Quebec, the French Language, and Quebecois Identity

[Acajack]

Originally Posted by New Brisavoine

These cross-border tax regimes were negotiated by the governments themselves, between themselves. No intervention from the EU. The EU has very little power over taxation (the low tax countries like formerly UK, and now Ireland, have always opposed an increase of EU powers in the taxation area).

Especially since a lot of them involve Switzerland which is not even part of the EU.

[Acajack]

Originally Posted by New Brisavoine

How so? With such a tax regime, probably many workers from Ottawa would buy houses in Gatineau. Construction boom + property tax + sales tax (all these people would do their shopping locally in Gatineau) = lots of revenues for Québec.

Of course there'd be the issue of language, which is another issue altogether. CAQ and PQ would hardly accept 30% of Gatineau becoming Anglophones.

Just did some quick math and between 35 000 and 40 000 Gatineau residents work in Ottawa. If the income tax difference with Ontario averages out to 5000 CAD per worker per year, that means allowing Gatinois who work in Ottawa to pay Ontario tax rates would cost Quebec 200 000 000 CAD a year. That's a lot of money to make up in housing construction and property and sales taxes.

Not to mention that new residents means more spending on health care, schools, etc. I understand the principle of having to invest a dollar to make 2 dollars, but just pointing out that it wouldn't even be a net gain. There are lots of costs to population growth.

And of course there is the political aspect: how do you convince Québécois living elsewhere in the province or even Gatinois who work in Gatineau, that their fellow citizens deserve to pay 20% less taxes just because they work in Ottawa?

[New Brisavoine]

Originally Posted by Acajack

From what I can see in Switzerland-France, if you work in Switzerland but live in France, you need to pay your income taxes to France. They are deducted automatically by your Swiss employer and then a transfer is made to France on your behalf.

No, that's not how it works. I've never heard that Swiss employers send income taxes levied in Switzerland to the French authorities. That would be most bizarre.

I've had a look on a website dedicated to Geneva cross-border workers, and the way it works is this: in Geneva, as in Germany, and as in France now (since 2019), the income tax is directly deducted by the employer from the gross salary. So as a resident of France working in Geneva, your Geneva employer will deduct the GENEVA REPUBLIC income tax from your gross salary in Geneva, and wire you only your net salary. You then have to fill in an income tax file in France, BUT you can deduct from your income tax the income tax paid in Switzerland. And the magic of it is you can deduct if AS IF you had paid the French rate.

E.g.: suppose you earn $100,000 in Geneva. In Geneva you must pay $10,000 in income tax (I'm inventing). In France you would have had to pay $20,000 for the same salary. Your Geneva employer deducted the $10,000 which went into the coffers of the Republic of Geneva (and also partly the Helvetic Confederation I suppose). You got $90,000 in net salary. You fill in your French income tax, and last line: you must pay $20,000, BUT you have a $20,000 deductible (crédit d'impôt in French) from Geneva, therefore you must pay the French tax authority: $0.

For social security, you can either opt for the Swiss social security or for the French social security. If you opt for the Swiss social security, you get reimbursed by the French social security for health services in France (like seeing a doctor in France) AS IF you had contributed to the French social security.

[YOWetal]

Originally Posted by Acajack

Just did some quick math and between 35 000 and 40 000 Gatineau residents work in Ottawa. If the income tax difference with Ontario averages out to 5000 CAD per worker per year, that means allowing Gatinois who work in Ottawa to pay Ontario tax rates would cost Quebec 200 000 000 CAD a year. That's a lot of money to make up in housing construction and property and sales taxes.

Not to mention that new residents means more spending on health care, schools, etc. I understand the principle of having to invest a dollar to make 2 dollars, but just pointing out that it wouldn't even be a net gain. There are lots of costs to population growth.

And of course there is the political aspect: how do you convince Québécois living elsewhere in the province or even Gatinois who work in Gatineau, that their fellow citizens deserve to pay 20% less taxes just because they work in Ottawa?

Nevermind it would be impossible to get federal public servants to work at departments located in Gatineau for a 10% paycut. Thus it would quickly be more than 40 000. It woud even cause traffic issues as Ontario residents would take up promotions or new job opportunites in Quebec. It would be an issue for some other sectors too where there is already a pay differential. Teachers would have yet another incentive for example to work on the Ontario side though highly regulated professions would provide a barrier.
I know New York City has a city income tax to make up for all the commuters coming to work without paying taxes and Ottawa would consider that too if it wasn't mostly federal jobs. For sure if Toronto was next to Quebec there would be complaints.

[New Brisavoine]

Originally Posted by Acajack

Just did some quick math and between 35 000 and 40 000 Gatineau residents work in Ottawa. If the income tax difference with Ontario averages out to 5000 CAD per worker per year, that means allowing Gatinois who work in Ottawa to pay Ontario tax rates would cost Quebec 200 000 000 CAD a year. That's a lot of money to make up in housing construction and property and sales taxes.

