Imagine you're a German asked to pay for the lifestyle of a Greek through ever-more transfers to the European Union or through bailouts for Greek debt. Imagine you, as a German, know the average age for a German retiree is 62 while the average Greek is in his retirement villa at age 60. That knowledge explains why northern Europeans may not wish to indulge Greek lifestyles much longer.
If such demands seem absurd in the case of Greeks and Germans, they are apparently seen as acceptable by politicians in Quebec. There, Quebec's three political parties are falling over themselves to invent an even more lavish welfare state. Too bad for Quebec's already heavily-taxed families. But it's also too bad that Quebec political promises are partly paid for by other Canadians.
Some samples of expensive promises: The Coalition Avenir Québec (CAQ) has promised more doctors. Meanwhile, Parti Quebecois leader Pauline Marois has promised that if her party is elected, she would scrap planned (and modest) tuition hikes. She also wants 15,000 more daycare spaces.
The Quebec Liberal party under Premier Jean Charest says it will create a $1-billion fund so Quebec's governments can make "strategic investments" in business (a.k.a., more corporate welfare). Also, Charest pledges to subsidize wages of Quebec workers older than age 55.
If past history is any guide, those and other promises (if implemented) will be paid for by taking more fur from the hide of Quebec's taxpayers. (Charest's government has increased sales taxes.) But the invoices for election promises will also be forwarded to taxpayers outside of Quebec.
Some perspective: In Canada, taxpayers support governments in other provinces through federal transfer programs, including equalization, which is mentioned in the constitution.
For the record, that equalization provision is weak and unenforceable according to constitutional experts such as Peter Hogg and others.
Still, that has never stopped have-not provinces from demanding ever-more from the federal government. Calls have come for higher equalization payments (from have-nots) and from all premiers for more cash from other federal transfer programs.
From 2005/06 (as far back as publicly available Finance department data goes) up to the present year, Quebec has received $56.7 billion or 54 per cent of the $107.4 billion the federal government spent on equalization.
Astonishingly, Quebec's finance minister and even some journalists and policy analysts maintain that other Canadians are not subsidizing Quebec. They argue that because every Canadian pays federal taxes, including those in Quebec, no net subsidies exist.
This is daft. When 10 people show up at a poker table and throw money down, and six leave with the winnings, there has been a net transfer of wealth from four people to the other six.
It's the same with equalization. Six provinces now receive equalization. That leaves taxpayers in four provinces -- British Columbia, Alberta, Saskatchewan and Newfoundland, as losers. They (or more precisely, their governments) walk away from the equalization game with less cash.
Federal transfer payment programs are admittedly confusing. Here's where it gets even more confusing: When all federal transfers beyond equalization are accounted for, Ontario's taxpayers still inject more into the federal system than that province receives back.
The Commission on the Reform of Ontario's Public Services notes that Ontario taxpayers account for 39 per cent of federal tax revenues but the federal government spends only 34 per cent of its revenues in that province.
Some of that difference makes sense. A province with higher unemployment than Ontario is not likely to contribute as much, proportionally, into federal coffers. But it begs this question: are promises made by Quebec's political class defensible when they also cost other Canadians more money?
Answer: Not likely. Let's compare Quebec with the three main "have" provinces under the equalization formula and do so on two Quebec campaign promises: tuition rates and hiring more doctors. Also, let's add Ontario for reasons just noted, (I'll exclude Newfoundland for reasons of space.)
Quebec's undergraduate tuition rates were just $2,519 this past year. That was: 38 per cent of what an Ontario student paid ($6,640); 44 per cent of the cost to a student in Alberta ($5,662); 45 per cent of what a Saskatchewan student paid ($5,601); and 52 per cent of what a B.C. student shelled out ($4,852).
On physician ratios, in 2010, British Columbia and Alberta had 213 and 211 general physicians respectively per 100,000 people; the numbers for Ontario and Saskatchewan were 189 and 169. Meanwhile, the Quebec ratio was 224 general physicians per 100,000 people.
Canadians, especially in provinces where taxpayers are net contributors to federal coffers, should pay close attention to the Quebec election. After all, they'll be paying for a chunk of any expensive promises eventually delivered to Quebec's voters.
