Bill C-239

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

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Mr. Speaker, I am pleased to rise to take part in today's debate on Bill C‑239, which deals with a promise that the Conservative Party itself proposed in the summer of 2018.

We also moved a motion on February 5, 2019, here in the House, on this clear and legitimate request from Quebeckers and the Quebec National Assembly, specifically to cut the paperwork burden on Quebeckers significantly by allowing them to file a single tax return.

On April 24, 2021, all of my Conservative Party colleagues voted for this measure in Bill C‑224. The single income tax return responds to a request that is dear to the hearts of the people of Lévis—Lotbinière and all Quebeckers. All Quebeckers are required to file two tax returns as soon as they start earning an income, even if they have not reached the age of majority. This noble and legitimate request will save a lot of time and money for Quebec families and all Quebeckers. It is important to note that Quebec is the only province in Canada that still has to take on this onerous task.

Whether it relates to this bill or any other measure that would be good for the Quebec nation and the entire Canadian population, nothing seems to make the Liberal government lift a finger since it came to power in 2015, because saving time and money is simply not one of its values and is not in its DNA.

Let me give a real-life example of when all my children were still living under the same roof at home. At the time, it meant 14 individual tax returns for one house, plus two returns for my small farm. Think about it, that is 16 tax returns under one roof. That is a lot of repetitive and counterproductive work forced on families, students and young workers, who are eager to be active in the workforce, which is in need of labour now more than ever.

True to their values, Conservatives have always been committed to simplifying the lives of Quebeckers, saving them time and money, and increasing their quality of life.

We cannot shy away from certain words. We are living under a coalition government, and this cronyism between the Liberals and the NDP is disastrous for all Quebeckers and Canadians across the country. This arrangement is damaging our democracy and prevents any good measures from being adopted. We saw proof of this when the NDP and the Liberals voted against Bill C‑224, sealing its fate.

We saw further proof recently with my private member's bill, Bill C‑215, which got a majority but may not be adopted at third reading because the Prime Minister and the Minister of Finance are still refusing to give it a royal recommendation. I would like to remind members that my bill would extend EI benefits for people with serious illness to 52 weeks, a fix for outdated legislation that has not been amended since 1971.

There are a lot of good bills here, including the one before us now, Bill C‑239, which is perfectly valid. However, we have a major problem in the House after eight years of Liberal incompetence that is now making itself felt across Canada and in every sector.

Our Canada is broken. It will never be like it was before. We are experiencing the repercussions of lack of leadership and political will to bring positive, long-lasting change to the lives of people in Canada.

Under the Liberals, life has become very expensive. Inflation, taxes, crime and drug deaths are on the rise. Honest citizens like hunters and farmers are being attacked and penalized by Bill C‑21. We have a Liberal government that will do anything to help its cronies get funding and contracts in exchange for a $500 ticket to a dinner. The Liberals managed to legalize marijuana and now want to decriminalize hard drugs. However, when it comes to helping honest people who work hard, day in and day out, people who are responsible, or people who are seriously ill and simply deserve our support, there is no danger of Liberal favouritism. There is no danger of giving these honest people a free ride. We hear more than a simple “no”. It is a resounding “no” to anyone with common sense and logic, and this is all currently endorsed by the NDP.

This government is really old, worn out and outdated, not to mention fundamentally incompetent.

I remember all too well the Liberal argument against adopting a single tax return in Quebec. I can already see the return of the stale rhetoric of the Minister of National Revenue—we just heard it. The House has already heard responses using the simplistic argument that having a single tax return would result in massive job losses, which is unfounded and, moreover, would happen at a time when there is a dire need for labour across Canada.

I would also like to remind the minister and my colleagues that the number of public service jobs has increased by 32% from 2015. My constituents write to me to tell me that they can no longer make ends meet, have no savings, are using food banks to feed themselves and their family, can no longer afford their rent, have to work when sick or, even worse, have to declare bankruptcy. Like them, I am very worried about our future and that of our children and future generations.

