N_Fiddledog N_Fiddledog:
Tax money is fungible. Quebec can put the tax money it gets from givers to send to takers wherever it's little socialist heart desires. But somebody still has to give so that the Quebec government can take. Even if a lesser amount of that giver money per capita does come from Quebec giver taxpayers themselves. (Lesser because there are fewer actual givers per capita.)
In any case this changes nothing in a general sense of givers complaining about takers. It still justifies complaint towards the pandered brats who don't know enough to just say thank you. The giver provinces have a couple more givers per capita is all. But yeah Quebec givers, feel free to join in.
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Actually the Quebec students do have a point in that they are paying way too much for the courses they're probably taking. The courses that allow them to believe they're doing something worthwhile by being out there troublemaking on the streets. Those courses are worthless.
Um, you do realize that the Quebec government under Philippe Couillard is trying to get the province's costs under control, right?$1:
Provincial budgets reversed: Alberta expects deficit, Quebec to see growth
LES PERREAUX AND JUSTIN GIOVANNETTI
Between the two budgets this week in Quebec and Alberta, one will show a deficit and dim immediate economic prospects as the province struggles to wrangle sacred cows chewing away at public finances.
The other will be Quebec.
The crash in oil prices and Quebec’s determined effort to improve its fiscal health will turn the usual order of provincial finances upside-down – at least for the short term – when the two provinces present their budgets on Thursday.
Alberta is expected to report a deficit of up to $7-billion and an economy bordering on recession. Quebec has promised a balanced budget and decent economic growth, with surpluses on the immediate horizon.
“It’s amazing what a $60 slide in oil prices will do,” said Robert Kavcic, a specialist in provincial economics at the Bank of Montreal. “In Alberta, the slide in oil is the story. In Quebec, they’ve been pushing restraint for a few years now, and got much more serious about it with the majority government. And it’s a pretty stiff dose of restraint.”
Heavily taxed, deep in debt and reliant on equalization payments from Ottawa, Quebec has long been seen as the financial hardship case among provinces. Awash in oil revenue, Alberta traditionally spends a lot but keeps taxes low.
Alberta Premier Jim Prentice, in a televised address on Tuesday night, promised his province was at a turning point. The economic dynamo that had led the country in growth now faces a shortfall that could top $20-billion over the next three years. Adding embarrassment, government spending has grown quickly and Alberta posted a string of deficits during the good times of the past decade.
“How on earth did we get here?” Mr. Prentice asked during a 16-minute pre-recorded address. “We hid from difficult decisions and we used our children’s inheritance to pay for it.”
Quebec has cut a number of programs that previously seemed untouchable. Along with a near-freeze on overall spending, Finance Minister Carlos Leitao froze hiring in the public service, increased fees on the provincial daycare system and cut publicly financed in-vitro fertilization. Cheaper oil has put money in the pockets of Quebec consumers, while the weaker dollar helps the province’s exports.
Alberta has some of Canada’s most expensive public services, but its residents pay the lowest taxes. To make up for the difference, Alberta has used energy royalties for decades to fund annual operations. As a result, it has put little in its rainy-day fund since the 1980s.
A TD bank report last week said the province faces the prospect of long-term deficits because it relies too much on oil and gas revenue. Economists say Alberta has chosen about the least effective way to collect taxes.
Mr. Prentice is vowing to change that with a 10-year plan that will shift the province away from what the Premier calls an “addiction” to energy royalties. Alberta will begin depositing energy royalties back into the province’s savings account after balancing the books in 2017. Eventually, Mr. Prentice would like to deposit half of each year’s haul into Alberta’s Heritage Fund.
In the absence of energy money, Alberta will need to start taxing more like a regular province again, but Mr. Prentice has made it clear he will never cede the Alberta Advantage of lower taxes. A provincial sales tax remains out of the question. He did announce Tuesday that Albertans would begin paying directly for health care again through a new tax or premium.
Finance Minister Robin Campbell has announced that he will effectively cut 9 per cent from the province’s spending.
A province-wide consultation showed most Albertans were open to higher personal income and corporate taxes. Despite it being anathema to the province’s ruling Tories, 48 per cent polled by the government backed the introduction of a sales tax.
Quebec still faces a steeper long-term challenge than Alberta. Quebec’s working-age population actually began to decline last year, putting the province at the forefront of a demographic crunch Canada faces as the baby boom generation heads off to retirement. Quebec is also saddled with a net debt that is about 50 per cent of gross domestic product, while Alberta will probably remain free of debt for at least a couple more years.
“As bad as it’s going to look for Alberta this year, the bigger picture is that Quebec is still in a much tougher situation over the long haul,” Mr. Kavcic said.
Quebec is considering a major overhaul of its tax system that would include boosting consumption taxes such as the provincial sales tax. Pushing the tax burden toward consumption and away from progressive income taxes may please economists such as Mr. Leitao, but it is sure to meet resistance in Quebec, where small daily protests have already started against Liberal austerity.
The province hired economist Luc Godbout to lead an examination of how the province collects money. Last week, he recommended the shift to consumption taxes and user fees saying corporate and income taxes that stifle economic growth. Mr. Godbout said the move would put hundreds of millions of dollars in taxpayers’ pockets and boost the economy.
