who are also doing a fantastic job. I would particularly point out our front-line workers, many of whom work for our provinces and who are doing a fabulous job, including our nurses and doctors, keeping our country safe.

I would like to directly address the member's comments and say that Conservatives will always stand for a strong Canada, but we also believe in respecting provincial jurisdiction and provinces' right to a certain amount of autonomy.

Getting to the substance of my remarks, as the shadow cabinet minister for national revenue and having been a previous practitioner in the area of taxation, I know tax season is an extremely stressful and confusing time for many Canadians across this great land of ours. I can confirm that in my practice, and also in my role as the shadow cabinet minister for national revenue, I can say that Canadians have learned the hard way, unfortunately, many times, that the income tax system is far too complicated. If anyone doubts me, they should go online, or better yet, pick up a copy of the Income Tax Code. They will see that it is about yay thick or so. Average Canadians should try to open it up and read it. I defy average parliamentarians to try to grab that Income Tax Act and even understand the first 20 pages in it. It is incomprehensible. It goes from subcomponent to the subcomponent to the subcommittee of this to the subpoint of this, and ongoing. It is a difficult book.

Anyone who knows me knows that I have long since been an advocate of simplifying the tax code. We need to flatten it. We need to make it fairer and more compassionate for Canadians across this great land of ours.

One area in particular that I would call out would be the fact that in order to understand and comply with the income tax rules, people have to understand the various rules and exemptions, and exemptions to the exemptions, and exemptions to exemptions. It is incredibly difficult. I cannot say in strong enough terms that the Income Tax Code is burdensome to Canadians. It is in fact a competitive disadvantage to Canadians, to Canadian businesses and, perhaps most regrettably, to charitable organizations. We need a Canadian Income Tax Code that is better, flatter and fairer to Canadians.

COVID-19 has been a trying time for our country. I would like to agree with the previous member that the CRA has done many great things. I know for a fact that many of our public service workers literally worked around the clock to make sure that the CERB and other benefits came out. Even as the government dawdled, the public service was there to push out those important cheques that people relied on.

I have to say that I have a real concern that with the CERB originally, there was some miscommunication. It went back and forth about whether the CERB was taxable or not. The government has come out and clearly said that in fact the CERB is taxable. I have to tell all Canadians right now that there were no source deductions taken.

Some Canadians might not be aware that when they get a paycheque, the government takes a deposit against their future taxes, and that is called a “source deduction”, which is why, at the end of the year, they do not owe $2,000, $5,000, $10,000 or $100,000 in taxes. The government matches the deposit they pay versus what they actually owe. For many Canadians, it means they get money back in the form of a tax refund. Unfortunately, with respect to the CERB, the government did not take that source deduction, which means that Canadians will owe tax on it. They will effectively have to pay a portion of that CERB back.

I am surprised and, quite frankly, disappointed that the government has not gone out and told people about this. As people get ready to file their taxes, and tax season will soon upon us, I want to make sure that Canadians are aware of that. It is of critical importance, because it is estimated that throughout this pandemic 47% of the labour force turned to the CERB during the pandemic, which is one in four Canadians. Those Canadians who had additional income outside the CERB could very well owe additional money to the Canada Revenue Agency. We want to make sure that point gets out there.

I also want to mention that there are a couple of things going on right now with respect to the CRA and its audits. As I said, the public service has worked hard to get benefits like CERB out to Canadians, and I am appreciative of that. Nonetheless, I would call upon them to exercise restraint with respect to audits, as we called for in our motion when the CRA attempted to audit small business owners on the wage subsidy during the middle of the second wave of the pandemic, which was particularly acute in some provinces, such as Ontario and Quebec. Please, let us allow our Canadian business owners and Canadians to get back to work without the fear of an audit coming to them.

Getting back to the substance of the issue, the challenges caused by the Income Tax Act are particularly acute in Quebec. In fact, Quebec is currently the only province in Canada where residents are required to submit both a federal and a provincial tax return. On top of dealing with the pandemic and, of course, the devastating impact it has had on the provincial economy, the residents of Quebec also must file their income taxes not once but twice.

Members who have filed an income tax return, and I am sure all have, would know that it is a painful experience. I cannot imagine having to do that twice in one year. People in Quebec have rightly, to my mind, expressed a desire to simplify their tax filing experience and file a single tax return. In fact, the Assemblée nationale du Québec adopted a unanimous motion calling upon the federal government to allow Quebec to administer a single tax return.