The aspirations of Quebeckers are eroding after eight years of Liberal incompetence. The single tax return that has been a Conservative election promise since 2018 will still not see the light of day, I am afraid. The NDP has to go back to being an opposition party and stop propping up the Liberal government. We all know that the 32 Bloc Québécois MPs are not the ones who can make the change that Canada really needs.

I am proud that the people in my riding, Lévis—Lotbinière, trust me and the leadership of the Conservative Party to put an end to the Liberal incompetence that we have seen for eight years now—eight years too many. The Conservatives are the best equipped to work for a more productive Quebec, a stronger Quebec, a richer Quebec, a Quebec that is a partner in Canada's success, a Quebec that is proud of its culture and heritage, a Quebec that is worthy of the French language, a Quebec that is respected by the Conservative Party of Canada for what it has achieved. The Conservative Party is a proud partner in the success of all Canadians from all provinces.

Historically, the Conservatives have said yes to Quebec's requests. We said yes to the construction of the new Champlain Bridge, yes to the future third link in Quebec City, yes to more power over immigration for Quebec and yes to a single tax return. That is more than a promise of change or lip service. It is a real commitment, a promise that I have been keeping every day in the House for 17 years now, along with my Conservative colleagues. I say yes for Lévis—Lotbinière and yes for Quebec.

[Soraya Martinez Ferrada, Liberal, Parliamentary Secretary to the Minister of Housing and Diversity and Inclusion (Housing)]

Mr. Speaker, today it is my privilege to take part in the debate at second reading of private member's Bill C‑239.

This bill is identical to private member's Bill C‑224, which was introduced and rejected in the previous parliamentary session. By now, hon. members should be quite familiar with the major flaws that resulted in its being rejected. Now that it is once again before us, I feel obligated to use my time to review those flaws.

The bill authorized Quebec or any other province to collect federal personal and corporate income tax on behalf of the Government of Canada. Our government has always recognized that the purpose of this bill, which is to find ways to simplify income tax returns and reduce the compliance burden on Quebec taxpayers, is appealing. We all share that goal.

However, the way the bill seeks to achieve that raises grave concerns about effectiveness, equity, efficiency and value for both taxpayers and governments, including those in Quebec.

At the forefront of these concerns are the serious negative impacts the bill would have on the employment situation of Canada Revenue Agency employees working in Quebec, as well as their communities as a whole.

At committee stage in the previous Parliament, we heard from expert witnesses and stakeholders such as a representative of the Union of Taxation Employees, who warned that “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” and that “the vast majority of jobs that would be lost are held by people living in Quebec who pay taxes there and greatly contribute to the province's economic activity.” As the witness concluded, this “would be devastating, especially for the Saguenay—Lac-Saint-Jean and Mauricie regions. The CRA is the biggest employer in the Mauricie region and one of the biggest in the Saguenay—Lac-Saint-Jean region, along with the mining sector.”

These alarming findings are consistent with the CRA's projections, which show that the transfer of the federal administration of Quebec's income tax could jeopardize approximately 6,000 jobs in the 14 CRA offices in Quebec. The transfer would also affect employees in many offices outside of Quebec, such as the office in Summerside, Prince Edward Island, and offices in Ontario, which also process income tax returns.

We also learned in the previous Parliament that this bill would likely result in higher costs for taxpayers. The existing tax collection agreements produce efficiency gains that result in cost savings for taxpayers. The transfer of the administration of several provinces and territories to one tax administrator, namely the federal government, creates economies of scale and reduces the administrative burden on each taxpayer. Unfortunately, the bill we are discussing does the exact opposite.

This was confirmed by the testimony of a Canada Revenue Agency official when the bill was being studied in committee in the previous Parliament. As she noted, “The required integration between both organizations' processes and technology infrastructures would result in additional expenses. The fixed costs related to the functioning and significant investments in infrastructure by the agency to serve all Canadians will not decrease with such a transfer.” The CRA official confirmed that such a decision would increase costs. She stated, “At a minimum, our estimate at this time is around $800 million.”

