Progress Made In Quebec Sales Tax Talks

by Robert Lee, Tax-News.com, London

16 September 2011

Quebec and Canada are working to hammer out a deal on sales tax harmonisation in the province, with both sides confident that talks will lead to an agreement.

According to both federal Finance Minister Jim Flaherty and his Quebec counterpart Raymond Bachand, significant progress has been made in talks between officials from their respective departments. The two parties have agreed to continue their discussions over the coming days, with the aim of securing an agreement by the end of the month.

Revenu Quebec currently administers the province’s sales tax regime, which consists of the Quebec Sales Tax (QST) and the goods and services tax (GST). Flaherty’s June Budget made provision for CAD2.2bn in “support of the conclusion of a satisfactory agreement between Canada and Quebec on sales tax harmonisation”.

Compensation was offered to Ontario and British Columbia for the costs incurred during their transition to a harmonised sales tax system. British Columbia’s impending reversion to a provincial sales tax/GST regime, as decided in a recent referendum, will see the province reimburse the federal government to the tune of CAD1.6bn.

Flaherty said of the Quebec developments, "The talks between representatives of our two governments are going well and we are making headway toward harmonising the Quebec sales tax. We have made a lot of progress and plan to keep working on this issue with an eye to concluding an agreement as soon as possible between the Governments of Canada and Quebec."

Bachand added, "Both our governments have spent a great deal of time and energy on reaching an agreement in this file. I am confident that continued talks will quickly lead to an agreement."

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