Two Montreal Gazette articles that got my attention

The Montreal Gazette recently published two articles that got my attention by their unusual perspective.

First article. On april 19th, Janet Bagnall writes about our 7$ daycare program. The program, she writes,  « doesn’t cost Quebec, the federal government or any other province a dime. It is fully self-sufficient, bringing in more money than it costs in subsidies ».

Luc Godbout, professor of economics at the Université de Sherbrooke, is quoted saying : “We tax ourselves at a rate several percentage points higher. If other provinces want the same public services, they can pay for them by raising their taxes.”

If find interesting that Ms Bagnall, referring to Québec’s daycare program, uses the term « OUR » subsidized system.
Second article. On april 25th, Michael Holden, senior economist at the Canada West Foundation, writes an article aiming at setting the record staight about Alberta paying for Québec’s social programs.
He writes : « It is […] untrue that equalization allows Quebec to afford services that are impossibly generous for Alberta. The equalization formula tells us that the Alberta government could collect twice as much revenue as Quebec (including its equalization payments) if both provinces had identical tax rates. In other words, Alberta could easily afford tuition rates lower than those in Quebec, and plenty more besides, if it was willing to pay for them. »
If find these two articles interesting because they take side with Québec. The way I see things, if Québec suffers from inequities of the federal system, anglo quebeckers also suffer along with the whole Québec population. Language debate aside, the economic interests of anglos and francos are the same. When a part of our income taxes finances Ontario automobile industry instead of forestry, it hurts everyone in Québec, francos, allos and anglos.
If find interesting to see The Gazette publishing two articles addressing conflictual economic issues from a Québec perspective.

14 réflexions au sujet de « Two Montreal Gazette articles that got my attention »

  1. AM

    I have a hard time seeing the « interesting » part of The Gazette using the word « our » when talking about Quebec. Given that it is published in Quebec by Quebec residents, what were you expecting for them to say?

    And none of what the 2 articles talk about is anything new. That people across the country don’t understand the whole equalization concept and therefore revert to gross generalizations is nothing new either. Nor is that surprising given that the actual equalization formula is quite complex and is based on « average potential tax revenue » given « average tax rates » across the country. I am sure many politicians don’t have a good understanding of it either.

    Actually, saying that Alberta is paying for $7 daycare in Quebec is very similar to saying something like « when a part of our income taxes finances Ontario automobile industry instead of forestry, it hurts everyone in Québec… ». A gross generalization.

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    1. Michel Patrice Auteur de l’article

      I noticed (general impression without statistical analysis) that The Gazette colomnists tend to use neutral terms such as « Quebec government » instead of « our government », or « quebeckers » instead of « we » or « us ». Perhaps it is only something about writing style.

      Also, The Gazette more often criticizes Québec’s policies and uses terms such as « but us, anglophones,[…] » This type of discourse is referred to in english as « us and them », « us » then being anglos and « them » being francos.

      So I found interesting to see an instance of The Gazette writing a « us and them » article in which « us » meant quebeckers and « them » canadians (or non-quebecker canadians).

      ***

      Saying that a part of our income taxes finances Ontario automobile industry instead of forestry is indeed a gross simplification.

      But nevertheless, there is something to it. Québec produces 101 billions in fiscal revenus, 65 of those billions are managed by Québec, and 46 of those billions are managed by Ottawa. So the 8 billions that we get in equalization payment account for roughly 8% of our budget (8 out of 101) but the Québec fiscal revenus managed by Ottawa account for 46% of our budget (46 out of 101).

      Many think that we could make different choices if we managed 100% of our budget instead if half our budget. The choice between financing ontarian automobile industry or Québec forestry is an instance of such a possible choice.

      This being said, my point was more the following one :

      If belonging to the canadian federation has a negative impact on Québec’s economy, anglo quebeckers suffer the same negative impact. We could debate the pros and cons of independence, I just think that it would be interesting to debate if independence would be economicaly good or bad for us and I think that it would be interesting if that « us » meant anglos and francos. That is why I found interesting to see The Gazette defending our 7$ daycare program against Alberta’s criticisms.

