Mr. Speaker, we acknowledge at the outset of this debate that the intent of the proposed legislation is appealing. It is only when we look at what it would mean in practice that its problems become apparent. These problems are significant: higher costs for taxpayers; inconsistent administration across jurisdictions; less capacity to move quickly, efficiently and effectively to support Canadians through emergencies like COVID-19; the need to renegotiate existing international tax treaties and agreements; employment disruptions; and job losses.
These adverse impacts may not have been taken into consideration when Quebec's National Assembly passed its motion back in May of 2018 calling on the federal government to allow the Province of Quebec to administer a single tax return. They also may not have been taken into account when Bill C-224 was drafted. However, it is our duty and obligation as representatives of Canadians to take them into account now. Canadians rightfully expect their governments to administer taxes and deliver programs in a fair, efficient and cost-effective manner. It is in this regard that Bill C-224 falls well short of this intent.
Let us take a moment to revisit these shortcomings. First and foremost, Bill C-224 would likely entail higher overall costs for Canadian taxpayers. That is because the Government of Canada collects and administers not only federal income taxes, but also income taxes of all the provinces and territories, except for corporate income tax in Alberta and personal and corporate income taxes in Quebec. This results in savings for taxpayers because a single tax administrator at the national level creates efficiencies and economies of scale that lower overall taxpayer administration costs. If a province were to assume responsibility for the collection and administration of federal income taxes, these efficiencies would be reduced, increasing costs to taxpayers.
Moving in the opposite direction and creating an additional layer of tax administration, as proposed in Bill C-224, would have the opposite effect. It would create inefficiencies, decrease economies of scale and increase overall per-taxpayer administration costs. It is an unavoidable fact that the cost of tax administration is driven by fixed investments in the technology and office space needed to administer taxes, and the administration of federal income tax by the Province of Quebec would not help lower these fixed costs in the province. Rather, these fixed costs would have to be incurred instead by both CRA and Revenu Québec.
Canadians would be right to ask who would pay for the increased costs that could arise from such duplication in investment and administration, and the Premier of Quebec has at least been forthright in providing the answer for them: the Government of Canada. The Premier of Quebec has made it clear that his government would seek reimbursement for costs associated with the administration of federal income taxes. Canadians may be curious about how much this will cost them, but in this respect, we have seen no proposed cost implications. Determining what the additional costs would be depends on the scope and scale of the tax programs transferred to Quebec and the outcome of the negotiations between governments.
However, based on experience of when the administration of sales tax was transferred from the Ontario government to the federal government following the harmonization of the GST and PST, and given the much greater scale of this change, it would be expected that the transition costs alone would be at least $800 million, and likely more than this. This does not include increased costs from the loss of economies of scale for CRA or the costs associated with the renegotiation of our international agreements, even if our international partners were willing to entertain such negotiations.
What we do know for sure is that Bill C-224, by effectively creating a separate tax administrator for federal taxes in Quebec, would reduce the consistency of tax administration nationally. Doing so would impair CRA's administrative capacity, and therefore the federal government's ability, to deliver timely and effective support to Canadians in the face of sudden national challenges and emergencies, as we have seen in the case of the COVID-19 global pandemic.
Bill C-224 would hobble our efforts at supporting Canadians not only nationally, but indeed internationally. Canada has over 100 international tax treaties and agreements that protect Canadians against double taxation and assist in addressing international tax evasion and avoidance. These treaties and agreements specify the Minister of National Revenue as Canada's competent authority, and we have no sense that our international partners would be interested in changing this arrangement. In fact, it is entirely possible that they may not want to interact with two or more separate tax administrations in their many treaties and agreements with Canada. The renegotiation of these treaties and agreements could take years and expend significant financial resources that could be put to better use at a time when we are confronted with challenges like the immense ones posed by COVID-19.
Bill C-224 would also introduce new complexities and costs related to the administration of federal benefits and programs, including the Canada child benefit, the Canada pension plan and employment insurance, given the significant links between these programs and the administration of personal income tax.
Last but not least, the bill could have a negative impact on jobs in communities that depend on them. There are currently between 4,800 and 5,500 CRA employees in Quebec, depending on the time of year, serving at 14 offices throughout the province. Around 60% of them are women. There are also many CRA employees working outside of Quebec who work on federal taxes for Quebec residents. Bill C-224 would inevitably change some of their employment situations. The impacts this carries with it are not just at the personal level, but also at the family and community levels.
While Bill C-224 would require the Government of Canada to carry these costs, it provides no detail or accounting in terms of their skill, which could be significant. Such an open-ended deal could lead to similar demands from other provinces seeking federal funding for the creation of their own tax administrative systems, leading to an inefficient patchwork of separate tax administration programs across Canada. This would lead to challenges similar to those I have just outlined but on a wider scale, with even higher per-taxpayer administration costs.
As I said at the outset, Canadians rightfully expect their governments to administer taxes and deliver programs in a fair, efficient and cost-effective manner. For all the reasons I have outlined today, Bill C-224 falls well short of this goal. Rather than lowering costs for taxpayers and supporting further efficiencies, it would take us in the opposite direction. That is why our government cannot support Bill C-224.
While we remain open to improving tax administration in Quebec, we can do this while maintaining Canada's role as the administrator of the federal income taxes in Quebec. We will continue to work together with Revenu Québec, with which we have a long-standing collaborative relationship, to find ways of streamlining the filing of taxes to ensure better harmonization of our respective tax administrations and make filing easier for Quebec taxpayers.
We are always open to making things better. However, for the reasons I have outlined today, Bill C-224 does not deliver on this front.