The ongoing -- perhaps growing -- student strikes in Quebec have brought into focus the most pressing question in this period of austerity: is the only solution to current economic challenges to cut public services and raise "user fees" such as post-secondary tuition? The answer to this question has as much a consequence for student strikers as it has for workers and Canadians from coast to coast.
Just as there are reasonable alternatives to cutting public services at any level of government in Canada, there are also many viable alternatives to raising Quebec's tuition fees that should be considered. But these, unfortunately, have been successfully kept out of the realm of public discussion over the course of this strike.
The most obvious is a higher tax rate on the super rich. Why is it, for instance, that under Quebec's current tax scheme, someone who earns $85,000 per year pays the same rate of tax -- 24 per cent -- as someone who earns ten times more or $850,000? After all, someone who earns $40,000 is subject to a lower 16 per cent rate of tax, so why does the same progressive bracketing approach not apply to the other end of the wage spectrum?
In Ontario, the two per cent surtax on income above $500,000 negotiated between the Liberals and the New Democratic Party as part of the deal to pass the 2012 budget is expected to generate nearly $500 million dollars annually. A similar measure in Quebec would likely go a long way towards resolving the structural university deficit, pegged by the government in 2009 at around half a billion dollars.
Another option kept out of discussion is corporate taxes. In 2011, Quebec eliminated the corporate tax on paid-up capital, denying itself hundreds of millions of dollars in revenue each year. Or take the general corporate income tax rate, which, at 28.4 per cent, means that Quebec has one of the lowest rates in North America. Many readers might be surprised to learn that this statutory corporate tax rate is lower than in California (40.75 per cent), Florida (38.58 per cent) and Texas (35.65 per cent). In fact, American subsidiaries in Québec remitting profits to the U.S. must also remit the difference between the lower Québec/Canada corporate tax rate and the higher U.S. rate to the Internal Revenue Service, so Quebec is effectively passing up revenue to a foreign government.
Certainly, the argument that corporations should pay for universities via taxes is particularly strong, given that they benefit immensely from a skilled workforce. After all, would any of the big pharmaceutical companies in Quebec have even considered locating in the province if there were no talented researchers to hire?
And what about mining royalties? Quebec is extremely well endowed with raw materials and natural resources, but are citizens getting a fair share of that wealth? In 2011, MiningWatch Canada and Québec meilleure mine observed that the province "still ranks near the bottom of the heap in the collection of mineral royalties," and that it "was only paid $114 million on revenues of over $5.6 billion." It is no coincidence that only a couple of months after Premier Jean Charest went on his province-wide dog and pony show to sell off Québec's immense northern riches, through his Plan Nord, students went on strike over plans to raise tuition fees.
In the context of the strike, where one stands on the above public financing options is certainly important, but it is ultimately of secondary significance. What is more more significant is that the strikes have created an opportunity for a mainstream debate not only in Quebec, but across Canada, about what the responsibilities of large corporations and the wealthy in society must be.
Over the last decade, regrettably, governments in Canada have been unwilling to entertain this kind of discussion. Take, for example, the recent Drummond Commission established by the Ontario Liberals. Its carefully crafted mandate to assist the government with balancing the budget did not allow for a review of the revenue-generation side (i.e., the tax system) of the public financing equation. It is not surprising, then, that the Commission concluded that cutting services and jobs is the only way to cut the deficit.
It is this kind of austere logic, presented as inevitable, that Quebec's striking students are railing against. Indeed, contrary to what is claimed repeatedly in the mainstream press, students are not saying that they should not pay their "fair share" for education and let the province sink into debt. Rather, unlike the super rich, who tend to be unequivocally opposed to higher income tax rates (i.e., paying more), students are saying that they should pay for their education through a progressive tax system once they enter the workforce. And this is not a particularly radical idea.
In many parts of the world, including many countries in Europe, post-secondary education is zero or close to zero. In Sweden, in fact, a small controversy broke out in 2010 when the government decided to introduce tuition to non-Swedish/non-European Union (EU) students; local and EU students would not be affected.
By striking and holding their ground for more than a hundred days now, Quebec's students have forced a discussion of public financing options that have heretofore either been suppressed from public discussion or characterized as socialist delusions. For the students' remarkably insightful proposed solutions, we must be thankful. And for their remarkable achievement in arresting society's attention, we are truly indebted.