Some critics may present a straw man argument that if Quebec collects its income tax, it may not remit it to the federal government. Aside from the obvious insult to the Government of Quebec, this is a disappointing argument. Quebec has been a faithful member of our great confederation and has been remitting money to the Canadian government year after year for decades, including, notably, the HST, and not once, to my recollection, has it missed a payment. I believe in the Province of Quebec, I believe in the civil service of Quebec, and I believe them to be more than capable of administering this.

My colleague, the hon. member for Joliette, has proposed Bill C-224, which would authorize provincial governments to collect federal income tax on behalf of the federal government, effectively simplifying the tax-filing experience for residents of Quebec, but we do have some questions with respect to how the bill would be implemented. For example, we want to make sure that CRA employees are protected and that there would never be any job losses as a result of this legislation. We want to make sure that the Province of Quebec will do as great a job as the CRA will do in administering and collecting these taxes. We are more than happy to discuss this at committee. I look forward to a productive discussion with expert testimony.

As the shadow cabinet minister of national revenue, I am very happy to support Bill C-224.

We will always stand up for Quebec and the rights of Quebeckers.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Speaker, I am pleased to rise today to speak to Bill C-224. I want to start by talking about the NDP's past involvement with this bill, which would authorize agreements with the provinces to collect income taxes.

This bill is at second reading. As members know, it will theoretically be sent to a committee, which will hear testimony and propose amendments. The bill will then return to the House at report stage and third reading. The bill still has to go through several steps. It is not complete, but I will come back to that.

The bill seeks to authorize the federal government to enter into agreements with Quebec and the provinces for the purpose of tax collection. We will vote in favour of this at second reading. We support this today just as we have supported it in the past. The NDP has always advocated for things or steps that improve our Confederation, which is why the NDP was the first political party to advocate for an official languages act, at a time when English was virtually the only official language in the country, with a few exceptions.

Second, the NDP was the first party to support the democratic principle of Quebec's right to self-determination.

The rights of official language minority communities, especially those of Canada's francophone communities, have increased significantly in every province where the NDP has been in power, be it my province, British Columbia, Saskatchewan, Manitoba or Ontario.

The Sherbrooke declaration was brought forward by our former leader Jack Layton. We have always advocated for Quebec's ability to decide, with compensation, how it wants to manage certain programs that the federal government wanted to implement.

The NDP, the former member for Sherbrooke, Pierre-Luc Dusseault, and other members were the first to propose that Quebeckers should fill out one tax return instead of two.

I lived in many parts of Quebec for years, including Saguenay–Lac-Saint-Jean, the Eastern Townships, Montreal and the Outaouais, so I know that filling out two tax returns really complicates things. At one point, I even had to take classes in Sherbrooke to understand all the intricacies of two tax returns. I asked lots of questions, so I finally figured it out. The time it takes people to understand these complexities could be better spent in the community, at work or with family.

The principle is important, and we support it. Now we need to concentrate on the repercussions. I feel the bill is lacking in that regard. I really hope we can talk about that in committee so we can improve the bill.

When talking about this bill, no one wants to talk about the employees who will be affected once it comes into effect. We are talking about 4,700 jobs in Quebec, primarily in the Saguenay—Lac-Saint-Jean region, which I know well, and the Mauricie region. The jobs of these loyal and very talented public servants seem uncertain at this point.

Other parties have also introduced similar bills in the House of Commons in the past. Pierre-Luc Dusseault, the former NDP member for Sherbrooke and former national revenue critic, proposed some amendments. Those amendments, which were rejected, were intended specifically to protect those jobs. It is not as though there is a shortage of work.

The Parliamentary Budget Officer tells us that we are losing $25 billion a year to offshore tax havens. Wealthy and affluent Canadians, as well as large corporations that make huge profits, regularly use these tax havens to avoid paying taxes in Canada. This is not fair to Canadians, especially since we do not have the resources to create programs and services that could really help ordinary Canadian families.

We could do great things with that $25 billion a year. Like the current Liberal government, the former Conservative governments did not do anything at all to put an end to all that special treatment, which means that a lot of our collective resources are slipping through our fingers, despite the efforts Canadians are making by paying their taxes.