This was corroborated by the testimony of a representative of The Professional Institute of the Public Service of Canada, who pointed out that “the numbers don't add up. There are no savings or efficiencies to be gained either for Quebec taxpayers or for those in the rest of Canada”, he added. This same union official then went on to point out that “the most efficient and cost-effective way for Quebeckers to have a single tax return would be for them to ask the CRA to administer all tax collection.” This opinion is shared by the representative for the Union of Taxation Employees. That is not to say that we want to go in that direction.

As the CRA official clearly indicated at committee, the question should not be whether Canada should be in charge of Quebec's taxes or whether Quebec should be in charge of Canada's taxes. The question should be: how can we simplify taxes for residents of Quebec?

Our government completely agrees. That is why we will continue to work and engage with Revenu Québec, with whom we have long had a productive and collaborative relationship, on finding ways to simplify the tax return and reduce the burden on Quebec taxpayers. We will continue to work with Quebec and the other provinces to make things more efficient.

Our concerns about the bill go even further. This bill also raises fears about Canada's ability to meet its obligations under international tax conventions and agreements in effect that state that the Minister of National Revenue is the competent authority in Canada.

Canada has more than a hundred tax conventions and agreements of this nature and renegotiating them could take years and considerable resources, with no guarantee of favourable results. Our international partners may, for example, not agree to change these provisions or be prepared to interact with two or more distinct tax administrations. This situation could in return have serious consequences on our capacity to fight tax evasion and tax avoidance, which relies on tax information exchange agreements and treaties.

Those are the important considerations, and Canadians expect us to take them into account. I want to commend my parliamentary colleagues for doing so when assessing this bill in the previous Parliament and for having rejected this bill.

As we clearly stated, our government is open to improving tax administration to ensure the best possible results for all Canadians in terms of fairness, efficiency and value for taxpayers and governments, including those of Quebec.

We will continue to work with Revenu Québec to find ways to simplify tax returns and reduce the compliance burden on Quebec taxpayers. This will ensure a better harmonization of our respective tax administrations and make it easier for Quebec taxpayers to complete their tax returns.

We are always willing to improve the situation. However, the preponderance of the evidence clearly shows that the bill before us will do the opposite.

[Alain Therrien, Bloc, La Prairie, QC]

moved that Bill C-239, 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.

Mr. Speaker, I am pleased to speak today about the single tax return. I will talk about it more later. Quebeckers have been wanting this for a long time. The House needs to understand why they want a single tax return. The reason is that they have to file two tax returns: the federal return and the Quebec tax return. Why is that?

Let us go back to the beginning. To understand why someone is suffering or to understand a problem, we must learn about the history of the problem. The problem actually began in 1867 when Canada was created. Many believe that it was created by people from Ontario, Quebec and the Maritimes, who were all united in saying that they wanted a country that would be called “Canada” and who were determined to come together. That kind of thing only happens in fairy tales. In reality, it did not happen that way at all.

It is very simple. In 1854, Canada signed a reciprocity treaty with the Americans. Why? Because Canada used to sell goods to its mother country, Great Britain, which later turned to Europe instead. The British said they would not buy anything from Canada anymore; they were turning to Europe and they would do free trade. What happened was that the rich folks in Canada had nowhere to sell their products. They thought it might be nice to sell to the United States, so they signed this reciprocity agreement with the Americans in 1854.

After that, we began trading with the United States. We created trains to sell Canadian products to the United States. Unfortunately, the Americans decided they were going to kill each other with the Civil War. Since the English had an affinity with the south, they allied themselves with the southerners. The northerners won. The northerners wondered who these disgusting people were who had supported the south. It was the mother country, Great Britain, so they decided to take it out on her babies. They turned on us and said they no longer wanted anything to do with us.

We wondered what we would do if we could no longer sell to the Americans. That is when a few visionaries, the fathers of Confederation, quickly met together. We are not talking about a huge group of people coming together in song. No. They were wondering what they should do, because they could no longer sell their products. That is when Canada was created. There was no singing, no music, no speeches. It was just the fathers of Confederation meeting together for the first time in Charlottetown talking amongst themselves. They were plotting. In the end, they created Canada. People were wondering what that was. One Quebec humorist always said that Canada was doomed to failure because a bunch of fathers giving birth to something was never going to work.