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Offering free education, free medical care or any free services is a misconception. It has to be paid by someone and the royalties and corporate taxes you allude to won't cover the full package. Quebec's $7.00 per day daycare, for example, costs taxpayers an additional $31.00 per day so it is no longer $7.00 per day. European, Scandanavian and countries of the Netherlands are all in dire financial situations precisely because they offered so many FREE perks to their citizens. It is not sustainable. Sweden, for instance, has a 49% tax rate for citizens and the corporate rate sits at around 28% and there is no escaping it.
What you should be doing, M.Rousseau, is teaching these students fiscal and social responsibility; respect for the laws and the society they live in. If they are such heroes as you allude, why do they cover their faces when comminting acts of violence or vandalism? Why don't you address their misconception that throwing smoke bombs into the subway system is not a harmless prank as one of the comments below states? Then again, you are part and parcel of the problem since you are associated with the swivel servants association; talk about detached from reality.
The financial problems experienced in some parts of Europe are more due to financial ineffiecency and a lack of social responsiblity than anything else. When it's a national sport to see who's best at avoiding to pay taxes, you're bound to run into trouble eventually.
In my home province, Quebec, you have approximately 27% of the adult population on some form of social assistance; another 30% of the adult population working at some level of the civil service (provincial, municipal or federal); unemployment hovering around 8.5% (for the books) plus countless more who have fallen off the radar; the highest personal income tax rate in Canada; an actual provincial debt of more than 126 billion dollars. We are in no position to emulate the cradle to grave policies of any country. It is safe to say we can both see the cliff this road is leading to.
the overall rate is actually much higher but is underreported for a variety of reasons.
The Swedish model on the surface looks great... Just as was the case in Ireland 5 years ago. The real question is can it be sustained.
Oh, I don't know...maybe because tax RATE is not the same as tax PAID.
Do the math, for God's sake. One person pays only $20,400 and the other pays 10 times more than that ($204,000). If you're suggesting that the person who pays $183,600 MORE each year than the other into the government system (i.e.: back to society) is somehow shirking his duty as a citizen, or that the system is unfairly rigged in their favour, you might want to give your head a shake.
Hmmm... I think that's been tried before. Didn't work so well, as I recall.
Did the English Revolution lead to communism?
Did the American Revolution lead to communism?
Did the French Revolution lead to communism?
What caused those revolutions? Was it maybe frustrated expectations from the greed and selfishness of what in those days would have been the !%.
Do a little reading OK?
there can be no dialog when one party has nothing but contempt.
Sweden's 65% tax rate is certainly not the burden of minimum wage earning swedes.
But someone DOES pay it (presumably the wealthiest swedes)
...and it DOES provide their citizens with free education.
No discrimination. Poor AND rich have access.
Repeating the lies put out about the protest gives me the impression that you came to this thread for the sole purpose of expressing your uninformed opinion, but were afraid to educate yourself on the issue.
Anne has it exactly right.
Now let's hear actual arguments as to why privatized education would be better than socialized education and not get into NWMT (Not with my taxes!) argument, because your taxes pay for lots of things: someone else's education, someone else's health care, someone else's war, someone else gold mine, etc. People pick on education because they don't believe in socialised education, so let's hear why it's not good to have taxes go to education. That's the debate, if you want to have it.
"Real wealth producers" do not "serve others", they serve themselves. Others may get on the bandwagon, or buy stock, or get a job in their company - all secondary effects.
I hate when articles fuel the fire with misinformation. I am not saying the reality is much fairer, but:
An 85K earner will owe less than 43% in taxes while the 850K earner will owe more than half his salary. 24% is solely the Provincial tax rate for any anyone earning above 80 200$.
The numbers…
All other contributions (e.g. QPP, EI, etc…) and deductions aside, both the 85K earner and the 850K earner in 2012 Quebec will owe the Feds 15% (6406,05$) on their first 42 707$ earned.
Now…
The 85K earner will also pay 22% (9 304.46$) on his next 42 493$ dollars earned to the Feds and stop at that bracket for Federal.
The 850K earner will also pay the Feds 22% (9 395.54$) on the next 42 707$, 26% (1 2217.92$) on the next 46 992$ and 29% (208 102.26$) on everything else (717 594$).
The 85K earner will finally pay Revenu Quebec approx 24% (20 400$) on his 85K.
The 850K earner will also finally pay Revenu Quebec 24% on his earnings, which amounts to an extra 204 000$.
So that’s 6 406.05$ + 9 304.46$ + 20 400$ = 36 110.51$ in taxes for the 85K earner. That is 42.48%.
And 6 406.05$ + 9 395.54$ + 12 217.92$ + 208 102.26$ +204 000$ = 440 121.77$ for the 850K earner. That is 51.78%.
Hasn't that become obvious to you?