Which is more greedy between the government of Quebec and the federal government on interest rates on tax debt? And as far as interest rates for tax refunds go, that’s the highest value cheap between the two orders of government?
Drum roll… In both cases, the “palm” goes to the Quebec government, which is both “greediest” and “cheapest” to Quebec taxpayers.
Dear Quebecers, we may cry against the federal government, but we have to admit that Revenue Canada is more generous than Revenue Quebec when it comes to interest rates on debt and repayments.
- Over QUB radioMichel Girard explains that “Revenue Quebec is much cheaper than Revenue Canada”:
REQUIREMENTS
Nice coincidence! While the deadline (April 30) for filing our 2022 tax returns has just passed, Revenu Québec has just increased its annual interest rate on debt to 10%.
This is 1 percentage point more than the interest rate (9.0%) that Revenue Canada charges on tax liabilities (taxes, duties, contributions).
For the first quarter, January through March 2023, Revenu Québec charged 9% interest on the accounts receivable, compared to 8.0% on the part of Revenue Canada.
This one percentage point more expensive difference in favor of Revenu Québec is a “novelty” introduced by the government of François Legault in 2023.
In the prior quarters from October 1, 2020 to the end of December 2022, Quebec and Ottawa maintained their respective tax receivable rates at the same level.
REFUNDS
For the current quarter, April 1 through June 30, Revenue Canada has increased the interest rate (annual) on refunds of overpayments (taxes, taxes, contributions) paid by taxpayers to 7%.
That’s 2.75 percentage points higher than Revenu Québec’s 4.25% rate.
Compared to the previous quarter, i.e. from January 1st to March 31st, the gap has increased. In Q1 2023, Revenue Canada was offering a 6% interest rate on tax overpayments, compared to 3.75% at Revenu Québec.
This resulted in a difference of 2.25 percentage points. In Q4 2022 the difference was 2 points and in Q3 1.75 points. As you can see, the gap to Revenue Canada widens as more quarters go by as Revenue Quebec continues to benefit from rising interest rates.
Always more profitable
Revenu Québec, which reports directly to Treasury Secretary Éric Girard, also used the rate hike to widen the gap in favor of the government between, first, the amount it receives in interest rates on debt, and second, what he says interest rates are increasing much paid taxes and duties.
In Q3 2022, the difference in favor of the Quebec government was 3.75 percentage points. Today the gap in favor of the Legault government has narrowed to 5.75 percentage points.
This is all the more unjustified given that at the federal level the difference between interest rates on debt (9%) and interest rates on repayments (7%) is only 2 percentage points in favor of the state.
