Finance Committee on Feb. 23rd, 2021

[The Chair, Liberal, Wayne Easter]

Mr. Brière.

[Marc Brière]

Thank you, Mr. Chair.

Mr. Ste-Marie, I want to first say that I very much respect your political beliefs.

I did indeed mention that in my opening statement. It would make sense, a lot of sense even, for Revenu Québec to be the only one handling taxation in Quebec, if Quebec were a country. However, since Quebec is a province within a federal system, it's not a good idea. You don't have to take just my word for it; every expert in Quebec who has studied the matter believes the CRA should assume the responsibility. Why? Because it has more tools.

Revenu Québec's jurisdiction is limited to Quebec. Picture this scenario. Let's say I live in Gatineau and I decide to move to Ottawa and take all of my assets out of Quebec. That means I don't have a single asset left in Quebec. My employer is in Ottawa. If I owe Revenu Québec money and it wants to garnish my wages in Ottawa, I say good luck. My employer can say no on the grounds that the agency does not have jurisdiction. As a recovery officer, I know what I'm talking about.

However, if I move from Gatineau to Vancouver or anywhere else, the CRA can track me down and collect the taxes I owe. It can even take action beyond Canada's borders. I, personally, worked on a case where people who owed the CRA money had fled to the United States, so I asked the CRA, in Ottawa, to ask the Internal Revenue Service, in the U.S., to collect the money on the CRA's behalf and transfer it at no charge. Revenu Québec cannot do that. I'm not even talking about tax agreements.

My point is simply this: there are tremendous advantages to having the CRA do the work over Revenu Québec.

You brought up jobs, but I would add that an awful lot of jobs in Quebec would be lost. Quebec's premier was honest enough to say it, so good for him. For those of you who aren't from Quebec, I would even go as far as to say that CRA jobs elsewhere in the country would be lost. Employees in Calgary and Hamilton who work in call centres serving individuals also process Quebeckers' tax returns. Saint John, New Brunswick, Toronto and Edmonton all have call centres that serve businesses. Tax returns filed by residents of Quebec are also processed in Winnipeg and in Sudbury. People working in recovery across the country would lose their jobs as well. Even though those people are based outside Quebec, they, too, are called upon to process Quebeckers' tax returns.

[The Chair, Liberal, Wayne Easter]

Okay. We are going to have to leave it there and go to Mr. Julian for eight minutes—

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

Pardon me, Mr. Chair. With all due respect, I directed my question to Mr. Sylvestre, specifically. I wanted to give him my speaking time to answer the question and provide some examples. The other witnesses did not answer my question.

[The Chair, Liberal, Wayne Easter]

Okay. I didn't see Mr. Sylvestre put up his hand.

Go ahead, Mr. Sylvestre.

[Jean-François Sylvestre]

Thank you for your question.

I was referring to two examples—three, actually. The two most compelling ones involve the GST and QST.

In the 1990s, when the taxes were merged, everyone thought people would lose their jobs, but no one did. People are claiming that this would result in job losses, but I would really like to see some actual evidence of that. It's well and good to say that merging the two regimes will lead to job losses, but the claim has to be backed up by something. Our position is based on two studies.

In the early 2000s, the Quebec government, specifically the department of social solidarity, got the federal government to agree to turn over administration of the GST. The same thing happened in that case: people in the regions did not lose their jobs or their income. They were brought under the department of social solidarity in the same positions and at the same rates of pay until retirement. No one was let go. That was the agreement between the federal government and the province.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Okay, thank you.

You managed to squeeze in 10 minutes there, Gabriel.

We are going to Mr. Julian.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being with us today. We hope you and your families are staying safe and healthy during the pandemic, and we greatly appreciate your dedication to public service, whether in Quebec or the federal government.

The NDP voted in favour of this bill at second reading. Mr. Ste-Marie, my friend and a very committed MP, is the sponsor. We agree that there should be a single tax return, provided that jobs are protected. We feel strongly about that. In fact, it was something we were adamant about when the idea of a single tax return was floated in the past.

My first questions are for Mr. Brière.

Thank you very much for participating today, Mr. Brière.

A week ago today, Mr. Therrien, the House leader of the Bloc Québécois, told the committee that, according to the Minister of National Revenue, people in 5,300 jobs in Quebec work on processing federal tax returns. He said that, once the work being duplicated was eliminated, just 44% of those 5,300 people would really be useful. I found that comment troubling. I didn't like hearing it, and I said so at the time. It goes against the spirit of the bill.

That brings me to my first question, Mr. Brière. Would you say only 44% of the 5,300 people in Quebec who process federal income tax returns are really useful?