Mr. Leitao said he views the report favourably but a wider discussion is required before the report is adopted wholesale. The province is expected to follow one recommendation and eliminate the $200-per-person health tax over several years.
“We often say Quebec has a weaker economy than its neighbours, one reason is our tax burden is heavy and poorly aimed. Heavy, because people pay a lot of taxes, and also because it sends the wrong signals,” Mr. Leitao said this week.
And now, conservative economist Stephen Gordon's take on the issue...$1:
It’s hard to avoid nautical metaphors when talking about budgets. Governments are large, and their momentum is such that the people in charge can only make minor changes in speed and direction at any point in time. The recession blew Quebec’s public finances off course, and the Couillard government’s second budget is best viewed as part of the long, slow process of restoring its original trajectory. There are no sharp turns in this budget; just minor adjustments whose effects won’t be noticed right away.
Quebec budget is deficit-free for the first time in seven years — ‘but many great challenges still lie ahead’
The government in Quebec City has been more aggressive in deficit elimination than its counterparts in other capitals, and with good reason. Although the actual deficits are have been modest – $12.9 billion over the past six years, compared with $72.3 billion in Ontario and $145 billion in Ottawa – Quebec’s debt was already uncomfortably large even before the 2008-09 financial crisis, and its debt-to-GDP ratio is still the highest in the country.
Since Quebec didn’t have the luxury of waiting for economic growth to fuel a rebound in revenues, successive governments – both Liberal and PQ – raised taxes sharply. Own-source revenues (that is, not including transfers from Ottawa) increased from 17.5% of Quebec GDP in 2008 to 19.5% in 2015.
The first Couillard budget was a course correction in that it addressed spending, which had also been growing faster than the economy. By 2014, the ratio of expenditures to GDP had overtaken the levels that led to the austerity measures implemented by Lucien Bouchard’s PQ government in the 1990s. Although spending levels continued to increase, their growth rates were reduced sharply: from 5.1% in 2013-14 to 2.3% in 2014-15, and to 1.5% in the coming year.
Holding the line on spending – and avoiding swinging cuts – is a tactic familiar to observers in Ottawa. The difference is that while the federal Conservatives have reduced spending-GDP ratios to levels not seen in generations, the announced goal of the Quebec Liberals is to reduce the ratio to what it was before the financial crisis.
On the revenue side, comparisons with Alberta and Ottawa are inevitable, and perhaps surprising. If lower oil prices are very bad news for Edmonton and a somewhat smaller net negative for Ottawa, the effect is unambiguously positive for Quebec: a savings of more than $4 billion in the cost of oil imports alone. This improved outlook goes some way in explaining why the Liberals have not (yet) adopted the Godbout Report’s recommendation of increasing the Quebec Sales Tax, and have even introduced some modest tax cuts. The budget implements some of the report’s measures to reduce taxes, including the phasing out of the Health Tax and the reduction in corporate taxes.
There is much talk in the budget and related documents about structural reform, and it’s easy to be cynical: all attempts to reduce the size of government are accompanied with assurances that a well-calibrated reorganization of the public service will deliver the same level of services at lower cost. That said, there are some welcome initiatives, notably in how tax expenditures – that is, deductions and special treatments that reduce revenues but don’t show up as spending. The budget announces an ‘offsetting mechanism’, under which new expenditures must be accompanied by an equivalent cut elsewhere, and this will also apply to tax expenditures. Tax expenditures will also be subject to periodic evaluation and included in the budget documents. Many of these measures end up staying on the books long after they stopped being useful, encrusting the tax code like so many barnacles. If Quebec follows through on this, it could set a welcome precedent for other governments to follow.
Population aging is a recurrent theme in the Quebec budget: the number of people who are of normal working age is in decline. The tax credit for workers near or over the age of 65 has been re-instituted, and there is also a ‘tax shield’ for people in lower- and middle-income families. One of the side-effects of Quebec’s relatively generous system of transfers is that many people in low-income families face punitive marginal effective tax rates. As employment incomes increase, many means-tested benefits get clawed back. This reduces the gains from working more, and can even eliminate them completely. The ‘tax shield’ attenuates this effect, the idea being that greater returns to working will increase the supply of labour.
What is missing is the sense of urgency that we’ve come to expect from budgets in the post-recession years. Although there are ritual commitments to job creation in the form of a Maritime Strategy, a resurrected Plan Nord and various ‘regional development’ programs, the focus is on long-term structural reform, not short-term stimulus. The Couillard government knows that it has four years and five budgets to get where it wants to go. It can take its time.
The government is enacting periodic reviews of the tax code, cutting the provincial health and corporate taxes, and (if you follow the link in the article itself) has posted a budget with no deficit.
Note too that this isn't the first time Quebec has done this-as the article notes, Quebec under Lucien Bouchard was right there with the rest of us in cutting spending and getting its finances under control. Ten year ago, during the summer I spent in Jonquière as part of a student exchange program I saw a number of university posters protesting Jean Charest's cuts. In fact, 30 years ago Quebec under René Lévesque was actually ahead of the pack in deficit reduction, cutting government spending a good 10-12 years before Mike Harris, Preston Manning and Ralph Klein made a push for it in the rest of the country.
So while Quebec has had higher taxes and spending than other parts of Canada, the Quebecois have also shown themselves to just as capable of cutting government spending as the rest of us.
CKA Super Elite 
