What would we do without equalization payment?

Some figures

The equalization payment is 2.9% of our GDP (compared to 6,5% for New-Brunswick, 4,0% for Nova-Scotia, 4,9 for Manitoba and 8.0% for Prince-Edouard-Island). It is 990$ per capita (compared to 1982$ for N-B, 1258$ for N-S, 1409$ for Manitoba and 2372$ for PEI). The loss might be significant, but not as dramatic as one might think.

One thinks that, since we receive the largest equalization payment, we are the poorest. Viewing us as one province out of ten, one forgets the size of our population and of our economy. If New-Brunswick had the same population of Québec, it would receive 15 billions in equalization payment.

Different choices

Roughly, 20% of the federal budget comes from Québec. The amount of money we send yearly to Ottawa is roughly 46 billions (in 2007, Stat. Can.). We would make different choices for that money.

Beetween 1970 and 1993, 66 billions went to subsidizing the gaz industry and 6 billions to nuclear. Hydroelectricity received nothing. (I unfortunately don’t have the figures yearly, but we know that the federal governement helps the gaz industry with public money (through tax credits and so on)). We would put our 20% of that money on other sources of energy production (or we would save it…).

Ottawa considers buying 65 fighter jets for 9 billions. We would put our 20% of that money on something else. The same reasonning goes with the total cost of the war in Afghanistan.

Ottawa puts money in the development of the ports of Vancouver, the door on the Pacific, and Halifax, the door on the Atlantic. We would put our 20% of that money on developing the port of Montreal which would help developping the economy of Montreal.

When Ottawa spends 10 billions on helping the automobile industry, 20% of that money come from Québec, but we have no automobile industry. We would rather put that money on helping the wood industry that needs it these times. Or on aerospace, technology, manufacturing industry, which are more important in our economy.

Ottawa will invest in an under-water cable carrying electricity from Newfoundland to Nova-Scotia to bypass Québec territory. It has no advantage for us and it competes with our electric infrasructures. We would not spend our 20% of that money on basicaly screwing us.

Actually, the Saint-Laurent Seaway is financed with our money and with our share of the federal money, those infrastructures help the ontarian economy. We could charge for the use of the Saint-Laurent Seaway. That would be a gain. There is a second and more interesting gain : some industry would find it more interesting to operate in Montreal that in Toronto to avoid the cost of using the Saint-Laurent Seaway, that would be a tool to help grow the economy of Montreal.

The same reasonning goes for the railways going from Ontario to the Maritimes and for the Transcanadian going from Ontario to the Maritimes. These infrastructures benefite the trade between Ontario and the Maritimes through our territory. We would use these infrastructures to our advantage.

So we would make different choices, good or bad, but these choices would be our choices.

Some other factors

There are other factors that I cannot quantify. The canadian performance in environment is poor. Throught the Kyoto agreement, we would benefit of our better performance and pay less for the poor canadian performance.

Also, a study of 1997 notes that quebecers have about 200 billions dollars in assets in canadian banks based in Ontario and a very small pourcentage of that money is reinvested in Québec. Those banks would then be foreing banks, one would think that we could bring back those assets to Québec, and help developping our own financial sector. One would think that some of these banks would find it interesting to open offices in Montreal which would bring more business and high paying jobs to Montreal. Or mabye some other american banks willing to compete with canadians banks. Or banks from Europe, who knows?

In international forums, the vote of one country is often worthed a lot. We could scratch the back of some other country that would in return scratch our back. How much is this worthed? I don’t know. But more than having someone else speak in our name.

« What to do » instead of « Whose money »

One other thing would change. Look at the debat over the financing of the new Colisée de Québec. How much time has been spent in arguing about what part will the federal and provincial governements pay? And this is only a 200 millions dollars arena. The future debates, in Québec and in Canada, will be more about WHAT to do with money instead of WHOSE MONEY will be spent. That would be a very good thing for Quebecers AND for Canadians.

Beside financial issues, the independance of Québec would free canadian politics from the ongoing struggle of canadian unity. From the point of view from of western provinces, that would weaken the central alienating power of Ottawa. That would be a very good occasion for western provinces to get more power in the federation and in their own affairs.

One other thing would change. We would not have daily thrown at our faces that we live off equalization payments. That alone is priceless.