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Maripier Isabelle

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Quebec Budget: Face to Face with Reality

Posted: 11/27/2012 12:00 am

Once upon a time, in a province where politics generated more suspicion than enthusiasm, at a time when trust was as rare as a rainy day in the desert, a newly-elected government was about to unveil its first budget.

On their way to power, members of that government had said a lot, multiplied tempting promises and striking declarations. The expectations they had fostered were high. In their description of the province's situation, no challenge required that tough choices be made and good decisions were systematically popular ones. According to their discourse, the world could be depicted in a manichean fashion, the private sector lying on the wrong side of the picture.

This is unfortunately the typical pattern of an electoral campaign. Opposition parties, who do not have to cope with the consequences of their sayings before -- and if -- they win a plurality of seats in the legislative assembly, have a strong incentive to give the priority to their political agenda, even when this means ignoring important but yet inconvenient truths about the general economic context in which a nation evolves.

Only a couple of months ago, as all of Québec's political class was as present in neighborhood barbecues as it was in our daily tv shows, the PQ did not miss one occasion to manifest its opposition to most of the former government's approach on economic matters.

In August, they demonized the Generations Fund as a tool to reimburse the public debt, renaming it the "illusions fund" and promising to abolish it as soon as they would set a foot in the Honoré-Mercier building. Last Tuesday, they implicitly admitted that it is a cornerstone of Québec's credibility in terms of public debt management, and maintained it.

In August, supposedly infuriated by the province's new royalties regime, they said they would never accept that mining companies be taxed on their profits rather than on their total revenues. They tried to convince Quebeckers that they didn't get as much benefits as they should from mining activities (this was even the theme of one of their broadcasted tv ads). Last Tuesday, they left untouched that same royalties regime, invoking the fact that their previous attacks were based on assumptions that "would need to be explored further."

In August, they said they would ensure that the Caisse de Dépôt et de Placement du Québec be more influenced by the government's economic development plans. Last Tuesday, they had to admit that this change in the administration of the Caisse would frighten the markets and the credit rating agencies, therefore harming the province's economy.

In August, they said they were worried about the situation of experimented workers and the financial situation of the aging population. Last Tuesday, they cut the tax credit they could get when they participate in the labour market.

In August, they said so much... Since then, they learned that when one aspires to lead a state, popular promises are not always the best. And the best promises are not always popular.

Now, many lessons could be learned form that story. But I sincerely hope that we remember this one: No matter how hard one tries to escape from it in the course of an electoral campaign, reality catches up in the end. Especially when you finally become responsible for the public finances of a province of nearly 8 million people, whose prosperity is challenged by the ups and downs of a precarious world economy, by the shadows of aging demographics, by an aging infrastructure network and by stronger and more aggressive competition on the world's markets...

The most deplorable thing about this budget isn't the fact that it refrained the PQ from moving on with his electoralist yet utopian and risky agenda -- in fact, I can only sigh in relief that the Caisse de dépôt et de placement remains free of any political influence, that the Generations Funds is maintained, that the former government's objective of balancing the budget in 2013-14 has been denied. (I won't, however, pretend that I am not concerned by this budget's lack of vision, overenthusiastic forecasts in terms of future economic growth (2 per cent for 2014-15) or by the decision to freeze the tuition fees and to revoke the recent changes enhancing the efficiency and redistributive virtues of the student loans and bursaries program. But this is not the purpose of this blog).

The most deplorable thing is that by presenting this budget, the new government acknowledges the fact that it campaigned on promises he knew were irresponsible and unrealistic. That, knowing economics does not sell, nor make you popular, he chose to forget about reality for 33 days and to demonize those who did otherwise. Doing so, he attacked each of his opponents' decisions and propositions, although he knew he would himself have to make them, would he win the election. Ironically, he simultaneously deplored the growing cynicism of the population towards politics.

An electoral campaign should not be seen as an opportunity to take a break from the facts, even if it is easier to pretend they do not exist.

 

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