That brings me to the improvement of the health care systems and the implementation of standards in long-term care facilities to support safe living for every senior. We are seeing the impact of the pandemic and the lack of resources and investments that could improve our health care systems and accomplish many other things. When we think of it that way, we can no longer afford to lose $25 billion a year. These 5,000 public servants who are currently working for the Canada Revenue Agency could be tasked with closing all the existing tax loopholes.

These employees contribute to their region's growth. We are talking about a total payroll of $150 million in Mauricie. I am very familiar with the region as I have been there many times. I am also familiar with the Saguenay—Lac-Saint-Jean area because I lived there for several years. That is where I learned to speak French. There is no nicer accent than the Saguenay—Lac-Saint-Jean accent. We are also talking about a total payroll of approximately $150 million in that area. We cannot ignore the economic impact that the loss of those jobs could have on the Saguenay—Lac-Saint-Jean and Mauricie regions.

As we examine this bill, we also have a responsibility to assess the impact it would have on employment and the payroll throughout Quebec and the regions. We agree that a committee should examine this important bill, but we also need to ensure that we talk to the public servants who are affected by this bill. We need to implement a strategy to ensure that no jobs will be lost and that the tax loopholes that are costing Canada a lot of money will be closed.

[Stéphane Bergeron, Bloc, Montarville, QC]

Mr. Speaker, I can tell by his applause that my colleague from Joliette is enthusiastic, which stands to reason because he is the author of the excellent Bill C-224.

I heard my NDP colleague say some things are missing from the bill, so I am counting on all my colleagues to collaborate in an effort to improve this bill and make sure it covers everything it needs to. I would not want to run into any trumped-up arguments along the way about how some little thing is missing here or there to justify opposition to the bill. If the purpose is worthy, we need to find solutions.

I think there are solutions to each of the objections raised so far. I will come back to that in a bit. Before I begin, Mr. Speaker, if I may, I would like to start my little timer to make sure I keep to my limit.

Anyway, I would once again like to salute, thank and congratulate our colleague from Joliette, who introduced the bill before us today.

This is an issue that keeps coming up in Quebec, and the Quebec National Assembly has now come to a consensus about it. This is something that the Government of Quebec is now calling for. In that regard, we know that the Premier of Quebec and the Prime Minister have had the opportunity to discuss this issue.

However, the federal government always seems to drag its feet. We are therefore going to talk about it and ask why the federal government is so reluctant, especially given the fact that this is not, constitutionally speaking, one of its responsibilities, as we will also see. The federal government took over this responsibility in 1916-17, given the circumstances at the time, which is understandable. However, the government conveniently forgot to relinquish that responsibility later, so now it is still overseeing a jurisdiction that is not its own and has been doing so for just over 100 years.

Quebeckers agree that there should be a single tax return. Why? Because that will result in significant savings not only for the government but also for businesses and taxpayers as individuals. We are talking about an annual cost of over $400 million. That is what two tax returns cost. A single tax return would save a lot of money and would also be more efficient. I will give some examples in a just a moment.

I listened to my colleague from the NDP talk about tax evasion and tax avoidance. The current system of having two entities that do not share information does not help with the fight against tax evasion and tax avoidance. To answer this argument, I would say that, on the contrary, the proposal made by our colleague from Joliette would have a clear benefit and would be very appropriate for achieving this objective being pursued by our colleagues in the NDP, among others. Lastly, we would avoid confusion in data transcription from having to do everything twice, which can cause problems in that area as well.

Here is a question I am sure I will be asked: If having a single tax return is a good idea, why not have the Government of Canada administer it, as it does for the other provinces? My answer is that this overlooks the fact that Quebec is a nation. I am not just saying that to insist on our status. The fact that Quebec is a nation has even been recognized by the House.

Quebec, as a nation, should have a certain degree of fiscal autonomy so it can implement programs and policies that reflect its aspirations, needs, special status and distinct character.

As I mentioned a few moments ago, this would also overlook the fact that this power falls to Quebec and the provinces.

Fundamentally, under the Canadian Constitution, this power falls under Quebec's jurisdiction. Why did the federal government stick its nose in once again? During the First World War, the federal government asked if it could collect income taxes to help pay for the war effort. The provinces saw no problem with that. A century later, the federal government is still collecting income taxes.

When Maurice Duplessis created an income tax in Quebec, he did not do it just to show up the federal government because he thought we were distinct. He simply wanted to exercise Quebec's constitutional jurisdiction over taxes.

