Canada’s best source for informed, lively commentary and
analysis on the issues facing the country — and the world.


Economy

 
 

Quebec’s Quiet Revolution, 50 years later

by Pierre Fortin

When Jean Lesage and his équipe du tonnerre came to power in 1960, two thirds of young adults in Quebec didn’t have high school diplomas.1 Throughout the 1950s the Quebec economy had surfed on the global postwar expansion, but Quebec had not been able to narrow the 20 per cent gap between its standard of living and that of neighbouring Ontario.2 Although francophones made up 80 per cent of Quebec’s population, only 47 per cent of Quebecers were employed in francophone-owned businesses.3 When writer Pierre Vallières called French Canadians the “white niggers of America” in 1968, he was widely dismissed for making a ridiculous overstatement. In fact, he was telling the truth. In 1960, French-origin men earned less relative to British-origin men in Quebec (52 per cent) than black men did relative to white men in the United States (54 per cent).4

To his credit, Lesage insisted that improving the relative economic position of francophone Quebecers was urgent. Here is an excerpt from his April 1962 budget speech:

We constitute an ethnic minority that has been able to survive till now, but whose material power is far from corresponding to that of our English compatriots. In certain fields, we have accumulated the delays of at least one generation. It is for this reason that we have so much to accomplish today and that we have to realize it so quickly. We possess a common lever, the state of Quebec. We would be guilty if we did not use it … The needs of our people can be grouped in three categories: those that arise from the effort that we should make in matters of education and culture, those that arise from the necessity of increasing the welfare and health of our population and those that are connected with the development of our economy.5

Lesage used the provincial government to achieve four goals:

  • raise the general level of schooling,
  • accelerate economic development,
  • share the increased income widely, and
  • improve the relative economic position of francophones.
With the passage of half a century, it is a good time to ask whether the goals of the Quiet Revolution have been broadly achieved. In sum, the answer is yes.

With the passage of half a century, it is a good time to ask whether these goals have been broadly achieved. In sum, the answer is yes. In what follows, I lay out evidence that the goals have been realized, largely as a result of the active role played by the Quebec provincial government during and after Lesage’s terms in office. At the end, I mention a few areas where more progress has to be made, and a number of new problems that remain to be addressed.

Quebec government activity has expanded greatly

Lesage’s deeds matched his words. A long-delayed set of accelerated changes took place during his two terms in office from 1960 to 1966. Political scientist Dale Thompson was the first to describe this as the Quiet Revolution.6 This period has left a lasting imprint on Quebec’s institutions and shaped the culture of the entire generation of baby-boomers that was entering adult life in the 1960s.

Beginning in 1960, government activity increased rapidly. The provincial public service was modernized and allowed to unionize and expand. Education and health were secularized, professionalized and centralized. New programs were launched, such as hospital insurance (a federal-provincial shared-cost program), school allowances and the Quebec Pension Plan. Regional high schools were launched throughout the province. A host of state enterprises were created, such as the Société Générale de Financement (SGF), the steel company (Sidbec), the Société Québécoise d’Exploration Minière (SOQUEM) and the Caisse de Dépôt et Placement du Québec (CDPQ). In 1963, all large private power companies were nationalized, enabling the old Hydroelectric Commission to be transformed into modern-day Hydro-Quebec.

From 1960 to 1966 provincial government expenditures and tax revenues tripled, while gross domestic income increased by 65 per cent. The rapid change in institutions coupled with the sharp increase in the tax burden generated a voter backlash that led Lesage to electoral defeat in 1966. Out went “Ti-Jean la taxe,” as he was called during the campaign.

Nevertheless, after 1966 the new Union Nationale Premier, Daniel Johnson, Sr., and his successors decided to carry on with the Quiet Revolution. From 1966 until today, Quebecers’ lives have been changed by family allowances, health insurance and social assistance (two additional federal-provincial shared-cost programs), the development of Cégeps, many more new state enterprises (SOQUIP, SOQUIA, REXFOR, Loto Quebec, National Asbestos Corporation, Madelipêche, Nouveler, Quebecair, among others), the James Bay hydroelectric project, language legislation to protect French within the province, no-fault automobile insurance, provincial economic summits, many forms of financial assistance to business, a few privatizations, support for the Free Trade Agreement with the United States, a large number of tax credits, and a new wave of social programs in the 1990s.

Figure 1 summarizes the impact all these measures have had on total provincial and local government (P&L) expenditure from 1961 to 2007.7 From 13 per cent in 1961, Quebec’s P&L spending increased to 34 per cent of GDP in the mid-1980s, and it has hovered around this level ever since. From the same starting point in 1961, Ontario’s P&L spending has stabilized around 24 per cent of provincial GDP, 10 points below the Quebec statistic. Put another way, Quebec’s P&L expenditure in 2007 was $30 billion more than if the province had spent at the same rate as Ontario.8 Consistent with its high ratio of P&L spending to GDP, total taxes paid by Quebecers to all levels of government amounted to 38 per cent of GDP in 2008, compared to 30 per cent in provinces other than Quebec.

