Last October, 12 Quebecers of various professional backgrounds and political affiliations, led by former premier Lucien Bouchard, released a manifesto entitled For a Clear-Eyed Vision of Quebec (Pour un Québec lucide in French). While it acknowledged the huge progress made by Quebec society since the Quiet Revolution, the manifesto also raised concerns about Quebec’s future as a vibrant and prosperous modern society as it confronts demographic decline, growing public debt, mounting foreign competition, institutional gridlock and a general unwillingness to face reality.
The outpouring of opinion which followed our call to arms exceeded our wildest expectations. Some of the hysterically negative reactions clearly illustrated one of our key points: in a society which sometimes gives the distinct impression of having lost the ability to conduct important public debates in an orderly manner, distorting people’s views and branding them as nefarious neoconservatives is becoming the standard way of dealing with unwelcome realities.
But the overwhelmingly positive response of huge segments of that silent majority which does not parade on talk shows or write in the op-ed pages of Le Devoir has encouraged us to keep finding new ways of spreading our message of realism and renewal. We were even indirectly responsible for helping a brand new left-wing party called Québec Solidaire find its name. It comes directly from the title of a countermanifesto, Manifeste pour un Québec solidaire, issued in response to ours.
So the first thing to do is to set the record straight. All those who signed our manifesto, if I may be allowed to put forward my interpretation of where they stand, recognize the tremendous achievements made since the 1960s in Quebec. Not one of us proposes dismantling the “modèle québécois” of development. Not one of us believes that sacrifices should be made only by a particular segment of our society. Not one of us believes that our informal group has a monopoly on lucidity. But neither do we believe that anyone else has a monopoly on social justice.
We were criticized because legitimate standard-bearers of various segments of Quebec society were not invited to sign the manifesto. But we never claimed to represent all of Quebec – or anyone but ourselves. I wonder who, other than the elected members of our National Assembly, could claim that he or she represents the real Quebec.
We were also accused of downplaying the importance of Quebec’s political status. Again not true. We affirmed that deciding whether Quebec should stay in Canada is of course a fundamental question; we simply said that it is wishful thinking to believe that either achieving sovereignty or staying as a province within Canada will, in and of itself, spare us from very difficult collective decisions.
Our message is that Quebecers don’t realize the challenges facing us, especially those linked to globalization and demographic decline. The world around us is changing, and Quebec is mortgaging its future if it doesn’t act now. What sort of society, we asked, will we hand to those who come after us?
While the solutions we put forward can certainly be discussed and criticized, not one of the pillars of our diagnosis has been seriously challenged. All solutions will indeed be painful and require great political courage. But those who rejected them out of hand came forward either with no remedies of their own or with proposals that would make the situation even worse. This is clearly the case of the authors of the Solidaire manifesto, presented as an alternative vision to ours. It is difficult to find much common ground between the two manifestos.
The crucial difference between us is that we start by acknowledging growing public debt as a serious problem to be addressed immediately; they deny it. Hence they call for massive investments in our public services. We just don’t see where the money would come from given the current level of taxation in Quebec. They admit that the government of Quebec faces enormous and growing difficulties in simply making ends meet – one would have to be blind and deaf not to admit that – but this doesn’t stop them from insisting on even higher public spending.
We do seem to share the same concern regarding Quebec’s rapidly aging population and very low birthrate, but I don’t recall seeing any suggestion on their part on how to deal with the most immediate consequences: huge pressures on social spending and, at the same time, a shrinking tax-paying workforce.
A few basic truths
We continue to welcome honest and frank debate, but such debate cannot take place if basic truths are ignored. For instance, we are told that a public debt which accounts for 44 per cent of our GDP (by far the highest of any Canadian province) is nothing to worry about. But once you include Quebec’s share of the federal debt, that ratio is over 80 per cent – which means that Quebec carries the fifth heaviest debt burden among OECD countries.
