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Improving the tax system and stimulating economic growth in Quebec: The CPA Order sets out seven proposals

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Montreal, March 9, 2016 – As Quebec Finance Minister Carlos Leitão is about to table his 2016-2017 budget, the Quebec CPA Order has put forth seven proposals that call on the government to show vision and leadership. Recently presented as part of the pre-budget consultations, each proposal is guided by the principles of good governance, transparency, effectiveness and efficiency.

“Although controlling expenditures has dominated the agenda for the past two years, the forthcoming return to a balanced budget provides Quebec with an opportunity to innovate and make a long-awaited shift towards modernizing the tax system,” said Geneviève Mottard, CPA, CA, President and Chief Executive Officer of the Quebec CPA Order.

Of the seven proposals, the boldest calls for the gradual adoption of a structurally balanced and sustainable budget. Given the ups and downs of the economy, the CPA Order believes that planning Quebec’s fiscal policy over a ten-year period is likely the best guarantee of good governance. In its opinion, this approach would ensure that public funds are managed responsibly, which is the only way to achieve long-term fiscal balance.

For the Order, this approach goes hand in hand with a regular and systematic assessment of the effectiveness of corporate and personal tax measures. A thorough goal-oriented results analysis would enable the government to save while optimizing the impact and economic spin-offs of government actions.

Beyond seeking greater tax efficiency, the CPA Order believes it is also crucial to rethink the tax system so that it becomes a veritable growth engine for Quebec. In this regard, the government must continue assessing the Godbout Report and quickly propose a clear and coherent roadmap for implementing its recommendations, especially in terms of rebalancing income and commodity taxes.

According to the Order, the government will also have to begin a tax simplification process, for example by implementing a single tax return for individuals and businesses, as is already the case in almost all other provinces, and by fully harmonizing sales taxes (GST and QST) through a harmonized sales tax (HST). In addition to having positive effects on taxpayers, this administrative streamlining would result in significant efficiencies for the government, estimated at over $500 million per year.

The CPA Order points out that the Quebec government has already done a commendable job in separating “bad debt” from investments in assets. However, the Order believes that this exercise in transparency should be taken one step further by breaking down the debt by sector, thereby showing what proportion each of the government’s functions (health, education, family, transportation, etc.) has contributed or is contributing to the social debt. By doing so, Quebecers will be well equipped to engage in an informed public debate on this important issue.

“The CPA Order will pay particular attention to whether its message is reflected in the upcoming budget, which will hopefully mark a shift in terms of introducing tax reform and stimulating economic growth,” said Mottard.


Seven proposals for modernizing the tax system and stimulating economic growth


  1. ADOPTING A STRUCTURALLY BALANCED AND SUSTAINABLE BUDGET TO PROTECT QUEBEC AGAINST THE UNPREDICTABLE UPS AND DOWNS OF THE GLOBAL ECONOMY 
  2. ASSESSING THE EFFECTIVENESS OF TAX MEASURES BASED ON THE OBJECTIVE SET AT THE TIME OF IMPLEMENTATION 
  3. RETHINKING THE TAX SYSTEM BY QUICKLY PROPOSING A CLEAR AND COHERENT ROADMAP FOR IMPLEMENTING THE RECOMMENDATIONS IN THE GODBOUT REPORT 
  4. IMPLEMENTING A SINGLE TAX RETURN FOR INDIVIDUALS AND BUSINESSES 
  5. HARMONIZING SALES TAXES (GST AND QST) AND INTRODUCING A REAL HARMONIZED SALES TAX (HST) 
  6. BREAKING DOWN QUEBEC’S PUBLIC DEBT BY SECTOR TO ENSURE GREATER TRANSPARENCY AND A MORE INFORMED PUBLIC DEBATE 
  7. ENSURE THAT THE AUDITED FINANCIAL STATEMENTS OF PUBLIC AND PARAPUBLIC AGENCIES ARE PUBLISHED IN AN ACCESSIBLE FORMAT NO LATER THAN SIX MONTHS AFTER THE END OF THE FISCAL YEAR

Read the Order’s brief [+]


About the Quebec CPA Order

The Ordre des comptables professionnels agréés du Québec has 38,000 members and 5,600 future CPAs, making it the third largest professional order in Quebec. The Order ensures the protection of the public and the visibility of the profession. It represents all areas of expertise of the accounting profession, including assurance, financial accounting, management and management accounting, finance and taxation.

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Information:

Jean-Louis Laplante
Manager, Public Affairs
Quebec CPA Order
T. 514 288.3256, ext. 3024  1 800 363.4688
jllaplante@cpaquebec.ca


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