In 1867, the fathers of Confederation felt it was absolutely necessary for the federal government to be very strong, so there would be a very united market. The provinces' powers needed to be limited, to prevent a civil war from breaking out like in the United States. The fathers of Confederation decided to make the provinces insignificant. The provinces would be given some taxing rights and a few responsibilities. The fathers of Confederation thought they were great visionaries. A blind mole has more vision.

Later on, they decided to give Quebec and the provinces a little bit of power, in other words the right to manage education and health, things they felt were insignificant. At the time, those things were the responsibility of the clergy. One hundred years later, we see that they were way out in left field. They also decided to give the provinces income tax, because they did not know what it was and thought it likely would not matter much. That was a serious mistake.

That is where my story begins, when they gave income tax to Quebec and the provinces. The first province to realize that there was something to this was British Columbia. It got to work and started to collect money in 1873.

Then came the First World War. The federal government figured it would be a good idea to tax income to pay for that war. That was in 1917. The federal government realized it could bring in a lot of cash that way. The tax was not supposed to outlast the war, but the government decided to keep it to pay off the debt. After 1929, the government said it would keep it because the dirty thirties were trying times. It spread its tentacles and made itself right at home.

Then came the Second World War. Subtle as a brick through a window, the government decided to maintain the status quo. After the war, they figured everything was fine, so why change it ever?

The federal government talked about benefits, and all the provinces except Ontario and Quebec reached an agreement in 1947. The government did it again in 1952. It told the provinces that was that and it was taking over that tax field going forward. Everyone got on board, except Quebec. Quebec always marched to the beat of its own drum, which is to be expected considering we are a nation and a people.

Quebec struck the Tremblay commission to figure out what to do about it. Before long, a consensus was reached, as articulated by Duplessis. In 1954, Quebec told Canada to make room in that tax field because it wanted its share too. The public service needed big changes, and Quebec needed money. That is why we have to submit two tax returns.

The Bloc Québécois is proposing that there be only one tax return. In Canada, there would still be two tax policies. The federal government and the Quebec government would each have their own tax policy. However, there would be only one tax collector, and that is Quebec. It will collect all the income taxes. At the end of the year, the government that collects the tax will write a cheque to the other government and give it the money it is owed under its tax policy. The government that is not responsible for collecting the money will pay for services rendered.

This model already exists. Some say that it does not make sense, but they just need a little more vision. This model is already being used for the GST and the QST, and no one has died so far. It has not been a huge pain, and no one is going around saying that it is so awful they will die. This model exists. Quebec collects the GST for the federal government. There is only one tax collector. The federal government tells Quebec to go and get the money in a certain way and sends a cheque at the end of the year. It sends $145 million to Quebec as thanks, so that Quebec can pay its officials. That is how it works.

The tax collector should be Quebec, because Revenu Québec asks for a lot more information. The Quebec government's policies and interventions are more numerous and more complex. Quebec needs more information because it manages child care, schools, health care and so on. It needs this information so it knows where to provide these services. Tax data allows the government to do that. For instance, it uses the data to determine support payments for separated couples. The Quebec government can then deduct the amounts at source and give them to the spouse who is entitled to them.

Plus, if Quebec continues doing the collecting, it will not lose a jurisdiction that is required for collection. It keeps its jurisdictions. If Ottawa stops acting as the collector in Quebec, but continues collecting in the other provinces, there is no problem, it will keep those jurisdictions.

In addition, Quebeckers want the Quebec government to be in charge of collecting this money. Quebec's National Assembly unanimously passed a motion to that effect on May 15, 2018. Even the staunch federalist Philippe Couillard was there and voted for it. I was the one who tabled the motion. I remember, I was there. I could see Philippe Couillard, staunch federalist that he is, smiling. He knew what he was doing and he thought it was a good idea. In addition, the motion stated that Quebec would collect the taxes.

Why do that? It saves time and money. According to economist François Vaillancourt, it takes Quebeckers 10% longer to file their tax return than if they only had to file one. This is scientifically proven with econometric models. We are not talking 50% longer, just 10%. With technology, it is 10%. That amounts to $39 million a year for Quebeckers who have someone else file their tax return.