[Marc Brière]

I don't think that's the case. People are very useful.

Only 6,000 of the Canada Revenue Agency's employees are in Quebec. The reason I say it's only 6,000 is that there are 45,000 of them in the country. One of the reasons behind that is that the CRA is no longer responsible for administering the GST in Quebec. I wanted to say to Mr. Sylvestre that, when this happened, the Canada Revenue Agency's employees were transferred to Revenu Québec, but that's small potatoes compared to the number of jobs involved in the administration of all taxes. Some of the other activities people are involved in are collection and auditing. As Ms. Daviau said, some members of her organization are involved in collection. That's also the case with us. There are also people working in IT. The CRA employees in Quebec hold a variety of jobs. They work for Quebeckers and process Quebec taxpayers' files. There are sometimes even workloads coming from outside Quebec.

Don't forget that, if a change was made to transfer the responsibility for taxes to the provinces, the Canada Revenue Agency would have no interest in keeping jobs in Shawinigan, as it has been mentioned, since it has other similar centres in the country. So it could transfer those jobs there, as they are transferable. So there would be some nice empty buildings.

There are indeed duplicated positions, if you will. I know this, as I worked at Revenu Québec before working at the Canada Revenue Agency. So I'm familiar with both agencies. I can tell you that both agencies have collection agents and auditors. Arrangements are made to help the two agencies work together better, especially so as to improve the effectiveness of auditing.

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

Thank you, Mr. Brière.

I would like to come back to the repercussions for the regions of Saguenay—Lac-Saint-Jean and Mauricie. I must first tell you that I am a former resident of Saguenay—Lac-Saint-Jean. I learned French in Chicoutimi. I am deeply committed to the idea that jobs should be preserved in the regions, such as in Saguenay—Lac-Saint-Jean. According to the comments I quoted, that does not seem to be the objective. I don't share this idea that the regions will benefit from all those positions being cut.

What impact will the loss of the majority of CRA jobs in Quebec have on Saguenay—Lac-Saint-Jean and Mauricie, two important regions?

[Marc Brière]

As I said before, the impact would be very significant. We are talking about at least 1,200 jobs in Saguenay—Lac-Saint-Jean. Even more jobs than that are occasionally involved. There are 1,500 jobs in Mauricie. That represents payrolls of about $75 million in Mauricie and $50 million in Saguenay—Lac-Saint-Jean. It is assumed that those people spend money in their region, but they will no longer be doing that if those jobs disappear.

You were talking about Saguenay—Lac-Saint-Jean. By the way, congratulations on your French. I'm happy to hear that you improved your French in Quebec. We are talking about the tax centre in Jonquière. However, it should be understood that the Canada Revenue Agency no longer has a lot of tax centres, with only three of them left. The Government of Quebec tax centres are in Quebec City, on Marly Street, as well as in other locations, but none are in Jonquière. If there was a single tax return, and it was administered by the provincial government, it would no longer need to keep a centre open in Jonquière. As jobs would no longer be necessary in that specific region, the government could reassign them to its other tax centres. Those people process tax returns, but, as the T1 return from the federal government would no longer exist, they would have no returns to process. There would be a different tax return under a different name, a combined return for Quebec. Since the Canada Revenue Agency's systems are not designed to process that, they would have to be modified, which would be complicated. So those employees would become redundant.

What's more, a number of employees in Shawinigan and in Jonquière are contract employees and have no job security. So if something like that was to happen, they would lose their job suddenly, very easily. Thousands of Canada Revenue Agency's employees are under a temporary contract, unfortunately, and they are extremely vulnerable. By the way, Revenu Québec also has contract employees. They would be just as vulnerable if everyone had to be put into a single Revenu Québec centre. I can tell you that I would fight to protect the jobs of permanent employees at the Canada Revenue Agency and perhaps even the jobs of Revenu Québec's contract employees.

In short, it would not be simple.

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

You are talking about a loss of 3,000 jobs in Saguenay—Lac-Saint-Jean....

[The Chair, Liberal, Wayne Easter]

Peter, Ms. Daviau wants to make a quick comment, and then I'll come back to you for the last question in this round.

Ms. Daviau.

[Debi Daviau]

Thank you.

I just want to say that I also live in Quebec. I live in Gatineau, and I work in Ontario.

Don't get me wrong. I would love to see a simplified tax system. I really struggle with this, but I am not willing to put thousands of jobs on the line for that. I am not willing to put, potentially, a billion-dollar investment into that just to simplify a system that is working but that is maybe a little bit complicated. I think those investments could be much better made in improving the overall system federally and provincially, but this is not the way. The risk is great to jobs. When you say, Mr. Julian, that you support this with the caveat that jobs will be protected, it's not possible, in my view. It is not possible that jobs won't be affected in this type of transfer.