Not to mention that new residents means more spending on health care, schools, etc. I understand the principle of having to invest a dollar to make 2 dollars, but just pointing out that it wouldn't even be a net gain. There are lots of costs to population growth.

That's where the federal government should step in. Isn't the federal government the one supposed to do its utmost to guarantee Canada's unity? Why have they never devised a system of compensation for provinces in order to make working across provincial borders a completely neutral thing? It seems really odd, as the said federal government is itself located right on a provincial border.

[Acajack]

Originally Posted by New Brisavoine

No, that's not how it works. I've never heard that Swiss employers send income taxes levied in Switzerland to the French authorities. That would be most bizarre.

I've had a look on a website dedicated to Geneva cross-border workers, and the way it works is this: in Geneva, as in Germany, and as in France now (since 2019), the income tax is directly deducted by the employer from the gross salary. So as a resident of France working in Geneva, your Geneva employer will deduct the GENEVA REPUBLIC income tax from your gross salary in Geneva, and wire you only your net salary. You then have to fill in an income tax file in France, BUT you can deduct from your income tax the income tax paid in Switzerland. And the magic of it is you can deduct if AS IF you had paid the French rate.

E.g.: suppose you earn $100,000 in Geneva. In Geneva you must pay $10,000 in income tax (I'm inventing). In France you would have had to pay $20,000 for the same salary. Your Geneva employer deducted the $10,000 which went into the coffers of the Republic of Geneva (and also partly the Helvetic Confederation I suppose). You got $90,000 in net salary. You fill in your French income tax, and last line: you must pay $20,000, BUT you have a $20,000 deductible (crédit d'impôt in French) from Geneva, therefore you must pay the French tax authority: $0.

For social security, you can either opt for the Swiss social security or for the French social security. If you opt for the Swiss social security, you get reimbursed by the French social security for health services in France (like seeing a doctor in France) AS IF you had contributed to the French social security.

Sorry, I made a mistake that muddied the waters.

We are saying basically the same thing.

If you're French but working in Geneva, you can pay the lower Swiss tax rates to France, and France will consider you've fully paid even if your taxes would be higher if you worked in France.

[Acajack]

Originally Posted by New Brisavoine

That's where the federal government should step in. Isn't the federal government the one supposed to do its utmost to guarantee Canada's unity? Why have they never devised a system of compensation for provinces in order to make working across provincial borders a completely neutral thing? It seems really odd, as the said federal government is itself located right on a provincial border.

It actually doesn't work that badly in practice. Since housing in Gatineau is consistently cheaper it roughly balances out for most people.

EDIT: And the Canadian government moves its staff around all the time between Ottawa and Gatineau without any restrictions as if it was a single city. Certainly there is no consideration given to taxation issues. The only main consideration in job location is the same one that exists everywhere in the world: how close it is to home.

[Acajack]

Even the market seems to have adjusted itself to this regional reality. For example, the average monthly rent for a small apartment in Gatineau is about 400 dollars less than in Ottawa.

400 x 12 = 4800, which in dollars is close to what the average income tax difference between Ontario and Quebec is.

[New Brisavoine]

Originally Posted by Acajack

And of course there is the political aspect: how do you convince Québécois living elsewhere in the province or even Gatinois who work in Gatineau, that their fellow citizens deserve to pay 20% less taxes just because they work in Ottawa?

France has always been a land of privileges, so the question is never asked here. Why do people from northern Moselle who work in Luxembourg pay less taxes than other French people? No one ever asks the question. I guess the underlying assumption is you can always move there at some point and enjoy the privilege too. I've long thought of moving to the French suburbs of Geneva actually, and may do it someday. Luxembourg is too boring and dull for me to think of moving there (although I know a woman in Normandy who earned 3,000 € a month for a state job, and who got an offer of 9,000 € a month for the exact same job in Luxembourg, so she happily moved there).

[Acajack]

Originally Posted by New Brisavoine

France has always been a land of privileges, so the question is never asked here. Why do people from northern Moselle who work in Luxembourg pay less taxes than other French people? No one ever asks the question. I guess the underlying assumption is you can always move there at some point and enjoy the privilege too. I've long thought of moving to the French suburbs of Geneva actually, and may do it someday. Luxembourg is too boring and dull for me to think of moving there (although I know a woman in Normandy who earned 3,000 € a month for a state job, and who got an offer of 9,000 € a month for the exact same job in Luxembourg, so she happily moved there).

Yeah well what little aristocracy we had was killed or decamped in the 1760s, and so we tend to be pretty egalitarian here.

[P'tit Renard]

Originally Posted by New Brisavoine

That's where the federal government should step in. Isn't the federal government the one supposed to do its utmost to guarantee Canada's unity? Why have they never devised a system of compensation for provinces in order to make working across provincial borders a completely neutral thing? It seems really odd, as the said federal government is itself located right on a provincial border.

Other than encouraging the provinces to come to the table to hash it out, there's nothing the feds can do.

We don't have a strong central government that Frances does, where power is all centralised in Paris.

[P'tit Renard]

Originally Posted by Acajack

Language is still at least part of it too. It always is in Quebec.

