Mr. Speaker, I am pleased to take part in today's debate on Bill C-244, a private member's bill.
This bill was introduced by my colleague, the hon. member for Joliette, after the National Assembly of Quebec unanimously adopted a motion on May 15, 2018, calling on the federal government to allow the province of Quebec to administer a single tax return.
The purpose of the bill is to authorize the Minister of Finance to enter into an agreement with the government of a province so that it can collect the federal personal and corporation income taxes on behalf of the Government of Canada.
At first glance, the bill's intent is appealing. Not only is the idea of a single tax return appealing to those who have to file two returns, but a single tax return could also be more efficient for governments to administer and more cost-effective for taxpayers.
That is why we have tax collection agreements, or TCAs, between the federal government and the provincial and territorial governments. Under these agreements, the federal government collects and manages income taxes for all provinces and territories, with the exception of Quebec's personal and corporate taxes and Alberta's corporate taxes. Only affected taxpayers in these two provinces have to deal with two tax administrators.
As I mentioned, these taxpayers would find the idea of dealing with a single tax administrator appealing. The question is how we can deliver this in a way that results in a single administrator and administrative efficiencies like those provided by existing TCAs.
Canadians expect their government to administer programs in a fair, efficient and cost-effective manner. To that end, Bill C-224 deserves to be carefully considered.
One consideration is the fact that Bill C-224 would likely result in higher total costs for Canadian taxpayers. Existing TCAs produce cost savings for taxpayers because transferring the administration of several provinces and territories to a single tax administrator, namely the federal government, creates economies of scale and reduces the administrative cost to each taxpayer.
Going in the wrong direction, as proposed in Bill C-224, would have the opposite effect. The structure of tax administration costs is mainly dominated by investments in fixed costs for technology infrastructure. Having Quebec administer the federal income tax would not help reduce those fixed costs in the province, because they would still have to be covered by both the Canada Revenue Agency and Revenu Québec.
As the Premier of Quebec clearly indicated, his government would seek to be reimbursed for the cost of administering the federal income tax. However, at this point, it is difficult to estimate the overall cost impact on the federal government, because it would depend on the scope of the tax programs transferred to the provincial government and the outcome of negotiations on various issues.
Bill C-224 would also make tax administration less consistent across the country, which would reduce the CRA's ability to respond quickly and effectively to major logistical challenges at the national level, such as rolling out the emergency measures needed to support Canadians during a crisis like the COVID-19 pandemic.
The bill would also be detrimental to Canada Revenue Agency employees who work in and outside Quebec. In Quebec, the 14 provincial CRA offices employ from 4,800 to 5,500 people, depending on the time of year, for example during the busy tax season, and about 60% of these employees are women. Changing their employment status, which would be inevitable with Bill C-224, would have consequences for them personally and for their communities.
Furthermore, this bill would require mitigation measures for employment taxes, and those costs could be quite high.
Bill C-224 could also impact Canada's ability to fulfill its obligations under existing international tax agreements and conventions that identify the Minister of National Revenue as Canada's competent authority. Our international partners may not be willing to modify those agreements or mesh their operations with two or more distinct tax authorities.
Canada has over 100 such tax agreements, and renegotiating them could take years and require considerable resources. In addition, if Canada no longer had access to provincial citizens' tax information, that would hinder its ability to fight international tax fraud, which is an important priority for our government and for Canadians.
The bill could also open the door to similar action on the part of other provinces, which might be quite interested in the proposed model if the federal government had to cover the provincial costs of administering federal taxes. That would result in similar challenges on a larger scale and increase the administrative cost per taxpayer.
In conclusion, Canadians expect us to take into account all these important considerations. Our government is open to improving tax administration in Quebec to ensure the best possible results for Canadians in terms of fairness, efficiency and value for taxpayers and governments, including those of Quebec.
We will continue to work with Revenu Québec, with which we have collaborated for a long time, 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 will make it easier to complete Quebec taxpayers' tax returns. We are always willing to improve the situation.