For some time now I have been hearing members, including my NDP colleague who spoke before me, put forward the legitimate argument of keeping jobs in Mauricie and Saguenay—Lac-Saint-Jean. It is an argument worth considering, since families rely on those jobs. However, it is a fallacious argument because where there is a will on both sides, there is a way.

The best evidence of that is when the Government of Quebec took back control of labour, which the federal government had controlled until then. The two governments sat down and negotiated in good faith. It all went smoothly, with no job losses, and I believe the same can be done in this case.

The argument is that the federal government collects the taxes for all the provinces. That is fine, if the other provinces are willing to accept this intrusion into their jurisdictions. I would like to point out, however, that in Quebec, it is the Quebec government that collects the GST for the federal government. How is that possible? The two governments negotiated and arrived at a more efficient and economical solution. That is a good example.

The Government of Quebec has proven that it can do a good job for the federal government. If it can be done for the GST, why not for income tax? I therefore do not think that last argument holds water. When the Quebec government began collecting the GST, no jobs were lost. As long as there is goodwill on both sides, I am confident that we can come up with solutions.

I do not mean to be disingenuous, but the Canada Revenue Agency has had some fairly bad press lately. I have heard some negative comments about Revenu Québec, but I should point out that Revenu Québec has not been in the news for unfavourable reasons in recent years. I will leave it at that, because I do not want anyone to claim I am being disingenuous.

I heard my colleague mention the discussions on the resolution the NDP adopted in Sherbrooke, as well as the political and constitutional future of Quebec and Canada. However, that is not what we are talking about here. This falls under the jurisdiction of Quebec and the provinces in accordance with the Canadian Constitution. This is not about separatism or federalism. It is about respect for the Constitution, which is so important to our federalist colleagues.

When the Constitution works for them, they bring it up often. However, when the Constitution does not work in their favour, for example with respect to the provinces' exclusive jurisdiction over health, they ignore it and do not mention it much. It is out of respect for that Constitution that my colleague from Joliette has asked for Quebec to be allowed to collect income taxes for its government and for the federal government, as it already does with the GST.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, we acknowledge at the outset of this debate that the intent of the proposed legislation is appealing. It is only when we look at what it would mean in practice that its problems become apparent. These problems are significant: higher costs for taxpayers; inconsistent administration across jurisdictions; less capacity to move quickly, efficiently and effectively to support Canadians through emergencies like COVID-19; the need to renegotiate existing international tax treaties and agreements; employment disruptions; and job losses.

These adverse impacts may not have been taken into consideration when Quebec's National Assembly passed its motion back in May of 2018 calling on the federal government to allow the Province of Quebec to administer a single tax return. They also may not have been taken into account when Bill C-224 was drafted. However, it is our duty and obligation as representatives of Canadians to take them into account now. Canadians rightfully expect their governments to administer taxes and deliver programs in a fair, efficient and cost-effective manner. It is in this regard that Bill C-224 falls well short of this intent.

Let us take a moment to revisit these shortcomings. First and foremost, Bill C-224 would likely entail higher overall costs for Canadian taxpayers. That is because the Government of Canada collects and administers not only federal income taxes, but also income taxes of all the provinces and territories, except for corporate income tax in Alberta and personal and corporate income taxes in Quebec. This results in savings for taxpayers because a single tax administrator at the national level creates efficiencies and economies of scale that lower overall taxpayer administration costs. If a province were to assume responsibility for the collection and administration of federal income taxes, these efficiencies would be reduced, increasing costs to taxpayers.

Moving in the opposite direction and creating an additional layer of tax administration, as proposed in Bill C-224, would have the opposite effect. It would create inefficiencies, decrease economies of scale and increase overall per-taxpayer administration costs. It is an unavoidable fact that the cost of tax administration is driven by fixed investments in the technology and office space needed to administer taxes, and the administration of federal income tax by the Province of Quebec would not help lower these fixed costs in the province. Rather, these fixed costs would have to be incurred instead by both CRA and Revenu Québec.

Canadians would be right to ask who would pay for the increased costs that could arise from such duplication in investment and administration, and the Premier of Quebec has at least been forthright in providing the answer for them: the Government of Canada. The Premier of Quebec has made it clear that his government would seek reimbursement for costs associated with the administration of federal income taxes. Canadians may be curious about how much this will cost them, but in this respect, we have seen no proposed cost implications. Determining what the additional costs would be depends on the scope and scale of the tax programs transferred to Quebec and the outcome of the negotiations between governments.