[The Chair, Liberal, Wayne Easter]

Ask a very quick question, Mr. Julian, and then I know Mr. Couillard wants in as well.

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

Thank you, Mr. Chair.

I will come back to Mr. Brière.

Has a study been carried out by the Public Service Alliance of Canada or by the Union of Taxation Employees to find out how many small and medium-sized businesses would be affected if those two regions were to lose 3,000 jobs?

We are always talking about direct jobs, but we must also consider indirect jobs. Are there any studies on the loss of indirect jobs in those two regions?

[The Chair, Liberal, Wayne Easter]

Could you give us a fairly tight answer, Mr. Brière? I want to give Mr. Couillard the last words.

[Marc Brière]

Sure, Mr. Chair.

We have not carried out any studies, but it is clear that we are talking about a loss of some $300 million for the economy of Quebec's regions. Hundreds, even thousands of jobs would certainly be affected. It should be understood that people who work at the CRA spend money in the cities and villages they live in. If they were to stop working for the CRA, businesses would be greatly affected.

If you were to visit Shawinigan, you would see that closing the verification centre would be a disaster for Mauricie. It would be even more terrible than the closing of the tax centre in Saguenay—Lac-Saint-Jean. If you were to ask anyone living in Mauricie, they would say that those jobs cannot be lost.

[The Chair, Liberal, Wayne Easter]

Mr. Couillard, I'll give the last word to you.

[Jean Couillard]

Good afternoon, Mr. Julian. Your French is indeed very good. Congratulations. You are making an effort, and it shows.

There has been a lot of talk about Shawinigan and Jonquière when it comes to job losses, but we shouldn't forget that there are tax service offices elsewhere in Quebec. There is one in Rouyn-Noranda, in Chicoutimi, in Sherbrooke, in Rimouski, in Montreal, in Trois-Rivières, in Gatineau, in Quebec City, in Brossard and in Laval. All those regions would certainly be affected, but we don't know to what extent, as we don't know all the details. Would this affect only the T1 returns of individuals or businesses....

[The Chair, Liberal, Wayne Easter]

We will go to Mr. Kelly, followed by Mr. Fragiskatos in five-minute rounds. We're going to have to hold to it.

Pat.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Mr. Chair.

It's interesting. If I understand correctly, the institute of the public service would, in a perfect world, conceive of a single return to make it simple but one that ought to be administered by the CRA. If I understand the Syndicat de la fonction publique et parapublique du Québec, they think kind of the opposite, that there ought to be a single return and it ought to be done by Revenu Québec.

If I understood Monsieur Brière correctly, having two returns is a symptom of the problem rather than the problem itself, in that the definitions of income and the complications are the problem rather than the fact that there are the two returns and that one cannot be addressed without the other.

Somewhat lost in this discussion, I guess, is the poor suffering Quebec tax filer who has to file two returns to two different institutions. I am not a Quebec tax filer, and I have never filed a Quebec tax return, but one doesn't need to be to grasp just how inconvenient and expensive this must be, with a very high incidence of filers being compelled to seek professional assistance in filing their returns. We have to solve this somehow and get our Quebec tax filers some relief from the burden of compliance.

I would be happy to have each witness comment from that point of view, the point of view of the Quebec tax filer and of delivering some relief from the cost and burden and complication of just complying with the law.

[The Chair, Liberal, Wayne Easter]

We will start with Mr. Brière and then go to Mr. Sylvestre.

[Marc Brière]

Thank you, Mr. Chair.

I am a Quebec tax filer, so I know what it's like. Yes, there are two tax returns. As I mentioned before, years ago that point would have been more accurate, but right now I don't like it because, for a union leader, that makes it good for jobs, but the fact of the matter is people are filing electronically.

When you file your taxes electronically in Quebec, you punch your numbers in and the system allocates the two returns. Then you just click and send to Revenu Québec, and you click and you send to Revenue Canada. From that perspective, it's not that complicated.

Another thing is that people are thinking about the taxpayers and lessening the burden on them. People are paying their accountant, let's say, to do their taxes. Accountants will not chop their price in half if there's only one tax return, because they use software too. Trust me. You can ask them. Don't count on my answer. Ask the tax experts, and they will tell you. So there won't be any savings. It will be more complicated.

This bill is saying give it to Quebec. Well, I'm sorry. It's not because I'm not the federal government. It doesn't make any sense to give it to the Province of Quebec instead of to the federal government.

The problem is—