Summary#

This bill lets the federal Minister of Finance make agreements with provinces so a province can collect federal personal and corporate income taxes and then send the money to Canada. It directs the Minister to start talks with Quebec within 90 days of the law taking effect and to work toward an agreement within one year. It also requires steps to reduce job impacts on affected workers and directs the Minister to seek changes to international tax treaties so a province can get needed tax information directly (Bill, s. 20.1(1)–(4); Quebec clause).

• Allows a province to administer and collect federal income taxes, with terms set in a future agreement approved by the Governor in Council (federal Cabinet) (Bill, s. 20.1(1)–(2)).
• Requires measures to mitigate effects on employees affected by the change (Bill, s. 20.1(3)).
• Instructs the Minister to seek amendments to tax treaties so a province can access necessary foreign tax information directly (Bill, s. 20.1(4)).
• Directs the Minister to begin discussions with Quebec within 90 days and aim to reach an agreement within one year (Quebec clause).
• Does not itself create a single tax return; that would depend on a negotiated agreement’s details and timing (Bill, s. 20.1).

What it means for you#

• Households (Quebec)
  • If Quebec and Canada sign an agreement, you would file one personal income tax return with Quebec instead of separate federal and provincial returns. Timing depends on when an agreement is reached and implemented (Bill, s. 20.1; Quebec clause).
• Households (other provinces/territories)
  • No change unless your province later signs a similar agreement under this new authority (Bill, s. 20.1(1)).
• Workers (CRA and Revenu Québec)
  • Federal employees whose work would shift to the province could face job changes. Any agreement must include measures to lessen employment impacts, but the bill does not specify which measures (Bill, s. 20.1(3)).
  • Provincial tax staff in Quebec could see new duties if Quebec takes on federal tax collection (Bill, s. 20.1(1)).
• Businesses (Quebec)
  • If an agreement is signed, corporations could file a single corporate income tax return with Quebec covering both provincial and federal taxes. Details on forms, audits, and appeals would be set by the agreement (Bill, s. 20.1(1)).
• Multi‑province businesses and tax preparers
  • Administrative processes in Quebec could differ from the rest of Canada if Quebec administers federal taxes while other provinces continue under CRA. The bill leaves process details to the agreement (Bill, s. 20.1(1)–(2)).
• Cross‑border taxpayers
  • Access by Quebec to foreign tax information would depend on Canada negotiating changes with other countries to allow direct sharing with the province. Negotiations are required, but outcomes and timelines depend on foreign partners (Bill, s. 20.1(4)).

Expenses#

Estimated net cost: Data unavailable.

• No fiscal note identified. The bill authorizes agreements but sets no direct appropriations, tax rate changes, or fees (Bill, s. 20.1).
• Potential costs include:
  • Transition and IT integration for shifting administration to a province. Data unavailable.
  • Measures to mitigate worker impacts (e.g., retraining, relocation). Data unavailable.
  • Treaty negotiation and implementation costs. Data unavailable.
• Any savings from reduced duplication would depend on future agreement terms. Data unavailable.

Proponents' View#

• Simplifies filing for Quebec residents by enabling a single income tax return handled by the province, reducing paperwork and confusion (Preamble; Bill, s. 20.1(1)).
• Cuts administrative duplication between CRA and Revenu Québec, which could lower long‑term costs; savings would come from one set of forms, processing, and audits. Quantified estimates not provided in the bill (Bill, s. 20.1(1)–(2)).
• Respects Quebec’s stated preference to administer a single return; directs the federal government to engage quickly (Preamble; Quebec clause).
• Protects workers by requiring employment impact mitigation as a condition of any agreement (Bill, s. 20.1(3)).
• Maintains federal revenue by requiring the province to remit collected federal taxes under agreed terms (Bill, s. 20.1(1)–(2)).

Opponents' View#

• Implementation risk: Moving federal tax administration to a province is complex and could disrupt service during transition; the bill leaves key operational details to later agreements (Bill, s. 20.1(1)–(2)).
• International constraints: Access to foreign tax data requires amending many treaties or agreements; outcomes and timelines depend on other countries and are not guaranteed (Bill, s. 20.1(4)).
• Fiscal uncertainty: Transition, IT, and workforce measures could be costly; the bill provides no cost estimates or funding mechanism. Data unavailable (Bill, s. 20.1(3)).
• Administrative fragmentation: Different tax administration systems across provinces could increase compliance complexity for national firms and tax preparers, depending on future agreements (Bill, s. 20.1(1)).
• Workforce impact: Federal tax jobs in Quebec could be reduced or shifted; mitigation is required but unspecified, creating uncertainty for employees (Bill, s. 20.1(3)).