That would represent $99 million in savings for entrepreneurs. In addition, entrepreneurs should have less paperwork and we should help them. ensuring that they only have to file one return is one way to help them. It would be much simpler and would represent $99 million in savings.

No one needs a PhD in mathematics to understand that when the federal government and Quebec each have their own returns, two people are doing the same job. Can we afford to have two people doing the same job? That could mean $287 million per year in savings that would be shared by the federal government and Quebec. It would benefit everyone. We must understand that it would be beneficial for everyone, and I am not just talking about the time we could save.

What are the counter-arguments? First, jobs. Two people are doing the same job, and we have to wonder why that work cannot be done by a single person. Seems sensible to me. People will lose their jobs, they say. Yes, but here is the thing. Quebec will hire some of them because there will be more work to do and it will need more people, so some of them will go work in Quebec, and it will be easy enough to give them the same working conditions they had in the federal public service.

Keep in mind that we are in the third decade of the 21st century, and we are not seeing the 13% and 15% unemployment rates we used to see.

Mr. Speaker, you are young, but I am sure you have heard about high unemployment in the 1980s. Those days are done. The problem now is a labour shortage.

The government keeps going on about how the passport situation is tough because there are not enough workers.

People who contact the Canada Revenue Agency are not getting any service. We are told that it is because of the labour shortage. People who need EI are not getting the services they need. We are told that it is because of the labour shortage. The immigration department is assigning files to people who do not even work there anymore. Once again, it is because of the labour shortage.

What I am saying is that there is a pool of extremely competent workers in the government who can stay at the Canada Revenue Agency, which will need more people. They could also work on tax evasion files, or they could go and work elsewhere in the public service. Plus, if this is done gradually, they can all transition to retirement and their positions can be eliminated through attrition.

Some people will argue that the feds share information with other countries. When tax returns are filed, we have to talk with other countries to avoid doubling up on accounting and taxation. If Quebec were collecting taxes, those agreements would no longer be valid.

However, we could tell the United States that the federal government used to provide this service, but that Quebec is now doing it and that the agreement is off. When the United States finds out that Quebec is a free trade zone now, that people are leaving the U.S. to work in Quebec and that it will not have any information anymore, it will get in touch with the Quebec government. That is how it will work itself out.

The last criticism of this idea is not complicated. Some say that the federal government would lose out on information that is important for keeping its public service running and for making informed decisions. That is not true, because the Quebec government collects more information than the federal government. The Quebec government could simply transmit any information requested by the federal government. The opposite cannot happen, because the Quebec government has a much larger database. This is why a single tax return is needed. It is as simple as that.

In 2019, Quebeckers were surveyed on whether they were in favour of a single tax return with Quebec as the tax collector. Fully 65% of respondents said yes, 22% said no, and 12% were not sure.

The National Assembly of Quebec is on our side, Quebec is on our side and common sense is on our side. It is time to join the 21st century, figure out a smart way to deal with the labour shortage and pass this bill.

[Alain Therrien, Bloc, La Prairie, QC]

moved for leave to introduce Bill C-239, 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.

Mr. Speaker, it is well known that Quebeckers are the only ones who have to file two income tax returns come tax time. The desire for a single tax return administered by one specific government, in this case the Government of Quebec, is gaining traction. With this change, Quebeckers would only have to file one tax return, and one government would be responsible for collecting the other government's taxes.

The idea of moving to a single tax collection system reached a pivotal point on May 15, 2018, when the Parti Québécois MNA for Sanguinet introduced a motion calling for a single tax return in the Quebec National Assembly. This motion was unanimously adopted.

Subsequent polls showed that more than 70% of Quebeckers were in favour of a single tax return administered by the Government of Quebec.

Lastly, the Research Institute on Self-Determination of Peoples and National Independence conducted a study in 2020 that showed that a single tax return in Quebec would save more than $425 million a year.

This bill would finally allow Quebeckers to file a single return, which would be administered by the Government of Quebec.

(Motions deemed adopted, bill read the first time and printed)