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  2. AM

    « Also, The Gazette more often criticizes Québec’s policies… »

    Really? Because Le Devoir is such a big supporter of the goverment’s policies, especially with respect to education??

    « and uses terms such as “but us, anglophones,[…]” This type of discourse is referred to in english as “us and them”, “us” then being anglos and “them” being francos. »

    I don’t think us vs. them is unique to the Gazette, or anglophones. Just look at that L’actualite poll. Talk about trying to inflame and create divisions. Or the any number of Journal de Montreal « investigative » articles on language or the recent one on the Hassidic Jewish community. But to me, the worst example of this us/nous thinking was Parizeau’s 1995 speech after the referendum. For the media to talk in such terms is one thing, for a politician looking to lead a country, it is much worse.

    « Many think that we could make different choices if we managed 100% of our budget instead if half our budget. The choice between financing ontarian automobile industry or Québec forestry is an instance of such a possible choice. »

    You’re missing something here Michel. With respect to the second statement, you could only say something like this if the feds consistently spend more (in relation to relative population) money in certain provinces than in others. And not in any particular 1-2 year period (like when they splurged on auto in Ontario) but over a longer period of 10-20 years. I mean Ontario also pays taxes to the federal government. Do you really think the feds spend signifcantly more on certain other provinces than Quebec? With Quebec being a have-not province?

    With respect to managing 100% of the budget, you seem to think there is a lot you could do differently. But it’s not like most of the federal budget goes towards discretionary spending. Most of the budget goes to mandatory spending, things Quebec could not really change (employment insurance, OAS, interest expense) and a bunch of it is just transfers back to the provinces. You mention subsidies, but that is only a small part of the budget. Is there waste that could be squeezed out of the federal budget? For sure, boatloads. But given that Quebec has the largest debt load (as a portion of GDP and per capita) and a pretty bad fiscal record, do you really think it would spend that 46% better than the feds?

    By the way, where did you get the figures you mention ($101B, $46B)?

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    1. Michel Patrice Auteur de l’article

      « I don’t think us vs. them is unique to the Gazette, or anglophones. »

      When I will read a Le Devoir or Le Journal de Montréal paper telling about the anglo point of view, I will find it interesting too. I wasn’t blaming The Gazette for anything, I was just saying that I found interesting to see them using, in this instance, an inclusive « we ». If I have upsetted you by seeing something positive about The Gazette and I truely apologize.

      ***

      « By the way, where did you get the figures you mention ($101B, $46B)? »

      Federal revenus from Québec, figure taken from :

      http://www.statcan.gc.ca/pub/13-018-x/2009002/t/tab0724-fra.htm

      See Recettes totales, last year available is 2007 : 45,7 billions.

      Québec government budget is about 65 billions. You get the 101 billions figure by adding 65 to 46. Fiscal revenus from Québec amount to 101 billions, 65 managed by Québec, 46 managed by Ottawa. These are of course rought estimates, since one figure is from 2007 and the other from last year Québec budget.

      ***

      About the different choices we could make and about the management of our budget, there is more to tell about it, but I have little time now. I will try to come back to it in the next few days.

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    2. Michel Patrice Auteur de l’article

      « Just look at that L’actualite poll. »

      There has been much a do about that issue of L’Actualité. Being a L’Actualité suscriber, I read the issue from cover to cover. In addition to Lisée’s accursed paper, there was an interview with Association for Canadian Studies Jack Jewab and a column by Josh Freed. Interesting issue with a variety of point of view.

      http://www.lactualite.com/societe/plus-francophiles-que-vous-ne-le-pensez
      http://www2.lactualite.com/freed/2012/03/15/josh-freed-anglophone/

      « But to me, the worst example of this us/nous thinking was Parizeau’s 1995 speech after the referendum. For the media to talk in such terms is one thing, for a politician looking to lead a country, it is much worse. »

      During the referendum campaign, greek and italian community leaders, for instance, called to vote No and, afterward, they congratulated themselves for the No victory. And that was OK. But when Parizeau says that they contributed to the No victory, that’s not OK.

