Hon. J. J. McCann (Minister of National Revenue):
In view of the statement made by the Prime Minister (Mr. St. Laurent) in this house on January 17 last following the exchange of correspondence which he had with the premier of Quebec, I think that both hon. members and residents of Quebec would appreciate receiving from me a statement regarding the filing of income tax returns in the coming few months.
Approximately eight million income tax forms have been made available in the province of Quebec through post offices and employers. These forms were printed last fall, and therefore indicate that the allowable tax credit in respect of the Quebec provincial income tax will be the amount paid to the province of Quebec or 5 per cent of the net federal tax, whichever is the lesser. As these forms are now in the hands of the public, it is not my intention to print and distribute new income tax forms amending the maximum credit from 5 per cent to 10 per cent. Residents of Quebec should use the forms already provided, but calculate their provincial tax credit as the lesser of the amount paid to Quebec or 10 per cent of the net federal tax.
As the taxation division must commence processing the 1954 income tax returns when they are received, the revised amount of tax credit will be allowed in the expectation that the house will retroactively enact legislation on this basis for the year 1954. Furthermore, with respect to the year 1955 I am recommending an immediate change in the income tax regulations to permit employers to reduce the amount to be deducted from the remuneration paid to employees working in the province of Quebec by 10 per cent.
Subtopic: STATEMENT ON DEDUCTION OF PROVINCIAL TAX BY QUEBEC RESIDENTS