However, based on experience of when the administration of sales tax was transferred from the Ontario government to the federal government following the harmonization of the GST and PST, and given the much greater scale of this change, it would be expected that the transition costs alone would be at least $800 million, and likely more than this. This does not include increased costs from the loss of economies of scale for CRA or the costs associated with the renegotiation of our international agreements, even if our international partners were willing to entertain such negotiations.

What we do know for sure is that Bill C-224, by effectively creating a separate tax administrator for federal taxes in Quebec, would reduce the consistency of tax administration nationally. Doing so would impair CRA's administrative capacity, and therefore the federal government's ability, to deliver timely and effective support to Canadians in the face of sudden national challenges and emergencies, as we have seen in the case of the COVID-19 global pandemic.

Bill C-224 would hobble our efforts at supporting Canadians not only nationally, but indeed internationally. Canada has over 100 international tax treaties and agreements that protect Canadians against double taxation and assist in addressing international tax evasion and avoidance. These treaties and agreements specify the Minister of National Revenue as Canada's competent authority, and we have no sense that our international partners would be interested in changing this arrangement. In fact, it is entirely possible that they may not want to interact with two or more separate tax administrations in their many treaties and agreements with Canada. The renegotiation of these treaties and agreements could take years and expend significant financial resources that could be put to better use at a time when we are confronted with challenges like the immense ones posed by COVID-19.

Bill C-224 would also introduce new complexities and costs related to the administration of federal benefits and programs, including the Canada child benefit, the Canada pension plan and employment insurance, given the significant links between these programs and the administration of personal income tax.

Last but not least, the bill could have a negative impact on jobs in communities that depend on them. There are currently between 4,800 and 5,500 CRA employees in Quebec, depending on the time of year, serving at 14 offices throughout the province. Around 60% of them are women. There are also many CRA employees working outside of Quebec who work on federal taxes for Quebec residents. Bill C-224 would inevitably change some of their employment situations. The impacts this carries with it are not just at the personal level, but also at the family and community levels.

While Bill C-224 would require the Government of Canada to carry these costs, it provides no detail or accounting in terms of their skill, which could be significant. Such an open-ended deal could lead to similar demands from other provinces seeking federal funding for the creation of their own tax administrative systems, leading to an inefficient patchwork of separate tax administration programs across Canada. This would lead to challenges similar to those I have just outlined but on a wider scale, with even higher per-taxpayer administration costs.

As I said at the outset, Canadians rightfully expect their governments to administer taxes and deliver programs in a fair, efficient and cost-effective manner. For all the reasons I have outlined today, Bill C-224 falls well short of this goal. Rather than lowering costs for taxpayers and supporting further efficiencies, it would take us in the opposite direction. That is why our government cannot support Bill C-224.

While we remain open to improving tax administration in Quebec, we can do this while maintaining Canada's role as the administrator of the federal income taxes in Quebec. We will continue to work together with Revenu Québec, with which we have a long-standing collaborative relationship, to find ways of streamlining the filing of taxes to ensure better harmonization of our respective tax administrations and make filing easier for Quebec taxpayers.

We are always open to making things better. However, for the reasons I have outlined today, Bill C-224 does not deliver on this front.

[The Deputy Speaker, Bruce Stanton]

Before we resume debate with the hon. member for Sherwood Park—Fort Saskatchewan, I will let him know there are only about three minutes remaining in the time in order for us to permit five minutes for the sponsor of the bill to have his right of reply.

The hon. member for Sherwood Park—Fort Saskatchewan.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I will try to speak quickly.

I am proud to support Bill C-224, which would authorize Quebeckers to file a single tax return.

Some people may be wondering what I am talking about. Quebeckers have to file two tax returns a year, as though filing a single tax return were not already hard enough for many Canadians. Quebec is the only province with a confusing system that requires two tax returns.

Conservatives are proud to support Quebec's desire to require only one tax return to be filed by Quebeckers. It is a reality in other parts of Canada that people only have to file one tax return, and for a lot of people, I think filing one tax return is quite enough.

