Evidence of meeting #21 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was quebec.
A video is available from Parliament.
5:05 p.m.
Conservative
Pat Kelly Conservative Calgary Rocky Ridge, AB
I'm sorry to interrupt. I know I invited the other witnesses to answer too, but I want to follow up on a point there.
5:05 p.m.
Conservative
Pat Kelly Conservative Calgary Rocky Ridge, AB
I'm asking this question because I don't know the answer.
The incidence of professional filing, the number of Quebeckers who pay somebody else to prepare their returns—how does that compare to the numbers for the rest of the country?
5:05 p.m.
Liberal
The Chair Liberal Wayne Easter
Could we go to Mr. Sylvestre first and then back to Mr. Brière on that one?
Mr. Sylvestre, you wanted in.
5:05 p.m.
Vice-President, National Executive, Syndicat de la fonction publique et parapublique du Québec
Mr. Kelly, I'm also a Quebec taxpayer, and filing two tax returns is complicated. When it comes to knowing how many people—both in Quebec and in the rest of Canada—have professionals file their tax returns, it is a bit difficult to answer because that's a personal decision, unless there is a national survey on the topic.
I wonder a great deal about a particular problem. You are talking about taxpayers' money. We argued that both levels of government would save money. Earlier, someone talked about a cost of $1 billion to merge federal and provincial tax returns. We are talking about annual savings of $425 million. Over a 10-year period, those savings would accumulate to several billion dollars. So the cost of that merger would be paid off quickly.
Where savings for taxpayers are concerned, people often look at the short term, but, on the contrary, the long term should be considered instead. I have often been told that a politician thinks of the next election, while a statesman thinks of the next generation. I think that's important.
It is said that, if the provincial government was to manage federal taxes, and a single tax return was used only in Quebec, jobs would be lost, but let's imagine the opposite. If the provincial and federal income tax returns were merged and we went back to the system we had in the 1950s, when the federal government managed Quebec's taxes, 12,000 jobs would be lost in the Government of Quebec. In the situation we are considering, it's a matter of 2,000 or 3,000 jobs.
In either case, as a unionist, I cannot say I am in favour of job losses. What I am saying is that we must consider the Quebec experience. When two departments were merged in Quebec, no job losses occurred. Trying to prove to me that job losses did occur or tell me that jobs will be lost when no studies have really been conducted on the issue is guess work.
5:05 p.m.
Liberal
5:05 p.m.
National President, Union of Taxation Employees
I tried to answer the question asked by Mr. Kelly: how much more complicated is it in Quebec than elsewhere. It's obvious. It's easy. There are two bills: the Quebec tax law and the federal tax law. That's why it's more complicated, because Quebec created its own tax law. That's okay; that's the prerogative of the province. They can do it. It's legit. But that's why it's more complicated.
So the experts are saying as long as you have two income tax acts with huge differences—and the Quebec tax act is very complicated—there's no hope to make this simple for people. There are two bills, two acts. Until that's addressed and harmonized, seriously, we're dreaming in technicolour to have one income tax return, if it can look that simple.
5:05 p.m.
Liberal
The Chair Liberal Wayne Easter
I'm sorry, we're going to have to go on to Mr. Fragiskatos and then on to Mr. Ste-Marie for a short question.
5:05 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you, Chair.
Thank you to the witnesses.
I think it needs to be said, Mr. Chair, that among the members of Parliament on the committee who have sat with Mr. Ste-Marie, we recognize him for what he is, someone who only makes contributions to this committee, who brings a wealth of economic knowledge to the committee, who has been an outstanding colleague and very easy to work with over the years. I say that because Mr. Brière, with all due respect, at the outset of your presentation, you said the bill reflects the political convictions of the member, emphasizing the word “political”. Unless I misunderstood you, of course, but I think if there are disagreements, we're going to focus on policy here. I wanted to make that comment and put it on the record.
Mr. Brière, you talked about job losses. I did not hear anywhere in your presentation about the average pay of public servants, those who would lose their job if this bill went through. What is their average pay? You talked about well-paying jobs, as did Ms. Daviau. Do you have numbers you could share?
5:10 p.m.
National President, Union of Taxation Employees
First, I want to mention that I did not mean any disrespect when I talked about politics. I know the intent is to try to make the life of Quebeckers easier. It was obvious to me, but I want to focus on policies as well. So if I have offended anybody, I apologize.
5:10 p.m.
National President, Union of Taxation Employees
I'm not going to talk for my members; they are members of the Union of Taxation Employees and not my members, I'm only the national president. It's about $55,000 a year on average, maybe $55,000 to $60,000. We signed a bargaining agreement; after four years we have contracts, now we've got a good contract, of about $55,000 to $60,000. The members Ms. Daviau represent have higher salaries. They have different jobs.
