Finance Committee on Feb. 23rd, 2021

[Debi Daviau]

The question ought not to be, should Canada take over Quebec's taxes or should Quebec take over Canada's taxes? The question ought to be, how do we simplify taxes for Quebec residents? I certainly think there is a way. I mentioned automatic tax filing. That would help a large percentage of individuals not to have to deal with a complex, two-form system.

There are ways to manage this without overhauling and investing huge amounts of money and taking the risk that the end result doesn't work as well as the product we have today. That's all I wanted to throw in there.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Julian is next, and then we're on to Mr. Falk.

Peter.

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

Thank you, Mr. Chair.

If I understand correctly, you are giving me three minutes. Is that right?

[The Chair, Liberal, Wayne Easter]

It's two and a half, but you'll get three.

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

That's very nice. Thank you very much.

I will again turn to you, Mr. Brière, but also to you, Mr. Couillard, on the issue of tax havens. You said it would be more difficult to combat tax heavens. I don't think that has really been confirmed. In fact, if the affected employees were moved to positions related to combatting tax havens and people from the Canada Revenue Agency were given the necessary tools, we could combat tax havens even better.

Gentlemen, if people from Jonquière and Mauricie were moved to positions within the Canada Revenue Agency, specifically related to the fight against tax avoidance, tax loopholes and, of course, tax havens, would that enable us to recover the money going into tax havens? According to the parliamentary budget officer, those amounts total $25 billion a year.

[The Chair, Liberal, Wayne Easter]

Mr. Brière.

[Marc Brière]

Thank you, Mr. Chair.

Thank you for the question, Mr. Julian.

As I was saying, during the 2019 election campaign, the Conservative Party spoke about the possibility of people in Quebec losing their jobs at the CRA, especially the people in Shawinigan and Jonquière. There was talk of moving them to other positions to make them experts in the fight against tax evasion.

With all due respect to our union members, I believe that it's impossible, if not unthinkable, to do so. They have less training than the members of the Professional Institute of the Public Service of Canada, represented by Ms. Daviau. Jobs at the CRA in the fight against tax evasion require an accounting qualification and a university degree. The jobs also require several years of experience at the CRA.

For example, our union members who process tax returns in Jonquière wouldn't be qualified for this work, which requires education and years of experience at the CRA, as I just said. These people will end up unemployed, unfortunately. In the Saguenay—Lac-Saint-Jean region, there aren't 1,200 jobs available for people who prepare tax returns, either at the federal or provincial level. The situation is similar in the Mauricie region.

I want to point out that people do this type of work in other regions of Quebec, particularly in Laval and Montreal. These people would also lose their jobs. It would be difficult to transfer them to other positions elsewhere, unless they move to Revenu Québec. In Quebec, 18,000 people prepare tax returns at both Revenu Québec and the CRA. That's a lot of people. Job losses would be inevitable.

Mr. Ste-Marie, you said that there were no job losses during the transfers. I can give you the example of Ste. Anne's Hospital in Sainte-Anne-de-Bellevue, where the federal transfers to the province have been disastrous and where a number of jobs have been lost.

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

We could talk about this again.

[The Chair, Liberal, Wayne Easter]

I'm sorry, we're going to have to move on to Mr. Falk, and hopefully—

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

Excuse me, Mr. Chair.

I asked Mr. Couillard the same question.

[Jean Couillard]

I agree with Mr. Brière.

In short, I would say that international tax cases are mainly handled in Quebec City, Montreal and Laval.

[The Chair, Liberal, Wayne Easter]

Okay.

Hopefully, Mr. Sylvestre, you'll be able to come in on the next round, because we have to move on.

We have Mr. Falk, followed by Ms. Dzerowicz, for five-minute rounds.

[Ted Falk, Conservative, Provencher, MB]

Thank you very much, Mr. Chair.

Thank you to the witnesses for coming today to give their opinions and perspective on this issue.

I can't imagine having to file two tax returns; I think it would be very burdensome. I think the idea of having a single tax return for all Canadians is a great concept.

Can you as witnesses give me a cost-benefit...? My accountant is always asking me the cost benefit—what's the cost and what's the benefit?

Outside of an employee perspective.... My experience with CRA is that we've never had too many CRA employees. At least whenever I've wanted to get something resolved, it's hard to find people who have the time to deal with the situation. I don't think anybody needs to lose their job, even if we streamline our processes a little bit.

Could you give me a brief cost-benefit analysis of doing this or not doing it?

[The Chair, Liberal, Wayne Easter]

Who wants to start?

Ms. Daviau, did I see your hand up?

[Debi Daviau]

Sure. I'll start.

We don't have the actual numbers, so we're speaking in generalities. Those numbers you can get from CRA or Revenu Québec.