Maybe nominally, but filling Quebec's coffers and protecting the integrity of its taxation revenue is the primary goal.

[ToxiK]

Originally Posted by P'tit Renard

We don't have a strong central government that Frances does, where power is all centralised in Paris.

Good !

[New Brisavoine]

^^France is far less centralized than most people imagine. And federal countries don't have tax issues as crazy as explained here. In Germany, federal country par excellence, if you move from Berlin to Potsdam in Brandenburg, neighbors are not going to denounce you to the authorities if you have a Berlin license plate and pay your taxes in Berlin! Even in the US, I've never heard of such stories.

PS: Actually the stories I heard in the US were about people from LA establishing their residency in Las Vegas for tax reasons (the details I've forgotten... no income tax in Nevada I think), but I've never heard of people in Las Vegas reporting to the authorities people with Californian license plates. The only people who don't like Californian license plates are the Oregonians, but for entirely different reasons.

[harls]

Originally Posted by Acajack

For example, the average monthly rent for a small apartment in Gatineau is about 400 dollars less than in Ottawa.

What was it 5 years ago?

[P'tit Renard]

Originally Posted by New Brisavoine

^^France is far less centralized than most people imagine. And federal countries don't have tax issues as crazy as explained here. In Germany, federal country par excellence, if you move from Berlin to Potsdam in Brandenburg, neighbors are not going to denounce you to the authorities if you have a Berlin license plate and pay your taxes in Berlin! Even in the US, I've never heard of such stories.

PS: Actually the stories I heard in the US were about people from LA establishing their residency in Las Vegas for tax reasons (the details I've forgotten... no income tax in Nevada I think), but I've never heard of people in Las Vegas reporting to the authorities people with Californian license plates. The only people who don't like Californian license plates are the Oregonians, but for entirely different reasons.

This is very specific to Quebec though. This phenomena doesn't occur in any Anglophone province.

There is no way Quebec would agree to stay in a confederation with a central government as powerful as Paris. Going forward, the federal government in Ottawa can only shrink, as it's inevitable that we'll be moving more towards decentralized Swiss style federalism.

[New Brisavoine]

Originally Posted by P'tit Renard

This is very specific to Quebec though. This phenomena doesn't occur in any Anglophone province.

No metro area straddling Anglophone provincial provinces I suppose. Only large wilderness. That's why.

Originally Posted by P'tit Renard

There is no way Quebec would agree to stay in a confederation with a central government as powerful as Paris. Going forward, the federal government in Ottawa can only shrink, as it's inevitable that we'll be moving more towards decentralized Swiss style federalism.

You don't need to have a central government as powerful as in France to deal with this issue. Most federal countries take care of this. Even in Switzerland, I've never hard of issues with cross-canton workers. Zurich for instance attracts workers from various neighboring cantons, and it doesn't seem to cause any tax issue. There must surely exist some provisions overseen by the Helvetic Confederation to make it neutral in terms of taxation to work across cantonal borders.

[P'tit Renard]

Originally Posted by New Brisavoine

You don't need to have a central government as powerful as in France to deal with this issue. Most federal countries take care of this. Even in Switzerland, I've never hard of issues with cross-canton workers. Zurich for instance attracts workers from various neighboring cantons, and it doesn't seem to cause any tax issue. There must surely exist some provisions overseen by the Helvetic Confederation to make it neutral in terms of taxation to work across cantonal borders.

At the end of the day, the buck stops with the Government of Quebec. It's entirely up to them to decide how to pursue an agreement and negotiate with other provinces (and that's if they even think it's a priority in the National Assembly).

Bear in mind that Canada doesn't even have a national securities regulator, as provinces have vetoed the idea and went to court over it. Even Switzerland has FINMA.

[New Brisavoine]

Originally Posted by P'tit Renard

At the end of the day, the buck stops with the Government of Quebec. It's entirely up to them to decide how to pursue an agreement and negotiate with other provinces (and that's if they even think it's a priority in the National Assembly).

The fact that a CAQ or PQ government wouldn't want to make it easier to work across provincial borders is not surprising. The sovereignists (or closet sovereignists like CAQ) are not too displeased with a harder border between Québec and the ROC. I'm more surprised the PLQ when they were in power and the federal government never pushed for such an arrangement.

[P'tit Renard]

Originally Posted by New Brisavoine

The fact that a CAQ or PQ government wouldn't want to make it easier to work across provincial borders is not surprising. The sovereignists (or closet sovereignists like CAQ) are not too displeased with a harder border between Québec and the ROC. I'm more surprised the PLQ when they were in power and the federal government never pushed for such an arrangement.

As long as Ottawa can continue to collect federal taxes, they've never bothered with provincial taxation matters. It's in both the PLC and PCC's interest to let Quebec do its own thing on this matter of provincial jurisdiction.

Electorally, there wasn't much for PLQ to gain (i.e. it's never really come up as an important election issue, they won't win more Gatineau seats with this policy) and Quebec's Treasury would take a hit.