It’s all Greek to Quebec

Equalization, Frontier Centre, Quebec (historic), Uncategorized, Worth A Look

 

In Greece, citizens can, on average, retire with a full government pension at the age of 58.

In Germany, the citizens expected to help bail out the bankrupt Greeks must work until the age of 67 before they can retire. Naturally, German citizens are wondering how this can be considered fair. Why should they have to work nine years longer so Greek citizens can live a life of leisure? What’s more, in Germany, most working people pay taxes. In Greece, only 20 per cent pay taxes. Again, unfair. And yet equalization between "have" European Union states and "have not" European Union states continues, even though it’s not making things equal — it’s rewarding laziness, leisure and possibly even criminal tax evasion. Why pay taxes if some hard-working Germans will do it for you? Thus the riots in Greece. They believe they are entitled to those entitlements.

Dysfunctional? You bet. We Canadians would never stand for such a thing. Right? Think again.

Equalization in Canada was established to ensure that "have-not" regions could enjoy the same programs as "have" regions and most Canadians wouldn’t quibble with that. But that has not happened. In fact, the reverse has occurred. The have provinces have fewer services than the have-nots.

In Quebec — which opted out of the Canada Pension Plan and administers its own pension plan — citizens can retire with a full pension at age 62. In the rest of Canada, the age contributors can receive full benefits is 65.

In light of the fact that Quebec received $8.6 billion in equalization payments in 2010-11 out of a total equalization pot of $14.4 billion, it’s safe to say that citizens in Canada’s "have" provinces — British Columbia, Alberta and Ontario — are paying for Quebecers’ early retirement, as theirs is the only province which has such a generous, early retirement benefit.

In other words, equalization is not very equal.

What’s more, Quebecers can take advantage of $7-a-day day care, whereas, in most other provinces, $7 wouldn’t even buy you an hour of day care or babysitting.

Quebec has a very generous pharmaceutical program unlike any other in the country and Quebec university students pay considerably less for tuition within Quebec than students from anywhere else in the country.

For instance, to attend McGill University in 2010, Quebec students pay $3,475 for tuition and fees. An out-of-province student attending McGill pays $7,008, or $3,533 more than a Quebec student — more than double! Five of the six cheapest universities in Canada are in Quebec — but they’re only the cheapest for Quebecers. Those same universities are among the most expensive in Canada for non-Quebecers.

Sherbrooke has the lowest university tuition and fees in the entire country — but again, only for Quebecers, who pay just $2,381. To attend the same university, a non-Quebecer, from Alberta, for instance, must pay $5,914 or $3,533 more than his Quebec colleague. In other words, when that Alberta student works through the summer in Alberta to save up for tuition and living expenses, the taxes he or she will pay will actually help subsidize the Quebec student’s tuition.

Lately, Quebecers, like Conservative MP Maxime Bernier, have criticized Quebec’s overreliance on equalization, saying Quebecers are "spoiled children."

But that’s got Quebec’s Liberal provincial government fighting back. In its 2010-11 budget document, the Jean Charest government is actually arguing that it should receive even more equalization than it’s getting because Alberta’s oil industry is keeping the Canadian dollar high, which in turn harms Quebec’s manufacturing sector. This is not a joke.

"A rise in the world price of a barrel of oil favours provinces that have that resource," states the budget document in Section E.

"However, the rise in the Canadian dollar that accompanies the rising price of oil hampers the exports of the other provinces. An adequate equalization program can mitigate this phenomenon by increasing the revenues of provinces that are negatively affected by the rise in the dollar, without reducing the revenues of provinces that benefit from the higher price of oil."

In other words, Quebec, which received $8.6 billion of the $14.4 billion doled out in equalization this year, is arguing that it’s not enough! It wants more and it blames Alberta’s oil industry for its troubles. It’s a curious argument since it can be argued that Alberta’s oil industry is literally fuelling Canada’s economy and largely provided the money that was sent as equalization to Quebec in the first place.

In 2007, the last year Statistics Canada figures are available for all provinces, B.C., Alberta and Ontario were the only provinces that paid more into Confederation than they received. Alberta paid a total of $37.064 billion in taxes and transfers to the federal government and the feds returned $17.567 billion in services and programs, meaning that Alberta contributed $19.5 billion net to the rest of Canada.

But Charest, who complained in Copenhagen that Alberta’s oilsands industry "embarrassed" him, is actually making the argument that despite Alberta’s largesse, it’s to blame for the trouble Quebec is in.
In short, it’s all Greek to Quebec — and that’s frightening.