The government member who spoke before me, in a desperate effort to justify the government's opposition to this concept, trotted out this old Liberal trope that centralization means efficiency, that the more the federal government does, the more efficient it is going to be and, by the way, let us also worry that there will be less work for federal employees, not seeming to notice the inherent contradiction in those arguments.

On the Conservative side, we believe there are many worthwhile things that we could have employees at Revenue Canada do. Perhaps the government could finally support a Conservative idea, which is to give CRA a duty of care when it comes to serving Canadians and maybe redeploy those employees just to have the additional time and flexibility to provide greater service and response and care to people who have questions and issues.

Really, it is just fundamentally, philosophically wrong that the Liberals always think that centralization is efficiency. On the Conservative side, we understand the value of subsidiarity, of having services delivered at the level closest to the people, that it is practical to do so. We believe in empowering provincial governments and municipal governments; respecting the role of families, of communities and of individuals; respecting individual rights and not thinking that the federal government taking more and more power for itself away from individuals, away from families and away from provincial and municipal governments is the way to go. Government is not always the solution, and bigger government, national government, is not always the solution when provincial governments and municipal governments are closer and more responsive to people.

I had many other comments to make, but I will simply say that I am proud to support this bill at this stage.

I look forward to the study that is going to take place at committee as we further work to refine it and to operationalize these principles of subsidiarity and respect for provincial governments that are a key part of what Conservatives stand for.

[The Deputy Speaker, Bruce Stanton]

I am pleased to give the hon. member for Joliette his right of reply.

The hon. member has the floor for five minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I would first like to wish you a happy new year and hope that we will turn the page on this pandemic.

I listened carefully and with interest to my colleagues' interventions on establishing a single tax return administered by Quebec. I will start by thanking my colleague from Montarville for his eloquent speech, and also my colleague from La Prairie. I also acknowledge the speeches made by my Conservative colleagues, who seem to be receptive to this bill. I thank them.

The same goes for my NDP colleagues. I listened carefully to the interventions of the members for Rosemont—La Petite-Patrie and New Westminster—Burnaby. I see that the NDP is open to the principle, but has concerns about protecting jobs. That is my concern as well, and I know that we will be able to improve this bill in committee to address this very legitimate concern. The bill was actually drafted with this issue in mind.

I was very disappointed to hear the Liberal Party members voicing their opposition to this bill, mostly because their arguments are not at all valid. For example, their contention that they plan to vote against the bill in order to save money because it would cost more to administer a single tax return than it would to administer two does not make any sense.

What I understand from their spurious arguments is that the government and the Liberal Party are against the bill but for reasons that they do not want to discuss. That much is clear.

If we were not in the midst of a pandemic, I would try to have an informal discussion with the Minister of Finance to find out the real reasons why the Liberals are opposing this bill. I would like to remind members that this bill on a single tax return administered by Quebec is widely supported.

What is more, this is not a major undertaking but rather a simple improvement to our way of doing things intended to make life easier for individuals and businesses in Quebec. Under this bill, they would have to file only one tax return instead of two and answer to only one agency instead of two. The bill would also eliminate the duplication of effort. That is all.

I would like to point out once again that there is consensus in Quebec on this legislation. The National Assembly has expressed its unanimous support for it. Premier Legault has formally requested it from the Prime Minister of this federal government. An overwhelming majority of Quebeckers support this bill. All of corporate Quebec supports this idea, including chambers of commerce, the Conseil du patronat du Québec, independent business owners, the Quebec CPA Order and many unions.

The bill is good for Quebeckers. According to the IRAI, it will save $425 million a year. Individuals will save $39 million, businesses will save $99 million, and $287 million would be saved by eliminating bureaucratic duplication. This bill will allow Quebec to crack down on tax havens more effectively on its own, rather than relying on Ottawa, which is asleep at the wheel.

This is a pretty simple bill. There is nothing revolutionary about it. It respects the Quebec nation and saves everyone time and money.

I would also remind the House that, 20 years ago, after years of negotiations, Quebec City managed to come to an agreement with Ottawa on the collection of sales tax from businesses. Rather than Ottawa collecting the GST and Quebec collecting the QST, Revenu Québec collects both the GST and the QST at the same time. This means far less paperwork for businesses and generates significant savings. Revenu Québec is present in every region of Quebec, and this system works well. It has been successful, and no one complains about it.

I would therefore ask my colleagues to support this bill for a single tax return administered by Quebec, to finish what was started 20 years ago.