An interesting question is how much of the excess of Quebec’s P&L spending over the national average has been financed from own-

 

 

 

 

 

 

source revenues and how much has come from above-average federal transfers. The answer for 2007 is that 84 per cent came from own-source revenues and 16 per cent from above-average federal transfers.9 In contrast, for the three Maritime provinces, 5 per cent of above-average P&L spending came from own-source revenue and 95 per cent from above-average federal transfers.

Quebec’s educational attainment now matches the national average

How effective has expanded government activity been in helping Quebec achieve the goals set by Lesage? Table 1 shows that Quebec’s average level of schooling was more than a year under the national average 50 years ago; by 2001 it had closed the gap.

Table 2 compares educational attainment of the 25−44 population in Quebec and Ontario, the best-performing province. Basically, Quebec is weaker in the tails, but it is stronger in the middle. First, Quebecers are more likely to lack a high school certificate than Ontarians (11 vs. 7 per cent). This is particularly significant since it takes 11 years to complete high school in Quebec and 12 in Ontario. Second, a smaller percentage of Quebecers than Ontarians hold university degrees (30 vs. 34 per cent). However, Quebecers are in the lead at the trades and college level (43 vs. 35 per cent), which includes vocational, college and technical studies. As a result, the probability of having some form of postsecondary training beyond high school is higher in Quebec than in Ontario (73 vs. 69 per cent).

What about the quality of education? Table 3 summarizes the evidence from the 2009 study of student skills at age 15 conducted by the OECD Programme for International Student Assessment (PISA). It turns out that youth from the four largest Canadian provinces (including Quebec) are doing well in reading, mathematics and science relative to those from the United States and other countries. Among provinces, Alberta is first in reading and science, and Quebec is the best in mathematics.

To sum up, while the quantity and quality of education in Quebec can still be improved, among Canadian regions the province is no longer the laggard it was 50 years ago when Lesage launched the Quiet Revolution. Moreover, since education is a provincial responsibility under the Canadian constitution, credit for closing the educational gap lies essentially with the policies and institutions Quebec itself has put in place over the last 50 years. Major challenges remain: reducing the high school dropout rate (among francophone boys in particular) and increasing the university graduation rate further.

Quebec’s standard of living has caught up with Ontario’s

A key concern of Premier Lesage was economic development. His objective was to develop the economy so that Quebec’s standard of living could one day catch up with that of its “English compatriots.” Has this challenge been met in the last 50 years?

Figure 2 answers this question affirmatively, taking Ontario as the economic reference as most public documents did in the 1960s. It shows that Quebec’s standard of living increased from 81 per cent of Ontario’s in 1961 to 96 per cent in 2009.10 During the first 30 years, progress was slow and rocky. In particular, the temporary “bubble” in 1976−84 was a consequence of the James Bay megaproject. In 1989, the Quebec/Ontario ratio was 85 per cent, still only 4 points above the 1961 level. But over the next 20-year period, Quebec gained 11 points, reaching 96 per cent in 2009. The remaining 4-point gap can be explained by the fact that Quebecers choose to work fewer hours per capita than Ontarians. They have shorter work weeks, more holidays, more leaves and longer vacations, and they retire earlier. La joie de vivre is a choice that has a cost. But in a basic sense, the two provinces are on a par in standard of living.

The surge in Quebec’s relative standard of living after 1989 is not the result of fast-growing output per worker (productivity), but of rapid increase in the employment rate (proportion of people aged 15 and over with jobs). Quebec’s employment rate increased from 86 per cent of Ontario’s in 1989 to exact parity with Ontario’s in 2010.11 Given the close connection between rising educational attainment and employment, and given that it requires decades to raise the education level of an entire population, much of this development can be seen as a delayed consequence of the Quiet Revolution. The “culture” of the Quiet Revolution has also produced progressive legislation such as low-fee childcare and the Parental Insurance Plan. Both programs are popular and have pushed Quebec women’s labour force participation in the 25−54 age group above the national average.12 Another “cultural” factor to appreciate is that, after a string of major labour conflicts between 1972 and 1983, Quebecers have now learned to manage peacefully the system of industrial relations put in place by the Quiet Revolution.

Given that from now on aging will reduce the employed fraction of Quebec’s population, future advances in standard of living will crucially depend on what happens on the productivity front. So far, Quebec’s performance on this score is not impressive. Although currently 5 per cent higher than Ontario’s,13 its productivity level is 16 per cent lower than that of the United States. It is also far behind productivity levels of countries such as France, Germany, Norway, the Netherlands and Belgium.