      You can blame Parizeau for many things, but not for not thinking what he says and not saying what he thinks.

      « Most of the budget goes to mandatory spending, things Quebec could not really change (employment insurance, OAS, interest expense) and a bunch of it is just transfers back to the provinces. »

      Interesting. So elections are about choosing the one who will have no choice?

      « But given that Quebec has the largest debt load (as a portion of GDP and per capita) and a pretty bad fiscal record, do you really think it would spend that 46% better than the feds? »

      So, we are a society of morons too stupid to manage ourselves and we should let someone else manage our affairs? Ok perhaps we should do this. And doing this, by what magical mechanism will we improve ourselves? We will get better at managing our affairs by managing our own affairs.

      Your vision is (I am simplifying) that we have a bad fiscal situation because we are inferior. The problem with this vision is that there is no hope.

      I do not think that we have a large debt load because we are inferior. I think we have a large debt load…

      …because we built nearly from scratch a school system fifty years ago.

      …because we became a modern society in only the last fifty or sisty years.

      …because Québec spends on things that other provinces do not spend on. Its own revenu minister, its own immigration policies, its own cultural policies, its own etc. We are no longer a province like any other and not yet a fully independent country. We are crossing a river and we are half way, we can reach the other shore or go back, but staying in the middle of the river, we have to withstand the strong stream of the river.

      …because of a situation where two governments are competing on the same territory with different objectives.

      …because of etc etc.

      When looking at things this way, there is hope. One can see causes for our problems and see things to work on.

      We are capable of great things. In a time when we were regarded as uneducated pea soups, we built the largest hydroelectric power producer in the world. And we built infrastructures to carry electric power over distances that were then thought impossible.

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  3. AM

    Oh no, I am not upset at all. I just did not see this as newsworthy.

    Interesting table, I did not realize information like this existed. But if I am reading it right (and if this includes all treansfers/payments) it means that the federal government spends $5B more in Quebec than it receives from here (and was spending >$10B more in the first half of the 90s). On the other hand, the table for Ontario shows that the federal government spends $21B less in the province than it collects there.

    Does’t seem like Quebec is getting shortchanged here.

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    1. Michel Patrice Auteur de l’article

      « Does’t seem like Quebec is getting shortchanged here. »

      Because we are poor, we need the federal system. Some other say that, if the federal system was so beneficial, we would do better…

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  4. AM

    « But when Parizeau says that they contributed to the No victory, that’s not OK. »

    I did not say it was not OK to say that. He can say what he likes. But I would have a hard time voting for someone like that. The worst part of the speech was the sentence after the « vote ethnique » one. Instead of saying something like: next time we will reach out to our « ethnique » compatriots to convince them that the sovereignty project is inclusive and will benefit them, he said, well, we’ll just have to get a higher YES vote among Francophones.

    Just imagine, if in 2006 (when the Conservatives only a minority government due to a big loss in Quebec) Harper would have said something similar to Parizeau, that they did not get a majority because of Quebec and that next time, they’ll just have to get more votes in the ROC. Don’t you think that would have led to a huge uproar? And as a Francophone Quebecer, how would you have felt?

    « Your vision is (I am simplifying) that we have a bad fiscal situation because we are inferior. »

    Wow. There are so many things wrong with this sentence. I don’t think there is a correlation between fiscal position and IQ. I mean do you really think Californians, who developed a great university system, Silicon Valley and some of the most innovative companies anywhere in the world, are inferior to Texans. But at even more fundamental level, I don’t think societies are inherently superior or inferior to each other.

    If anyone is saying that someone is inferior, it’s you. I am saying that an independent Quebec government would not be able to spend the $51B much differently than the federal government. You are saying that Quebec would spend it better. Actually, you are going even further. You are saying that Quebec would do better by spending $46B than the federal government, which is spending $51B in the province.

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    1. Michel Patrice Auteur de l’article

      You quoted : “Your vision is (I am simplifying) that we have a bad fiscal situation because we are inferior.” And added : « Wow. There are so many things wrong with this sentence. I don’t think there is a correlation between fiscal position and IQ. »

      I was probably putting in your mouth the words I always hear about Québec. What I most often read on english forums is that most of our problems are caused by intrinsic weaknesses of our society, or caused by some moral deficiencies of ours.

