Quebec Single Tax Return: Don't be fooled by the Conservatives

August 12, 2019

BACKGROUND

  • Quebec is the only province in Canada to collect its income taxes in its jurisdiction from individuals instead of having them collected by the federal government and then remitted to it. This means that Quebeckers and Quebec companies must file two tax returns, one with the federal government and another with the province.

THE CONSERVATIVES’ DUBIOUS OFFER

What is the Conservatives’ dubious offer?

  • With the federal elections coming up, the Conservatives have promised to create a single tax return in Quebec and to entrust Revenu Québec with administering it, if they form the next government.

Why is this offer dubious?

  • The Conservatives are lying to Quebeckers and trying to buy their votes by telling them that they are offering to do the same thing for them as in the other provinces and by tempting them with false savings of hundreds of millions of dollars per year through the creation of a single tax return in Quebec administered by Revenu Québec. In addition, the Conservatives claim that no jobs would be lost.

What are the Conservatives’ lies?

  • The Conservatives say they want to treat Quebeckers the same way as other Canadians by enabling them to fill out a single tax return. Would that be the case? NO.
    THE TRUTH:
    In the rest of the country, it's the Canada Revenue Agency (CRA) that administers taxes for the federal government AND for the province, not the other way around.
     
  • Savings for the Quebec government: the Conservatives claim that the Government of Quebec would save hundreds of millions of dollars per year if Revenu Québec were to administer a single tax return. Is this true? Not at all!
    THE TRUTH:

    This statement is not backed by any studies. In fact, the only study on the matter states the exact opposite. Indeed, in its report published in June 2015, the Commission de révision permanente des programmes, better known as the Robillard Commission, concluded that transferring the tax administration activities from Revenu Québec to the Canada Revenue Agency would result in direct annual savings of approximately $400 million for the Quebec government. Moreover, the Commission’s main recommendation was that the Government of Quebec should seriously consider the option of transferring the tax administration activities to the federal government.

    For more information, see the full report by the Robillard Commission
    [in French]:
    https://www.tresor.gouv.qc.ca/fileadmin/PDF/revision_programmes/rapport_...
     

  • The Conservatives state that their proposal will not result in any job losses, claiming that the 4,000 members of the Union of Taxation Employees (UTE) working for the CRA in Quebec who would lose their current jobs, could simply be reassigned to audit functions to fight tax evasion. Is this realistic? Unfortunately not!
    THE TRUTH:
    This makes no sense because working at the CRA as an auditor specializing in fighting tax evasion requires a university bachelor’s degree and successfully completed a number of taxation courses. In addition, you must have acquired the necessary experience after several years of working in audit at the CRA, before being able to hold a position specializing in fighting tax evasion. The majority of our members do not perform audit functions and do not have the same training as required for audit. It’s ridiculous to believe, and even more so to claim, that a Conservative government would let these people go back to school full time for several years while continuing to pay their salaries, at the taxpayers’ expense! In any case, there’s no reasonable chance of 4,000 new audit  positions being created.

    Moreover, François Legault, Premier of Quebec, acknowledges at the outset that his plan to introduce a single tax return managed by Quebec would result in many lost jobs in the province.
    [in French]
    https://www.ledevoir.com/politique/canada/545711/declaration-de-revenus-...

    The Liberals, including François-Philippe Champagne, Member of Parliament for Shawinigan, cite these many jobs to justify their opposition to the single tax return.

    The NPD also abandoned the idea of a single tax return for the same reasons.
    [in French]
    https://www.ledevoir.com/politique/canada/546272/des-deputes-federaux-ma...

What are the consequences of this offer for Quebeckers?

  • 5,500 jobs abolished
    The truth is that
    , if the Conservatives win the next federal election, their proposal would eliminate 5,500 Canada Revenue Agency (CRA) jobs throughout the province, including 1,200 in the Saguenay-Lac-Saint-Jean region and 1,500 in Mauricie.
     