Mark Milke is a Senior Fellow at the Fraser Institute
Why is there never any mention of what equalization payments really are and how they are calculated? It's not like if Quebec spends more it receives more payments, the payments are calculated from the revenues the provinces generate to be able to provide similar levels of public service at comparable taxation levels. We all get taxed the same rate from Ottawa, it just redistributes some of the money to equalize the wealth of all provinces. We pay more taxes than anywhere else in Canada(North America even if I'm not mistaken), it's our high taxation rate that gives us are super great social services not the equalization payments.
Don't be jealous ROC, just increase your taxation rate to something comparable to Quebec and you should be able to afford the same kinds of services we enjoy.
http://viableopposition.blogspot.ca/2012/05/quebecs-fiscal-situation-necessity-of.html
The bloggers analysis is quite good regarding the state of Quebec's finances. Quebec does have some work to do with regards to keeping their finances in order.
However, here are a few notes regarding the federal transfers, and why it is not the safety net of Quebec but rather the source of the problem:
1. Please notice that the equalization transfers have not gone up in the last two years. Health and social transfers have. 17B in 2012 of federal contribution. 50B+ in taxes paid from Quebec. Where did the money go?
2. The initial agreement between provinces and the federal government was that the feds contribute around 50% of the healthcare programs, since they recieved 50% of taxation revenue. Health transfers were cut and now represent a fraction of what the initial agreement was. Health contributions are going up less than the cost of healthcare is. Same federal taxes, less value.
3. When Paul Martin and Jean Chretien put federal finances in order, they did so at the expense of the provinces and municipalities. The effects are still felt now in Quebec. Municipal structures have long been a systemic problem in Quebec and this takes time to change (10-20 years). The provinces (all of them) must compensate for what the federal government has taken away.
Federals transfers are not what keeps Quebec afloat. Government spending (federal, provincial, and municipal) and particularly government waste and inefficiencies are what's causing the problem.
Keep repeating the ROC quebec-bashing 'I am being cheated' drivel long enough and soon that 's all peopls seem to believe anymore. Anybody hear about critical thinking?
Citizens living in Quebec contribute around 50B$+ in federal taxes. They only get a portion of that back in the form of equalization payments. Where does the rest of the money go?
A lot of that money goes to support federal programs and pan-canadian initiatives. Who here thinks that the federal government is a lean mean economic machine? Ever hear of corporate overhead? The average overhead is in a federal department is not pretty.
A lot of federal programs are duplicated and overlap provincial responsibilities. This is waste. Quebec runs a lot of it's own programs independantly. Federal agreements with Quebec account for transferring those responsibilities to the province.
Tuition fees are simplistic. It forms only a fraction of the total cost. One must calculate the Total contribution of the province / trained ressource. Alberta is around 8400$ and Quebec is around 8800$, Same.
There are more physicians in Quebec because an emphasis was put on first line intervention instead of the emergency room . It saves money. What is the TC of healthcare/capita in Ontario vs. Quebec?
I may not have all the answers. However, I do think people should start to read more than just small biased media clips and then sputter out an uninformed opinion while baselessly mis-characterizing an important part of the canadian population.
Part of the revenue comes from tuition fees and part of the revenue comes from the provincial government ( which is paid for by taxes wich are paid for by citizens in Quebec directly). Another part comes from contributions/grants from the private sector. Normally there are strings attached with this however.
It has been proven that the higher tuiition fees are, the less the government contributes overall. The pie does not get bigger, it stays the same. Hence the need to calculate total cost.
Universities in Quebec charge full costs and then some to an individual not residing in Quebec, just as other provinces do. It is around 9,000$ -10,000$ if my memory serves.
Most foreign based students come here to study do not pay this amount out of their pocket because we have agreements with other countries that allow them to cover the costs in part. Or they have an exchange program (1 for 1, such as France) in place, which comes to the same. This is no different than in other Universities across Canada.
It has nothing to do with equalization payments and subsidizing foreigners.
$75,000 per family from the ROC JUST in transfer payments, pretty good for them, they could likely teach Greece a few lessons.