Finance Committee on Feb. 23rd, 2021

[Debi Daviau]

That would probably be an easier question for Canada Revenue Agency to answer, but we'll do our very best to get that together.

[The Chair, Liberal, Wayne Easter]

Mr. Couillard, go ahead, and then we'll go back to Mr. Brière.

[Jean Couillard]

As Ms. Daviau said, the CRA would be in a better position to respond to you.

I don't have any figures for you, but Mr. Brière may have some.

[Marc Brière]

I would be lying if I gave you a precise number, so I will not do that. I can tell you there would be hundreds of jobs, easily. We would be talking about maybe even a thousand jobs. We can try to get numbers.

You asked where. I mentioned it in my opening remarks, I believe. We have call centres. You know how during the tax season people call the call centres? We have some for individuals in Calgary and Hamilton and we have bilingual agents and unilingual agents who answer calls from different places around the country, including Quebec.

We also have a business window call centre in Saint John, New Brunswick; Toronto; and Edmonton. We also have people processing tax returns at huge centres in Sudbury and Winnipeg. On top of that, we have collections officers across the country who are working on the national workload. If you think about it, having eight million Quebeckers not dealing with Revenue Canada anymore and dealing only with our new Quebec system would mean major job losses in Quebec and a lot of other jobs affected in different locations around the country, without a doubt.

[The Chair, Liberal, Wayne Easter]

All right, we will move to Mr. Fast.

You have a five-minute round, Ed.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Chair, with your indulgence, I'd like to cede my time to Mr. Berthold.

[The Chair, Liberal, Wayne Easter]

Okay. Mr. Berthold, you're on.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you, Mr. Chair.

I also want to thank my colleague, Mr. Fast.

I think that we're straying from the topic. We're talking a great deal about jobs. However, I think that, by working together, we can make life easier for Quebeckers. I was pleased to hear Ms. Daviau say several times that we can do so while preserving jobs.

Mr. Brière said earlier that the Conservative Party, during the most recent election campaign, stated that it would try to find a way to keep people employed in Shawinigan and Jonquière. Since the start of this discussion, we've been talking about positions, as if they didn't involve people, human beings. We've been talking about moving people and turning them into special collection officers. We're saying that they can be moved without losing their jobs. For both regions, this is a significant and tangible reality.

That's why we were more interested in finding a way to work on the form so that everyone could continue to process taxes properly. Unfortunately, the bill goes a little further. According to Mr. Ste-Marie, the bill is meant to enable the provincial government to collect federal personal and corporate income taxes on behalf of the Government of Canada. We're talking not only about establishing a single tax return, but also about collecting taxes. Given what lies ahead, this is an important distinction.

In addition, the bill addresses the whole issue of tax evasion, which has absolutely nothing to do with a single tax return for Quebeckers. The following simple question is for both the Syndicat de la fonction publique et parapublique du Québec and the Union of Taxation Employees, so for Mr. Brière.

Why do workers' representatives seem to have so much trouble saying that it's possible to agree on a single tax return that will make life easier for Quebeckers? That's my question for you. Since the start, some have wanted to take jobs away from others. We want those jobs and we want to protect them. However, the goal here is to create a single tax return.

It is possible to work together on this?

Mr. Brière, can you answer this question?

[The Chair, Liberal, Wayne Easter]

Mr. Brière.

[Marc Brière]

Thank you, Mr. Chair.

Mr. Berthold, thank you for the question. I'm glad that you asked it.

Of course, we want to protect jobs. However, I want to remind you of what the experts in Quebec are saying. Pardon the expression, but it's a mess. There are two tax laws. Moreover, despite the good intentions that I acknowledge in the bill proposed by Mr. Ste-Marie, this is a very difficult undertaking that will cost someone, somewhere very dearly.

I'll give you a basic example. At the request of two members of the House of Commons, the parliamentary budget officer prepared a report, which was tabled on May 24, 2018. The report is entitled “Taxation of employer-provided health benefits.” The federal Income Tax Act makes an exception for these employer-provided benefits for employees. Hundreds of thousands, if not millions, of Canadians receive these benefits. In Quebec, these benefits are considered a taxable benefit. The study conducted by the parliamentary budget officer, which I can give you, explains that, in order to file a single tax return, only one employment income, not two, must be reported.

For example, on the T4 form of a person in Quebec who receives benefits from their employer, one amount is reported and on the Relevé 1 from Quebec, another amount is reported. This amount includes the taxable benefit. Two incomes can't be reported on the same form. The parliamentary budget officer has found that, if the federal government were to conform to the Quebec legislation by treating this as a taxable benefit, it would amount to $2.8 billion a year in additional taxes for individuals and an additional $1 billion in lost benefits tied to the old age pension, family allowances for children, and so on, for a total of an additional $3.8 billion for Canadian taxpayers.

If Quebec wants to fall in line with the federal legislation, it will need to provide the exemption that the federal government grants for this benefit. I don't have any figures on hand. However, I can tell you that these amounts certainly account for hundreds of millions of dollars a year for Quebec. That said, the federal government and the other provinces don't work this way. It's irreconcilable. It will cost Quebec hundreds of millions of dollars in lost revenue, or it will cost Canadian taxpayers billions of dollars for us to fall in line and have a single tax return. I'll spare you all the other complications associated with having two different laws. There must be one definition of income, but there are two, because there are two laws. There are significant differences between the two laws.

