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Quebec's have-not status

Jennie of Idealistic Pragmatist was kind enough to pass this link along which contains an attempt at explaing why Quebec is a have-not province in terms of equalization. In summary

1) lower salaries
2) higher unemployment
3) artificially low hydro rates

Items 1 and 2 are directly related to another point in the post:

...Personal income taxes are the main source of government revenue in Quebec, but Quebecers already pay the highest provincial personal income taxes in Canada. ...Quebecers pay the highest taxes in pretty much all categories, with the notable exception of tobacco taxes. Consequently, Quebec is already at a competitive disadvantage when compared to the other provinces, and thus doesn’t really have the room to increase personal, corporate or sales taxes in order to generate more own-source revenue.

As I type I can already see the disputing comments being written but it is pretty clear that Quebec's high taxation is a drag on the economy and hence lowers the amount of revenues that Quebec can collect and makes them a have-not province. Looks like a program of tax cuts should happen in Quebec...which is what Premier Charest promised...and did not deliver. This type of restructuring is what Lucien Bouchard has been talking about and why he would win the next Quebec election if he were to head to ADQ. Looks like it is too bad for all of us that he has no interest in doing so.

Comments (12)

Greg:

Personally, I am glad Loonie Lucien is giving the election a pass.

I wouldn’t trust Bouchard for one second.

Note also that Quebecers have recently been named the most stressed out segment of the Canadian population. I suggest it’s a combination of the aforementioned high taxes, tobacco overindulgence, and finally having bratty kids because that’s how they learn how to behave at day care (which they attend from the age of 1).

nomdenet:

It is obvious what Quebec has to do. It’s the same problem as in Toronto. Excessively high taxes have been charged in order to feed the government unionized monopolies. Taxes need to be dropped and the government unions need to take a hit just like the UAW is doing. The UAW now has competition. Quebec has competition. Toronto has competition for head office locations. We can’t let unions hold us to ransom any longer.

Quebec is starting to recognize that the Separatists and the unions are part of the same cabal. Ditto Miller and the unions. The only question is, who will face up to the evitable strikes when the outsourcing starts to take place and when is it going to happen?

One factor that accounts for #2 that wasn’t mentioned in the post was mobility. Unilingual francophones are far less mobile than either bilingual francophones or unilingual anglophones. This means that if they can’t find work, they still have to stay put in Québec, while their anglophone counterparts can go to other provinces if they feel so compelled.

DCardno:

IP - actually, I think that unilingualism and its effect on labour mobility was mentioned in the linked article, even if not in your post.

While I agree with most of the comments in the article, I don’t think the “low hydro rates” is a cause of Quebec being a ‘have-not’ province. The equalization formula measures the capacity to raise tax revenues, not the actual performance. Thus, if BC would raise $XXXBn with a provincial sales tax rate of (say) 9% (representing the average sales tax rate in all of the ‘baseline provinces’) then they are credited with that revenue potential, irrespective of their actual policy decision to estabish a lower tax rate. The same holds for water rentals - with a huge hydro resource Quebec is in a position to raise large amounts by taxing water used for hydro generation, whether they actually impose the tax or not. In theory the Quebec government has made the determination that the lower hydro costs will offset the lost tax revenue by making the province a more attractive place to locate industrial plants, thus providing employment opportunities (and tax revenue).

nomdenet:

Dcardno, I understand your point but we have to get the real elephant out on the table, which is Quebec’s massive debt. It’s $120 billion, it’s a horrendous, de facto, deferred tax on the people. They’d like to shift it to the ROC with equalization. We won’t fall for that anymore.

They have to learn to live within their means, they live for today as we all know and used to think was cute. Time to pay up for transgressions.

That includes paying market or at least cost for things like: Hydro, Post-secondary education, and Nanny Care (a ridiculous subsidy that Martins Liberals are still trying to suck the ROC into).

I hope Charest and Harper can work something out. I don’t want to split up after all the pain we’ve been through since Trudeaupia. But everybody has to start getting realistic about demographics and they ain’t pretty. Socialism won’t work under the best of conditions and it sure won’t work when there’s getting to be almost as many retired people on Health Care as there are working people to support them.

MrEd:

The real problem is they have not been forced to recognize that every socialist society in the world has failed… the money Quebec has been given already from the other provinces and through previous liberal gov’t “mega” projects, not to mention a socialist, boardering on communist belief structure thinking the state should provide for everything, has helped them extend to the $120 billion beyond their means… it’s time to pay the piper and not at the expense of the rest of Canada… Can a province declare Bankrupcy?

Dcardno,

Ah, okay, I didn’t follow the link. (Didn’t write the post, either.)

mr:

When having colored margarine turns into a cluster** you know there’s a mindset that can’t be changed overnite - 120B debt…wow I did not know that.

Lord Kitchener's Own:

My biggest problem with Quebec is that they receive “equalization” from Alberta and Ontario, and yet their tuition rates are lower (for Quebec students, FAR lower) than any other jurisdiction in the country, and they don’t need to fight for an accessible child care system, because they are already funding one.

Equalization is meant to ensure that Canadians receive roughly equal services from government from one end of the country to the other, and that is a noble, and even important goal. It is NOT meant to allow one province of the country to subsidize FAR BETTER (or at least cheaper) programs for their citizens than are available to the rest of us. THAT’s not fair. I think it’s great that the Quebec government gives their citizens such important services at such cheap prices, and if I were a Quebecker, I wouldn’t mind paying more taxes to support these types of programs. But I’m NOT a Quebecker, so why should I have to pay?

lrC:

All equalization should do is ensure each province has at least enough per capita funding to cover off an agreed set of services. If a province misuses the money - say by spending part of its health care allotment on cheaper tuitions - that’s the province’s business. Think of it as reverse sanctions.

Anonymous:

nomdenet and Mr Ed have come the closest to the heart of the matter, which is that transfer payments and Equalization are nothing but welfare-bum megaprojects whose purpose is to try to buy time for the doomed, destructive welfare-bum spending programs that all provinces and municipalities have implemented.

Municipal governments and local school boards and hospital boards turn individual citizens into entitlement-addled welfare bums (and all too often into unemployed, drug-addicted, alcoholic, entitlement-addled welfare bums). Provincial governments then provide transfers and other subsidies which turn the municipalities into entitlement-addled welfare bums. Then, when the provinces’ lines of credits are maxed out, the federal government comes along and turns the provinces themselves into entitlement-addled welfare bums. When federal transfer payments and equalization are maxed out, and the federal government’s line of credit is near to maxing out, then what?

No problem-o! All you have to do is invent a whole lot of scary-sounding, urgent “crises” as an excuse for cranking up the taxes and squeezing the diminishing number of hard-working, non-entitlement-addled citizens and companies even more. It doesn’t matter how ridiculous-sounding and far-fetched the crises are. They can start from absurd premises such as “global warming” and “chicken flu”, and because there is a pot of gold at the end of the rainbow, you will get a long line of welfare-bum losers at the microphones at public hearings and in parliament, demanding that SOMEONE HAD BETTER TAKE ACTION AND MAKE COMMITMENTS RIGHT NOW. Like the idiot losers from Quebec and Nova Scotia I just saw on the CBC news tonight, whining about Kyoto. When you realize that they aren’t pointing to any examples of ruined crops, or rising sealevels, or any other kind of concrete and indisputable problem, but they’re just whining - that’s when you know you’re being fed a line of B.S. But the B.S. goes all the way back to your local hospital, to your public school, to your employment insurance office, and to your local daycare center. These are the gaping holes in your sieve of a socialist economy.

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