18 December 2003 Ministerial Correspondence 2003-0049244 - Provincial Tax Rate

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

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Dear Colleague:

I am writing in reply to your letter of November 3, 2003, addressed to my predecessor, the Honourable Elinor Caplan, outlining the concerns of your constituents about provincial tax rates and asking whether there is a possibility that there will be a change to the tax policy that an individual's provincial tax rate is determined by his or her province of residence at the end of the year. I apologize for this delayed response.

Generally, provincial tax legislation gives taxing authority to the particular province within which the individual resides on the last day of the year. I understand that the Provinces took this approach to simplify, as much as possible, the determination of tax payable and to avoid unnecessarily complex allocation calculations. Each province has individuals changing residence to, or changing residence from, another province, such that any possible increase to provincial tax revenue resulting from creating, implementing, monitoring and enforcing those calculations would likely be negligible. I am not aware of any proposed amendments to the provincial tax legislation at this time.

The Canada Revenue Agency is responsible for administering and enforcing the existing income tax laws as passed by Parliament and interpreted by the courts. The Department of Finance works with the Provinces in establishing the tax policy underlying the tax laws, and I assure you that Finance officials are aware of the issue.

I trust that the above information will assist you in responding to your constituents.

						Sincerely,

Hon. Stan Keyes, P.C., M.P.

c.c.: Minister's Office
Political Assistant