5:10 p.m.
President, The Professional Institute of the Public Service of Canada
For the most part, my members are working on large corporate taxes, not on individuals' taxes, as Mr. Brière's members do. They do earn slightly more—I don't have the average—because of the knowledge and aptitudes required to work on those complex international and large corporate files.
5:10 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Ms. Daviau, I'll stay with you. I wonder if we could focus just a little more on your comment on the unintended consequences of the bill. You talked about “balkanization” in the tax system. Could you expand on that just a bit?
5:10 p.m.
President, The Professional Institute of the Public Service of Canada
Yes, for sure. I'm not a tax expert, honestly; I've just educated myself on this issue. I've looked at a lot of experts' writings on this, and all the evidence shows that the more we decentralize a tax system, the more regressive that tax system becomes—for example, Marc Lee in 2007 and Kesselman and Cheung in 2004.
As Lee and many experts have found, the progressivity in Canada's tax system largely stems from federal taxes. This is even more the case now as the federal government has introduced more progressive tax measures at both the top and bottom ends of the tax system.
It's driven not just by politics, but also by imperatives. We have much greater inter-regional than international mobility, so it's really important that the federal government is involved in the development of the policy, the administration and the collection of taxes. Otherwise, what we might see, and what we have seen historically, is an eroding tax fairness in Canada.
Models show that clearly there has been progressivity that stems from federal taxes. Those models are supported in a lot of studies, as I mentioned during my presentation. I'd be happy to provide the committee with links and copies of those various studies.
5:15 p.m.
President, The Professional Institute of the Public Service of Canada
All the experts say the same thing. They say that progressivity and tax fairness dissipate as we decentralize the tax system and allow provinces more autonomous ability, I guess, to do what they need to do. That isn't always in line with the best interests of all Canadians.
5:15 p.m.
Liberal
The Chair Liberal Wayne Easter
You have two and a half minutes, Gabriel, followed by Mr. Julian with the same.
5:15 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
As far as I know, the Quebec tax system is much more progressive than the federal one. In theory, I can understand the argument, but when we look at the facts, that's not what we are talking about.
In any case, it's a bit off topic. The goal of the bill is not to harmonize and tell the federal government that its tax brackets should be the same as in Quebec. The goal is for taxpayers and businesses in Quebec to have only one tax return to file and a single telephone number to dial, instead of two. What is more, Revenu Québec will transfer information to the Canada Revenue Agency, and every piece of legislation will apply. We are not asking the federal government to harmonize its taxes or its tax rules with those in Quebec. We are not talking about that at all. I just wanted to clarify this.
Earlier, Mr. Julian reminded us of Mr. Therrien's comments. I know my colleague Mr. Therrien very well. He took a bit of a shortcut in what he said. What we are discussing and what motivates us in this bill is the idea of using resources more efficiently—for example, by avoiding the duplication of work by Canada Revenue Agency employees and Revenu Québec employees.
As for job losses, mention has been made of 1,200 and 1,500 jobs. However, I don't think all those jobs would be threatened. It's just a matter of ensuring, for the sake of efficiency, that two people are not doing the same job. In the bill as drafted, job maintenance is one of the requests made to the government. Those people could be given other tasks and integrated into the Quebec public service. The bill was drafted according to that logic. Ottawa would be making the political decision after that. Of course, I am very sensitive to the fact that jobs should be maintained in the regions.
I would like to share my remaining time with Mr. Sylvestre if he would like to talk to us about establishing a single tax return and about issues he considers most important in this bill.
February 23rd, 2021 / 5:15 p.m.
Vice-President, National Executive, Syndicat de la fonction publique et parapublique du Québec
Thank you, Mr. Chair.
I think Mr. Kelly talked about this earlier. Simplifying the process a bit by adopting a single income tax return would certainly make people's lives easier. We know that, in Quebec, having to file two returns can sometimes be complicated. However, the main reason why we at the union have been defending this position for three years is that there really are savings to be made. If this was to lead to job losses and would not result in savings, we would not be at the right place here today, and we could not say that we are a union that defends its members and jobs in Quebec.
We feel that savings of $400 million to $425 million a year are significant. Earlier, some people were saying it could cost $800 million to merge the two returns, but after a few years, the change would easily become profitable. We are not talking about a major problem. That is why a long-term vision is essential. A short-term vision makes us see only the cost of that merger.
Moreover, we really believe that this would help transfer jobs elsewhere. If there are jobs in the federal government that can be useful elsewhere, people can still be transferred to other regions. There is currently a labour shortage in the country and in Quebec....
5:15 p.m.
Liberal
The Chair Liberal Wayne Easter
I hate to cut you off, Mr. Sylvestre, but we'll have a very quick answer from Ms. Daviau and then we'll have to move on to Mr. Julian.