There is less poverty and income inequality in Quebec than elsewhere

“Increasing the welfare and health of our population” was another stated objective of the Lesage government. How successful has Quebec been in building its welfare state since then?

According to data reported in table 4, Quebec has arguably become the most egalitarian society in North America. Whether in absolute or relative terms, there is generally less poverty in Quebec than elsewhere in Canada and the United States. Among Canadian provinces, only Alberta has an absolute poverty rate (7.4 per cent) lower than Quebec’s (8.5 per cent). This difference is small in view of the fact that real income per capita in the oil-rich province is 60 per cent higher. Broad measures of income inequality reported in table 4, such as the Gini coefficient and the top 1 per cent income share, give the same message: there is less inequality in Quebec.

The fact that there is less poverty and income inequality in Quebec – even as the province is far from being one of the richest jurisdictions in North America – suggests that its tax/transfer system must, by design, be more redistributive than that of other jurisdictions. Table 5 shows that this is indeed the case. The two left-hand columns report that market income for the lowest quintile is lower in Quebec than in other provinces. However, once government transfers are added and income taxes subtracted, the poorest 20 per cent wind up with greater purchasing power in Quebec than in other parts of the country.14 The implication of this redistributive effort is that Quebec’s income tax system must be more progressive. This is illustrated by the two right-hand columns of table 5: among the highest-earning fifth of Quebecers and Canadians overall, both groups pay the same tax rate (21 per cent), despite Quebecers’ market incomes in this group being 15 per cent lower.

Quebec’s tax, transfer and social policies have their roots in the Quiet Revolution of the 1960s. They reflect Lesage’s vision as well as the shared social democratic bent of his Liberal and Parti Québécois successors. Even as the welfare state was pronounced dead in conservative circles around the world in the 1990s, Quebec’s état providence was beginning a second life with a new wave of social programs such as universal drug insurance, low-fee childcare, extended parental leaves, new family allowances and pay equity. Given population aging and the current state of public finances, the challenge from now on will probably be to pay for and maintain these programs rather than to adopt new ones.

The relative economic position of francophones has been normalized

Lesage was concerned not only with economic development of Quebec overall, but with the relative position of francophones within the province. Has their position improved in the last 50 years?

Unambiguously yes. There are two dimensions to consider: relative earnings and business ownership. On the first, table 6 reports that 2000 earnings of Quebec francophones were equal to or greater than earnings of anglophones of the same gender, language skills, level of education, number of years of experience and number of weeks worked. This is a far cry from the 52 per cent ratio of wages of French-origin to British-origin men in Quebec in 1960. Faster economic integration of allophones, particularly those who are unilingual, remains a major challenge.

On the second dimension, François and Luc Vaillancourt have estimated that francophone-owned businesses in Quebec increased their share of provincial employment from 47 per cent in 1961 to 67 per cent in 2003.15 They found that foreign control over provincial employment was 10 per cent. This implies that, foreign-owned firms aside, 75 per cent of domestic Canadian control over Quebec employment derives from francophone-owned firms – not far from the francophone percentage in Quebec’s population (80 per cent). Taking foreign ownership as a given, Quebec francophones have become maîtres chez eux.

Challenges remain, and new ones have arisen

Fifty years ago, Jean Lesage launched the Quiet Revolution. His basic goal was the modernization – the mise à jour – ofQuebec society. He wanted to use the provincial government to raise the level of schooling, accelerate economic development, share the increased income widely and improve the relative economic position of francophones.

The origin of progress can be found in the Quiet Revolution − in the culture and institutions it put in place in the first half of the 1960s, and in the inspiration it gave Lesage’s successors.

The goals Lesage set out have been met to a large extent. Government activity has expanded greatly; educational attainment is up to the national average; the standard of living has caught up with Ontario’s; there is less poverty and income inequality than elsewhere in North America; and the relative economic position of francophones has been normalized. In each case, the origin of progress can be found in the Quiet Revolution − in the culture and institutions it put in place in the first half of the 1960s, and in the inspiration it gave Lesage’s successors. There is no question that national and international factors have simultaneously influenced Quebec’s evolution during the last half century, but the conclusion that the Quiet Revolution has played a cardinal role is inescapable.

Naturally, there is more to accomplish. In education, there remain the important tasks of reducing the high school dropout rate (particularly for francophone boys) and increasing the university graduation rate. In the economy, the main challenges are to increase productivity (while showing respect for the environment), remain a sharing society, pay the bills of existing programs before adding new ones, and facilitate the economic integration of immigrants and Aboriginals.

