Summary#
This bill lets the federal Minister of Finance sign agreements so a province can collect federal personal and corporate income taxes and send the money to the Government of Canada. It also tells the Minister to begin talks with Quebec within 90 days of the law taking effect, aiming to reach such an agreement within one year (Preamble; Bill s.20.1(1); Quebec clause). The bill adds safeguards on jobs and on access to tax information from foreign authorities (Bill s.20.1(3)-(4)).
- Allows any province to collect federal personal and corporate income taxes under a formal agreement with terms and conditions (Bill s.20.1(1)-(2)).
- Requires job-impact mitigation measures in any agreement (Bill s.20.1(3)).
- Requires the Minister to negotiate with foreign tax authorities to adjust treaties so a province can access needed tax information directly (Bill s.20.1(4)).
- Directs the Minister to start talks with Quebec within 90 days and aim to conclude an agreement within one year (Quebec clause).
- Does not change federal tax rates, credits, or who owes tax; it changes who administers and collects it (Bill s.20.1).
What it means for you#
- Households (Quebec)
- You would file a single income tax return with Revenu Québec instead of separate federal and provincial returns, but only after an agreement is signed and implemented (Preamble; Bill s.20.1(1)).
- Until an agreement takes effect, nothing changes.
- Businesses (Quebec)
- You could file one corporate income tax return to Revenu Québec, which would also cover federal corporate income tax, if an agreement is reached (Bill s.20.1(1)).
- Audit, appeals, and payment processes would be set by the agreement’s terms. Details are not in the bill (Bill s.20.1(1)-(2)).
- Employers and payroll administrators (Quebec)
- If an agreement is implemented, you would remit income tax withholdings to Revenu Québec instead of the Canada Revenue Agency (CRA). Timing and formats would depend on the agreement (Bill s.20.1(1)).
- Workers at CRA and Revenu Québec
- The agreement must include measures to reduce negative job impacts on affected workers (e.g., reassignment, retraining). Exact measures are not specified (Bill s.20.1(3)).
- People outside Quebec
- No change unless your province later signs a similar agreement. The bill allows it but does not require talks with other provinces (Bill s.20.1(1)).
- Taxpayers with cross‑border income
- The Minister must seek changes to tax treaties and information‑sharing deals so a province can receive needed foreign tax information directly (Bill s.20.1(4)).
- There may be a transition period before foreign partners agree to changes. During that time, filing may remain under current processes. Data unavailable.
Expenses#
Estimated net cost: Data unavailable.
- Official fiscal note: Data unavailable.
- Direct appropriations in the bill: None identified.
- Mandated actions that may have costs:
- Start discussions with Quebec within 90 days; aim to conclude within one year (Quebec clause).
- Negotiate amendments with foreign tax authorities to enable provincial access to tax information (Bill s.20.1(4)).
- Include employment mitigation measures in any agreement (Bill s.20.1(3)).
- Federal revenue timing:
- Provinces would collect and then make payments to Canada “in accordance with such terms and conditions as the agreement prescribes,” so cash‑flow timing would depend on the agreement (Bill s.20.1(1)).
- Federal or provincial administrative savings or transition costs: Data unavailable.
Proponents' View#
- Reduces paperwork for Quebec residents by moving to a single personal tax return, as recognized in the bill’s preamble (Preamble).
- Cuts duplicate administration by consolidating filing, audits, and collections under one authority in Quebec; potential efficiency gains assumed but not quantified (Bill s.20.1(1)-(2)). Assumption noted.
- Maintains federal control over tax policy, since only collection shifts; agreements cover terms, payments, and conditions (Bill s.20.1(1)-(2)).
- Protects workers by requiring job‑impact mitigation measures in any agreement (Bill s.20.1(3)).
- Addresses confidentiality and access barriers by directing treaty and information‑sharing updates so provinces can receive needed foreign tax data (Bill s.20.1(4)).
Opponents' View#
- Complex and lengthy treaty work: renegotiating multiple international tax agreements could take years, delaying a single return and creating uncertainty (Bill s.20.1(4)). Assumption about timelines noted.
- Implementation risk: integrating federal and provincial systems could be costly and disruptive; no cost estimates are provided (Data unavailable).
- Revenue and compliance risk: Canada would rely on a province to remit federal revenues on time; details depend on the agreement’s terms (Bill s.20.1(1)). Assumption about risk noted.
- Employment impacts: despite mitigation requirements, CRA positions in affected locations could change or move; specifics are not defined (Bill s.20.1(3)).
- Fragmentation risk: if other provinces seek similar deals, businesses operating in multiple provinces could face different administrative regimes, adding complexity (Bill s.20.1(1)). Assumption noted.