Revenu Québec is hiring students and jobs pay more than minimum wage
Here’s how we got here and what current political leaders have to say about finally making it easier for Quebecers.
What is the root of the dual tax system?
Premier Maurice Duplessis is credited with defining Quebec’s fiscal autonomy.
There was a time when Quebec let the federal government have more control over taxation. In 1942, the province suspended its own collection of income and corporate taxes, a “temporary” measure that Premier Adélard Godbout said would allow the federal government to increase its revenue during World War II.
Duplessis campaigned for greater provincial taxing powers after the war.
He told participants at the 1950 Federal-Provincial Conference on the Constitution that “provincial autonomy cannot exist without definite and indispensable fiscal powers.”
“It is pointless,” he said, “to have a bill of rights if, at the same time, there is no financial and fiscal power to exercise those rights.”
In a provincial government document, Duplessis reportedly told the 1955 meeting of the conference that by reserving the power of taxation, the federal government was “[reducing] the provinces to legislative impotence.
“In effect, a province that had no revenue other than federal grants would become a sort of inferior body.”
In 1954, the Duplessis government forced the hand of the federal government by restoring its own income tax to finance the programs under its jurisdiction. According to the provincial archives, the federal government finally agreed to reduce its income tax to accommodate that of Quebec.
What is Quebec’s argument for controlling taxes and revenues?
The provincial and federal governments seem to be treating this issue as a zero-sum game: the province should either cede tax control or acquire additional collection powers.
The provincial government, of course, wants only one tax return to go through Revenu Québec instead of the CRA.
Quebec generally pushes for more fiscal control, arguing that the costs of programs under provincial jurisdiction are rising faster than its revenues, while the federal government benefits from the opposite situation: its revenues are rising faster than the cost of carrying out its powers.
The province claims that the federal government uses the advantage of its spending power to stick its nose in provincial affairs through transfers and other programs.
In a submission to a 2015 commission on government efficiency, the Department of Finance also pointed to the administrative benefits of maintaining Quebec revenue controls. According to a report summarizing the commission’s findings, the government argued that internal revenue tracking allowed the department “to have continuous access” to tax information and to respond quickly to financial needs and policy changes.
The dual system is expensive
This same commission found that Quebec could save up to $392 million if it had recourse to the CRA.
Revenu Québec responded, the commission says in its report, by saying that such a transfer of responsibilities “would deprive Quebec of revenues totaling $696 million in the fight against tax evasion,” also currently under its jurisdiction.
The commission, however, suspected that since the federal government would likely take over the province’s tax evasion investigations, such a “loss of revenue” would be “unlikely.”
The report did not acknowledge taxpayers’ irritation with the double-filing system, but said businesses could incur additional costs – albeit limited and, in public discourse, perhaps be exaggerated – as a result of the configuration.
The responsible commission concluded that Quebec should “seriously consider” consolidating taxation under the federal government.
Quebec is still campaigning for better control of your taxes
In May 2018, the National Assembly voted 102 votes to 0 in favor of a motion asking the two levels of government to “implement a single tax declaration, transmitted to Revenu Québec, for all Québec taxpayers, while preserving the fiscal autonomy of Québec”.
Since the election of the CAQ government in October 2018, Premier François Legault has repeatedly asked the federal government to give the province greater taxing power and, thus, to create a single tax return.
He pushed party leaders, and Prime Minister Justin Trudeau in particular, on the issue ahead of the 2019 federal election, saying “there would be significant savings to be had by having a single tax return, savings for governments but also a facility for individuals and businesses.”
The “implementation of a single tax return managed by the Government of Quebec” ended up being one of the four major government priorities for the new federal government.
The Liberal government is clutching its purse
In January 2019, Jean-Yves Duclos, then federal Minister of Families, Children and Social Development, citing what he suggested was the need for a national service standard, reportedly said the party “would not compromise ” On the question.
In response to a February 2019 motion from a Conservative MP calling on the Liberal government to “work with” Quebec to create a single return, National Revenue Minister Diane Lebouthillier asked the opposition to consider “more than 5 500 employees of the Canada Revenue Agency” working in Quebec who would be out of work if the province took over the tax responsibilities of the federal government.
The Public Service Alliance of Canada, a union of public servants, echoed Lebouthillier’s concern.
(The NDP, for its part, was in favor of a single tax return for Quebecers as long as it did not lead to “a loss of employment for Quebec workers in regions like Mauricie and Saguenay-Lac -Saint-Jean,” Montreal MP Alexandre dit Boulerice said in 2019).
In 2022, with the Legault and Trudeau governments still deadlocked, Quebecers shouldn’t expect a single tax return anytime soon.