Respected economist and former Quebec Premier Jacques Parizeau gave credence to the Solidaires’ claim that Quebec’s public debt is not a matter for real concern because debt-to-GDP ratio has been declining these last few years. This is true but irrelevant. The debt-to-GDP ratio has been declining very slowly – by an average of less than one percentage point per year. Interest payments on the public debt continue to gobble up close to one in eight dollars of public spending. We need to pay down the debt now so that there will be room to cushion the future budgetary impact of simultaneously rising social spending and shrinking government revenue.
We were also told that Quebec’s GDP has more than doubled in the last 20 years or so. The implication is that Quebec produces more than enough wealth and that wealth redistribution should be the real issue. The only problem is that two thirds of that increase reflects inflation, which took place in Quebec as it did everywhere else. The painful fact is that Quebec does not produce enough wealth to meet rising needs, let alone to embark on an ambitious new program of wealth redistribution.
The Solidaires refer to certain low tax rates on corporate profits and make the false claim that Quebec has become a northern “fiscal paradise” for business. On top of taxes on profits there are capital taxes, payroll taxes and health care funding taxes. When all taxes are taken into account, the overall tax burden on businesses in Quebec was 3.1 percentage points below the G7 average in 1985; it climbed above the G7 average starting in 1998. Similarly, much is made of the fact that half of all Quebec firms don’t pay any taxes on their profits. Shocking – until you realize that this is because half of Quebec firms don’t make any profits. It is a fact of life that many businesses in modern capitalist societies either fail or barely survive, and only a minority truly prosper.
Most of these assertions by the Solidaires are beside the point.We Lucides never said that business should escape its fair share of the tax burden. Yes, tax evasion does exist, but it is wildly unrealistic to claim that it could ever be completely eliminated, and delusional to suggest that there are hidden billions of dollars to be scooped if only we had the courage to do so.
We are told that the wealthy don’t pay their fair share of income taxes. The last time I checked, only some 2 per cent of Quebecers earned more than $100,000 per year and they account for almost 25 per cent of total income taxes collected by the government of Quebec.
Those who earn between $40,000 and $100,000 per year account for some 20 per cent of all taxpayers but provide approximately 51 per cent of total income tax revenue. Can one truly blame this middle class for feeling that it carries the entire weight of our welfare state – of which we are rightly proud – on their shoulders? That leaves some 40 per cent of Quebecers who don’t pay any income taxes. How much should we be impressed, then, by public opinion polls that show more Quebecers in favour of additional spending on health care rather than cutting taxes?
It is also misleading to imply that more and more people are falling into a poverty trap. One poor person is one too many, but the percentage of Quebecers living below the poverty line has declined. This is no reason to stop fighting poverty, but it certainly is a reason to acknowledge progress.
Similarly, many depict globalization as the source of all evil today and point to the painful situation of the Quebec textile industry as proof. As economist Pierre Fortin, another Lucide signatory, has pointed out, we knew back in 1995 that the textile industry would be progressively deregulated until it was completely liberalized in 2005. We had ten years to prepare and did not do it. That is not globalization’s fault but our own. Meanwhile, Quebec exports went from 21 per cent of our GDP in 1988 to 43 per cent in 1998. Access to international markets is key to our retaining existing levels of prosperity.
When all is said and done, economic growth remains the primary, though by no means the only, foundation for sustained income redistribution and effective social justice. This is exactly the opposite of what is so often implied in a self-righteous and rhetorical radicalism that barely hides its hostility toward those concerned with the pursuit of real wealth and job creation.
Which way now?
Clinging to the status quo is simply not an option when government revenue grows at a slower pace than government spending – a function of low birthrates, rising life expectancy and early retirement. Whether Quebecers like it or not, they are condemned, like other industrial societies, to find ways to work harder, longer and more efficiently. The only other option is to lower expectations of benefits from social programs.
There is no easy recipe for sustained prosperity anywhere. But the basic ingredients are clear enough: an educated workforce, high productivity, innovation, modern infrastructures, foreign investment, a competitive fiscal climate and so forth. The key question then becomes: where will the money come from to finance the required upgrading of these ingredients if we refuse to make tough choices in designing our social programs?
