Taxation and government program review: Quebec at a turning point

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Montreal, September 3, 2015 – “Quebec’s tax reform and program review provide a rare opportunity that should be used to get to the bottom of things, and to dare examine our ways of doing things and the policies we thought were untouchable.”

Such is the challenge issued by the Quebec CPA Order to the Committee on Public Finance, which is looking at the report of the Quebec Taxation Review Committee (the Godbout Report) just as the Robillard Commission released its second report earlier this week.

The Godbout Report: a springboard for further action

The Chair of the Order, Alain Dugal, FCPA, FCA, fully agrees with the major principles underlying the proposed tax reform, including reducing the income tax burden by raising user fees and taxes, and enhancing the social safety net to protect those most in need. Mr. Dugal reiterated his proposal in favour of a single tax return, which he has been advocating for a year. “As proposed by Minister Coiteux, we must consider this option thoroughly, while keeping Quebec’s fiscal autonomy intact and its best economic interest in mind. So many times in the past, Quebec has shown its capacity for creativity and innovation, and I’m convinced that we will once again find a formula that serves the higher interest of all Quebecers, whether it is administered by Revenu Québec or the Canada Revenue Agency.”

Permanent and transparent review mechanisms

The CPA Order also renewed its call for the implementation of permanent review mechanisms for both fiscal policies and government programs. As proposed by the Robillard Commission, the Order believes that Quebec must establish a permanent review process backed by the highest levels of government and whose success would depend in part on being tied to budget objectives. This approach aligns perfectly with the very principles of a structurally balanced and sustainable budget, a concept the Order is ardently advocating to government authorities. “Transparency and accountability are without a doubt the most efficient controls we have to maintain public confidence in the management of the state and ensure the survival and performance of government services,” said Mr. Dugal. “We mustn’t wait for another crisis in public finance to question how we do things and make these objectives a priority.”

Other priorities

The Order took advantage of its appearance before the parliamentary commission to insist that the reform proposed by the Godbout Commission should be considered as a whole. “The commission has put forth a holistic reform that is consistent and balanced. At the risk of distorting the intent and letter of the report, the reform is not something we can take apart to retain only those parts that suit us at the moment,” added the President and Chief Executive Officer of the Order, Daniel McMahon, FCPA, FCA.

The CPA Order sees the Godbout Report as the starting point for further reflection, a process that should lead us to minimize the number of tax credits and exemptions that make the tax system so complex. As such, we should make simplifying the tax system for seniors a priority. Daunted by no fewer than 30 measures, seniors all too often do not take advantage of the benefits that are normally available to them. The CPA Order therefore recommends reducing tax expenditures for seniors and instead introducing a formula similar to the Guaranteed Income Supplement, which would vary based on the taxpayer’s income.

Lastly, the major overhaul undertaken by the Quebec government should also be an opportunity to reopen discussions with the federal government with a view to actually harmonizing the GST and QST by transitioning to the HST. This would enable Quebec to generate significant savings and reduce the administrative burden placed on businesses, without reducing its tax revenues and while keeping its taxation powers intact.

About the Quebec CPA Order

The Ordre des comptables professionnels agréés du Québec has 37,000 members and 6,000 future CPAs. 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.

Read the brief submitted by the Order to the Committee on Public Finance (in French) [+] 

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Ginette Bourbonnais
Strategic Advisor, Public Affairs and Communications
Quebec CPA Order
T. 514 288.3256 [3022] 1 800 363.4688

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