      My vision of things is that we are a normal people facing challenges just like any normal societies. The challenges that we face sometimes have historical roots, sometimes have actual situational (if there is such a word…) causes (like, for instance, the challenges we face due to globalization).

      Looking at the context and the situation as possible causes of our challenges gives us something to work on. Looking at us as intrinsicaly limited people leaves no hope. If you were not saying that we are intrinsicaly limited, fine, then I just misunderstood you.

      And I don’t see how I am the one saying that someone is inferior. (« If anyone is saying that someone is inferior, it’s you. ». Does this someone refer to us or to others? What you mean is unclear to me…)

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  5. AM

    « Interesting. So elections are about choosing the one who will have no choice? »

    You’re taking me too literally here. By choice, I mean having choice to make significant change. You can make all kinds of changes to any part of the budget at the margin, but significant changes are very hard to do politically (unless you are talking about budget increases).

    And to do better than what we have now, you would have to make significant changes, which will entail cuts in certain parts of the budget. You mentioned subsidies. From the tables you linked to, the federal government spent $3.7B on subsidies out of total revenue of $238B in 2007. That is 1.6% of revenue. 1.6% of $46B is a little over $700M. Smarter spending on $700M is not going have any significant effect on the shape of public finances or on the economy.

    And this is before taking into account the $5B less that an independent Quebec government would collect as revenue (so spending would be $46B, not $51B). That’s a 5% cut (when compared to the full $101B). Good luck trying to get voters to reelect you if you give them a 5% cut to the budget.

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    1. Michel Patrice Auteur de l’article

      I took you too literally on purpose, I wasn’t serious.

      Yet, if one cannot make significant changes, I see this as another argument about the uselessness of having two governments.

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  6. AM

    « I do not think that we have a large debt load because we are inferior. I think we have a large debt load… »

    Others have modernized their economies and built good education systems without getting their debt to 94% of GDP. Take a look at South Korea. As per wikipedia, they have a 33% debt/gdp ratio and the economic transformation they have went through over the past 5 decades has been even more extraordinary than Quebec. And while they are significantly poorer than we are, they have an internationally very highly rated education system.

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  7. AM

    « Yet, if one cannot make significant changes, I see this as another argument about the uselessness of having two governments. »

    So then we should get rid of municipal governments too and forget having separate cities and have everything controlled in Quebec City?

    With respect to the article you linked to, obviously I cannot comment on a book I haven’t read. The article itself is strange as it does not say anything concrete about the book – not one example of all that waste nor any figures. I have the feeling the reported did not actually read the book.

    The description in the book did mention the word « chevauchements », which Legault used as well in his document on a sovereign Quebec’s finances from a few years ago. And that I did read (I hope God forgives for that one…). And if this book is anything like that, then it is not serious.

    Obviously, there is a lot of duplication (waste) in government spending and you can sit down with a pen and paper and just get rid of them. You and I could go through these budgets and surely find billions in wasteful spending. And this was painfully clear to me when a few weeks ago, doing taxes for 4 people, I had to fill out 8 declarations when in every other province people only do 4. So great, in an independent Quebec, we’ll just have one revenue agency. Wow, millions saved.

    But that is just not how it works in politics. Thing is, every dollar spent by the government -no matter how wasteful- is a dollar going into the economy. It ends up going in somebody`s pocket who then spends it, creating economic activity. So if the government does not spend that dollar, that affects the economy and affects some group of citizens (public sector employees, pensioners, sutdents, whoever) who will not be happy. So that is why it becomes hard to cut public spending.

    Or think about this way. If Legault’s really believed in the figures in his document, if you could so easily achieve those surpluses he wrote about, why is he not pounding the table for immediate sovereignty? Why is he heading a party that is not even advocating sovereignty? Or why is the PQ not publicizing these things, especially given that in 1995 a lot people who voted NO did so for economic reason (remember people worrying about their pensions)?

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