I can tell you this: This is like a make-work project. Every dollar that is spent transferring this responsibility to the Province of Quebec is money lost, money that could have better been invested in other areas, in tax evasion, if you will. I represent the auditors who work in tax evasion and international taxes. They're begging for additional resources for systems that are more complex and can battle some of the systems they're working against, for the education, knowledge and expertise required to continue to go after that money. There are a lot of ways that you could improve in that area without looking at this.

Again, I want to go back to the intent. If the intent is to simplify for Quebeckers, there is a way to simplify without this massive overhaul on both the provincial and federal taxes, and that's what you ought to be focused on as a solution.

[The Chair, Liberal, Wayne Easter]

Mr. Sylvestre, you had your hand up there. Do you want in?

[Jean-François Sylvestre]

Thank you.

I want to quickly address the tax haven issue. We were told earlier that the people at the CRA wouldn't be able to conduct this research. It's also a matter of political will. This will is much stronger in Quebec than it has been in Ottawa in recent years.

However, there may be issues surrounding agreements with Organisation for Economic Co-operation and Development, or OECD, member countries to retrieve money hidden in tax shelters. It's really a matter of political will.

I want to point out that the Quebec government has just tabled Bill 78 on corporate transparency, specifically to find out where this money is going. Revenu Québec has been doing this for a long time, as we said in our presentation. Using artificial intelligence, it's possible to determine whether people's earnings are in line with their assets and lifestyle.

I think that we're very well equipped in this area. Canada Revenue Agency employees could be trained to conduct research on tax evasion. That would be a good way to move them to better-paying jobs, instead of losing jobs. The people in these positions would contribute to the local economy.

[The Chair, Liberal, Wayne Easter]

Mr. Gaudreau has had his hand up here, and he hasn't responded yet, so I'll let him in and then come to you, Ted.

Mr. Gaudreau.

[Julien Gaudreau, Political Consultant, Syndicat de la fonction publique et parapublique du Québec]

Thank you.

There could be further debate on potential savings. Several experts have put forward different figures regarding the issue of a single tax return, whether the return is managed at the federal or provincial level. However, the whole debate on the jobs that would be eliminated if a single tax return were adopted in Quebec is evidence that all stakeholders recognize some form of duplication in the current system. This inherent duplication in the system is the focus of the debate on the single tax return.

The question remains as to whether the federal or provincial level should handle the single tax return. Of course, we would like the provincial government to handle it. Over time, the Canadian provinces have relinquished these powers. In doing so, they've made financial gains, according to Mr. Brière. However, they've also paid a heavy price in terms of fiscal autonomy. Clearly, Quebec isn't prepared to pay that price.

It seems clear that a single tax return would save money and would make life easier for Quebec taxpayers. However, this return could only be managed by Quebec. Moreover, it would generate substantial savings.

If all the stakeholders act in good faith and everyone pulls their weight, the institutional arrangements, which the provinces have made with the federal government in the past, can easily be made the other way around.

[The Chair, Liberal, Wayne Easter]

Okay, Ted, if you have a quick final question....

[Ted Falk, Conservative, Provencher, MB]

I'll let others ask, Wayne. I think I have exceeded my time.

Thanks.

[The Chair, Liberal, Wayne Easter]

Okay.

Ms. Dzerowicz, you have five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Okay, great. Thank you.

Thanks to everyone for their presentations. This is a super interesting conversation.

My first question is for Ms. Daviau and Mr. Couillard.

I know that we've had quite a bit of conversation about job losses. We've talked quite a bit about the impact in Jonquière and Shawinigan, I think. I know that when we were talking to government officials last week, we heard that there would be job losses also in Sudbury and in P.E.I. Today I heard also of other cities, Vancouver, Edmonton—a whole slew of other cities. Do you have more specific numbers on the job losses outside of Quebec? If someone could elaborate on that, that would be appreciated.

[Debi Daviau]

I'm sorry but I don't have the numbers. I could probably put them together for you and have them sent out to the committee.

There are those other places because Canada Revenue Agency is a federal organization and more and more it's been trying to decentralize out of Ottawa—which is something that seems to be desirable to most representatives—and to make sure there's a federal government presence in communities right across this country. CRA is a big part of that. A lot of work that's done is done in a centre. For example, in Sudbury they might be processing a particular type of taxes for the whole country. That's why this bill will touch upon areas even outside of Quebec.

Perhaps Jean could comment further on some specifics regarding where he sees impact as he's actually there doing the work. Again, we can run the numbers, at least of our members, who work on Quebec taxes in one way or another.

I'm sorry, but I just don't want to forget this. We represent not just auditors but also other professionals like IT folks, researchers and those in other categories that would be impacted by such a change.

[Julie Dzerowicz, Liberal, Davenport, ON]

Just before Mr. Couillard gets in, I want to be very specific. If this bill goes through, what other jobs and how many other jobs in other cities across Canada would actually be impacted, whether we're talking about auditors or those directly involved in taxes or about IT officials or managers? If you have some information today that can give us more specifics, that would be fantastic.