[The Chair, Liberal, Wayne Easter]

Mr. Brière, I want to go to Mr. Sylvestre, and I see that four witnesses have their hands up.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

It was a good question, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

I'll go to Mr. Sylvestre, and then we'll have to go to Mr. McLeod.

[Jean-François Sylvestre]

Mr. Berthold, your question is excellent. You said earlier that there would be job losses. However, I must point out that two of Revenu Québec's largest centres are located in Jonquière and Shawinigan, respectively. If there were a single tax return and its processing were transferred to Quebec, it would be the same region and two home bases in virtually the same places.

We're talking a great deal about the administration aspect. The duplication of work, which is done in two places, to process tax returns costs Canadian taxpayers more money, of course. It would be more cost-effective to have one processing location. I think that this has been established.

Mr. Berthold, if you ask Mr. Brière and me the question, we'll certainly answer yes. We protect our members. We do this each and every day. However, you must do the math. In Quebec, 6,000 federal employees and 12,000 provincial employees are responsible, in one way or another, for both federal and provincial taxes. This must also be taken into consideration.

[The Chair, Liberal, Wayne Easter]

Do Mr. Couillard and Mr. Gaudreau have a quick point?

[Jean Couillard]

Having two levels of government makes things very complicated for taxpayers. There are costs for taxpayers as well. Bill C-224 won't address the costs and complexity of tax returns. Both laws need to be simplified. Unfortunately, this won't happen at my level. It must happen at the political level. Until both levels of government talk to each other to try to simplify tax returns, nothing will happen, unfortunately. As an auditor, I couldn't simplify tax returns even if I wanted to.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Gaudreau.

[Julien Gaudreau]

Thank you, Mr. Chair.

We're talking a great deal about a single tax return as if it were just one form. However, we should be talking about a single tax return process. Of course, tax collection is more than just processing forms with the correct information.

It also involves considering all requests for additional information, investigative processes, and questions for the various revenue agencies. Right now, the whole process is duplicated. A single tax return means a single process.

We're proposing a single tax return in Quebec to ensure that there's also a single process with only one point of contact, the party closest to the field. In this case, it's obviously the Quebec revenue agency. This also follows the principle of subsidiarity, meaning that the process can be carried out at a level as close to the people as possible.

People benefit significantly from having a single tax file and a single place to ask questions. A single tax return in Quebec would improve the quality of the public service. The opposite would be true if these activities were transferred to the federal government.

[The Chair, Liberal, Wayne Easter]

We're well over, but we'll have a quick answer from Ms. Daviau and then we'll go to Mr. McLeod.

[Debi Daviau]

Yes, in a super quick 10 seconds.

You're oversimplifying this. The federal Income Tax Act is four inches thick. You just can't put it all on the same form. You need to take a step back and figure out a mechanism to simplify it that's driven more by informatics, artificial intelligence and some of the solutions we have for the future. Let's not look at old solutions to new problems.

[The Chair, Liberal, Wayne Easter]

Okay.

Mr. McLeod, you have five minutes or thereabouts, as it seems today.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you to all the witnesses.

It's a very interesting discussion. I'm from the Northwest Territories, which is a long ways from Quebec, but I think we can all appreciate that having two separate tax systems to collect income tax is more costly. It's the same group of taxpayers. There are issues of administration and compliance. It would be cheaper to do it under one system.

I think we're talking about two different things. At least, that's the understanding that I'm getting. I don't understand why it isn't all part and parcel of the same discussion. We're talking about the collection of taxes, but I don't hear any desire to move towards a harmonization of taxes. I don't think the Quebec government's proposal, the proposal that we're talking about, includes any harmonization with the federal law. To me, that means that there are still going to be two sets of calculations happening even though they may be sent to the same address. I would say that that's still a duplication in the same form.

My question, first of all, is for whoever wants to answer it: Why isn't harmonization on the table as we discuss solutions to this issue?

[The Chair, Liberal, Wayne Easter]

We'll start with Mr. Brière. Then I believe we'll go to Ms. Daviau.

[Marc Brière]

Thank you, Mr. Chair.

Mr. McLeod, I want to really thank you for the question. You got it; you got it. You're talking to witnesses that are all involved in unions. We are giving you our side of it with job losses and all that. That's okay. We can argue savings and all that.

What you just said is what the tax experts in Quebec have said, and I would invite the members of the committee to maybe consult tax experts, reports, articles in Le Devoir that I could provide to you where the conclusion is exactly what you just said. You cannot have a single income tax return right now in Quebec. It's not feasible. It's not possible right now. It's not realistic because there are two income tax acts. That's why there's a problem. I'm not judging. Quebec has its tax act, and Canada has its tax act. There needs to be harmonization. You cannot get around it. I know that you would like that, Mr. Ste-Marie, but I'll be honest with you: It's not possible. If you don't believe me, check with tax experts, and that's the first answer they will give you: that you need to harmonize. That's why I'm saying that the Quebec government will not have a choice other than to lose some of its autonomy to match some of its tax policies with the federal government and the nine other provinces, unless you convince the federal government and the nine other provinces to match some of theirs with the Quebec government—good luck with that.

That's why it's a problem. That's why it's not simple. You cannot do a single income tax return with two tax laws with so many differences. It's as simple as that.

[The Chair, Liberal, Wayne Easter]

Ms. Daviau.