  • $300 million in payroll wages lost
    The truth is that the Conservatives’ proposal would result in the loss of over $300 million in payroll wages in a number of Quebec regions. The loss is estimated at roughly $75 million in Mauricie and $50 million in Saguenay-Lac-Saint-Jean. With such amounts no longer being reinvested in the local economy of these regions by the federal government, local merchants would be hard hit and it would definitely result in further major job losses. It would be a real catastrophe for Quebec as a whole and especially in the regions that are far removed from major centres.

The consequences of a Quebec Single Tax Return for the rest of the country

  • In addition to the direct loss of 5,500 positions at the Canada Revenue Agency (CRA) in Quebec, the fact that 8 million Quebecers would no longer need to do business with the CRA would also affect jobs at the Agency elsewhere in the country. Indeed, the decision to move to a single tax return in Quebec would have significant and far-reaching consequences nationally, including the loss of countless jobs:
    • at the Calgary and Hamilton Individual Call Centres
    • at the Business Window Call Centres in Saint John, Toronto and Edmonton
    • in processing of Quebec tax returns at the Winnipeg and Sudbury Taxation Centres
    • in collections workloads across the country as this work is national in nature thus the loss of Quebec Taxpayer files will affect the workers who perform these duties.

Why are the Conservatives making this offer to Quebeckers?

  • It’s simple. The Conservatives are making this proposal in order to charm Quebeckers for the sole purpose of getting their votes in the next federal election.

AN UNREALISTIC PROPOSAL

  • The Conservatives’ proposal of creating a single tax return in Quebec administered by Revenu Québec is not realistic because the project will not come about in the short or medium term. In fact, the negotiations between the two levels of government would take many years and would be very complex due to the many tax policy differences between the two levels of government.

THIS IS NOT THE SOLUTION

  • Creating a single tax return would not be the solution, according to Quebec tax experts, who met in May at the Longueuil campus of the Université de Sherbrooke. According to those experts, this solution is not applicable.

  • Lyne Latulippe, a professor and senior researcher with the Chair in Taxation, says that Ottawa is right to state that international practices would prevent Quebec from being able to do a part of the federal government’s work in this area. The result of bilateral agreements negotiated solely between the central governments, cooperation agreements on, among other things, combating tax evasion do not usually allow the data to be shared with other levels of government. [TRANSLATION] "It would be necessary to re-open the agreements and obtain the approval of other countries."

  • In any case, the real problem does not lie there.

    The bulk of the additional costs of tax compliance in Quebec doesn’t arise from a redundancy issue, insisted François Vaillancourt. It comes from the tax policy differences between the two levels of government. [TRANSLATION] “As long as we have to comply with two different sets of legislation, we cannot hope to achieve such huge savings.”

    The experts therefore suggest that Quebec and Ottawa harmonize their tax policies before thinking about creating a single tax return.

  • According to those experts, if the aim were solely to reduce redundancies and achieve efficiencies, it would be more logical to entrust the work to the agency that is most capable of achieving large-scale savings, namely the CRA.
    [in French]
    https://www.ledevoir.com/economie/553768/fiscalite-la-declaration-de-rev...

IN CONCLUSION

  • The Union of Taxation Employees has nothing against the political choice made by Quebeckers. We hope that the federal government and the Quebec government talk together to find a solution to simplify the lives of taxpayers and companies operating in Quebec instead of slashing thousands of jobs at both the Canada Revenue Agency and the Agence du revenu du Québec.
  • The Union of Taxation Employees is open to the introduction of a single tax return for Quebec. However, if we truly want to help Quebeckers by simplifying their lives while saving them nearly $400 million per year, it’s obvious that a single tax return in Quebec should be administered by the federal government. In fact, the Robillard Commission report published in 2015 by the Government of Quebec recommended that all of the provinces' taxes be administered by the federal government.

THE CANADA REVENUE AGENCY IN QUEBEC

  • The CRA’s Tax Services Offices (TSO) in Quebec are located in Brossard, Chicoutimi, Gatineau, Laval, Montreal, Quebec City, Rimouski, Rouyn-Noranda, Sherbrooke and Trois-Rivieres. The CRA also has a National Verification and Collections Centre (NVCC) in Shawinigan, a Tax Centre in Jonquiere and a regional office in Montreal.

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