The hard, painful, unvarnished truth is that contemporary Quebec has developed an excessive fondness for generous, well-intentioned social initiatives, which we proudly display as proof of our “solidarité.” The problem is these initiatives are put on a maxed-out credit card that a less numerous future generation of wage earners will have to pay off.
Take the example of Quebec’s very low postsecondary tuition fees. Historically, they were justified on the basis of making university as accessible as possible to students from all backgrounds. This was a sensible policy when Quebec produced a much smaller number of university graduates than it does today and needed to catch up. Nowadays, all available data show that, even though students pay lower fees than elsewhere in Canada, the proportion of Quebec university students from underprivileged backgrounds is no higher than in other provinces. What the policy does is produce cash-strapped universities that penalize first and foremost those they are supposed to help, the students. Needless to say, this absurdity is also depicted as being progressive – something it stopped being long ago.
Hydro-Quebec’s rates for electricity are among the lowest in North America. The consequence is wasteful use of a precious resource. We have now all but wiped out our energy surpluses. Just because Hydro-Quebec is a publicly owned utility, that does not mean it should sell power at a price that encourages wastefulness and makes it more difficult both to finance higher-cost future developments and to collect the dividends needed to finance other basic public services. Naturally, critics portrayed our argument for raising Hydro-Quebec rates as a neoconservative policy, an effort to remove one of the means of ensuring that future generations can count on the same social safety net we currently have.
Health care spending will inevitably go up as the population ages, but this rise has to be controlled. And we don’t seem to know how to do that. The billions and billions of additional dollars pumped into the health care system each year don’t seem to make much difference. But they are sucking the air out of other important social programs. Other government departments are constantly called on to spend less for the sake of health care.
A number of specialists suggest that public-private partnerships might ease some of the pressure and, in some cases, provide more cost-efficient public health services. They do not assume that the private sector is inherently more efficient than the public sector. Put simply, the status quo of providing universal accessibility almost exclusively through public agencies is increasingly untenable. Predictably, the Solidaires denounce even the most cautious case-by-case opening to public-private partnerships as a plot to dismantle the Quebec welfare state.
I could go on, but the picture is clear. It is a picture similar to that in some other Western welfare states – France, Italy and to a lesser extent Germany – where the left defends the status quo and much-needed reform becomes the prerogative of the right. The societies to learn from are Britain, the Netherlands and Scandinavia, where politicians have put their minds to the case for change.
Who will take up the challenge?
Quebec Premier Jean Charest said the Lucide manifesto was “music to his ears.” Given his record levels of unpopularity, Mr. Charest’s praise did nothing for the credibility of the manifesto. Indeed, one would be hard pressed to reconcile Charest’s rhetorical embrace of the need for a new Quiet Revolution with his long list of broken campaign promises, clumsy mismanagement and general incapacity to establish a coherent agenda for structural change.
Mario Dumont, leader of the Action Démocratique du Québec, the long-suffering third party in Quebec politics, also embraced the manifesto. But he has zero chance of being in a position to implement the change called for any time soon. The key player may well be the new leader of the Parti Québécois, André Boisclair. Polls show he has a more than reasonable chance of winning the next election. During the PQ leadership race, he raised issues such as public debt reduction and called for a more realistic assessment of what a mature welfare state with a declining workforce can and cannot achieve. He has cautiously echoed some of the concerns discussed here.
But Boisclair leads a party that has, by and large, remained faithful to the ideas that underlay the Quiet Revolution, ideas that began losing relevance in the 1980s. Modernizing the economic and social policy of a mass party that has governed Quebec for 18 of the last 30 years while simultaneously advancing the goal of Quebec sovereignty will be a monumental test of political leadership.
As for Quebec as a whole, the tendency to polarize around the two competing manifestos, as if one had to wholly embrace one or the other or as if they sum up all the challenges facing us, has been unfortunate. Quebec risks transforming a crucial public debate about protecting what we hold dear into a sterile shouting match. The problems highlighted in the Lucide manifesto will not go away. They will only get worse if not addressed. Quebec has an opportunity to take on the challenge of reform, an opportunity that may not present itself again.