There are also new problems to address. Lesage had high hopes for what the “state of Quebec” could accomplish. And indeed the provincial “state” has helped Quebec reach the goals Lesage set out. But 50 years later, the reach of the provincial government into every corner of Quebec life has become a cause for concern. Although more peaceful than in the 1970s and 1980s, labour relations in the public sector are still very adversarial. Administrative, professional and union bureaucracies block the slightest proposed change in the health and education sectors. Bridges and overpasses threaten to collapse, and human lives have been lost in a few incidents. Too many teenagers drop out of high school. Timely access to health care seems out of reach despite billions of additional dollars being poured into the sector each year. Public construction projects are rarely completed on schedule or within budget. Rumours of corruption in politics and construction are widespread. Interest group lobbyists are everywhere, extracting maximum benefits for their clients at the expense of taxpayers. The government is the wet nurse of businesses and the Santa Claus of regions. Large protected sectors such as electricity, agriculture, health and construction post disturbingly high production costs.

Welcome to the 21st century.

Pierre Fortin is Professor of Economics at the Université du Québec à Montréal.

Notes

1 Data are for population aged 25 to 34. In Ontario and other provinces, the percentage without a high school degree was 49 per cent. Statistics Canada’s CANSIM table 282-0004 gives the educational attainment of the 55−64 age group in 1990, which should be the same as that of the 25−34 age group in 1960.

2 From 1947 to 1960, the average growth rate of net-of-transfer personal income per capita was 5.0 per cent in both Quebec and Ontario. As a result, the Quebec level adjusted for purchasing power parity remained unchanged at around 80 per cent of the Ontario level. The data are from CANSIM tables 380-0043, 380-0047 and 380-0050.

3 From François Vaillancourt, Dominique Lemay and Luc Vaillancourt, Laggards No More: The Changed Socioeconomic Status of Francophones in Quebec, Backgrounder No. 103 (Toronto: C.D. Howe Institute, 2007), table 5.

4 The Quebec figure is from Vaillancourt, Lemay and Vaillancourt, Laggards No More, footnote 2. The U.S. figure is from David Card and Alan Krueger, “Trends in relative black-white earnings revisited,” American Economic Review, Vol. 83, No. 2 (May 1993), pp. 85−91.

5 Quebec, Budget Speech, Delivered on April 12, 1962 (Quebec City, 1962), pp. 37, 39.

6 Dale C. Thomson, Jean Lesage and the Quiet Revolution (Toronto: Macmillan, 1984).

7 Total P&L expenditure is defined here as nonfederal current and capital expenditure. It includes Canada and Quebec Pension Plan benefits and capital spending by government. Given that the responsibilities of local governments differ across provinces, meaningful interprovincial comparisons have to be based on the aggregate P&L sector.

8 The 2007 P&L expenditure/GDP ratio was 29 per cent in Atlantic Canada, 23 per cent in British Columbia and 18 per cent in the Prairies.

9 In this calculation, federal transfers to Quebec include the value of the tax abatement granted by the federal government to Quebec taxpayers in lieu of an equal amount of transfers to the government of Quebec. The data are from Statistics Canada’s CANSIM tables 384-0002 and 384-0004 and Canada Revenue Agency, Final Statistics, 2009 edition (for 2007 tax year).

10 The standard of living in figure 2 is defined as real domestic income per capita. Real domestic income is equal to gross domestic product (GDP) divided by the average price of what people buy, which includes private and public consumption and investment goods and services. This average price is allowed to differ between the two provinces. “Per capita” means that the result is divided by total population.

11 To avoid any purely demographic distortion caused by the 65-and-over population, the employment rate is defined here as total employment of the 15-and-over population as a percentage of the 15−64 population.

12 In 2010, the labour force participation rate of women aged 25 to 54 was 83.6 per cent in Quebec, 82.3 per cent in Ontario and 81.5 per cent in all other provinces.

13 In purchasing-power-adjusted U.S. dollars, productivity levels (GDP per work hour) in 2009 were $53.10 in the United States, $44.80 in Quebec and $42.60 in Ontario. This implies that Quebec leads Ontario by 5 per cent, but lags behind the United States by 16 per cent.

14 Low-income Quebecers also have access to greater amounts and variety of public goods and services than other low-income Canadians.

15 François Vaillancourt and Luc Vaillancourt, La propriété des employeurs au Québec en 2003 selon le groupe d’appartenance linguistique (Quebec City: Conseil Supérieur de la Langue Française, 2005), table 3.1.

 

 

To see the full text of Inroads articles on the web you must Login as, or Register to become, an Online subscriber.

Existing print subscribers should Register and select Existing Subscriber option. We will manually verify your account and then activate it accordingly.

This content is available for purchase for non-members.

Purchase Only



About the Author

Pierre Fortin
Pierre Fortin is Professor of Economics at the Université du Québec à Montréal.




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *