'Sacrifice' is back on Quebec's political agenda

Budget Québec 2010




When it comes to public finances, it looks as if Quebec might be heading straight for a serious case of déjà vu all over again.
During my vacation and while Quebecers' attention has been focused less on politics recently and more on the crazy weather, the planets were aligning for a return to the famed rhetoric of "sacrifice" that dominated the painful years of Lucien Bouchard's zero-deficit crusade launched in 1996.
Bouchard chose to slash public services. But chances are this new "sacrifice" operation will start instead with an increase in a number of government rates and fees. When? Look perhaps for some nasty surprises when the Charest government tables its budget next spring.
The first hint of what could be coming appeared this spring. With the recession, most Western countries recorded deficits. In Quebec, with a deficit predicted to reach at least $11 billion by 2013, Finance Minister Raymond Bachand tabled a bill suspending the zero-deficit requirement until 2013-2014.
When the Parti Québécois's finance critic, François Legault, resigned in late June, he lamented what he called Quebec's "quiet decline." One way to stop it, he said, was to get rid of some "sacred cows" by raising rates for a number of public services, as well as increasing the sales tax.
This August, the Liberal youth wing agreed and Premier Jean Charest didn't say no. This week, at their meeting in Trois Rivières, PQ MNAs announced they'd make reining in public finances their main theme this fall. But they also sounded open to debating the issue of fees.
With the Action démocratique sharing a similar philosophy, this means that three of the four parties in the National Assembly are willing to debate the issue. That will leave voters who disagree with few alternatives.
Still, for the Charest government, this would be quite a turnaround. In April 2008, it rejected that same proposal when it was made in a report it had commissioned from Claude Montmarquette, an economist known for his neoconservative views as well as, surprise, his support for increases in government fees.
But that was when the government was a minority. To recapture its lost majority, which it did in December, ruffling the voters' feathers with any controversial policy such as raising fees and rates was to be avoided at all costs.
But that was then, and this is now. So how much would you like to bet that Bachand made the Montmarquette report part of his summer reading? A report that proposed collecting $5 billion by raising hydro and university tuition fees even higher, putting water meters in homes and businesses, setting up toll booths to pay for roads, increasing public daycare fees, and so on.
The devil always being in the details, these "sacrifices" would be mainly asked of the middle-class, small income earners, and the poor. Since fees are paid regardless of income level, those are the people any serious increases would hit the hardest.
In fact, the "sacred cows" that would be hunted down - in this case relatively low fees for some essential public services - happen to be among the ways Quebec had found to offset higher income taxes, income taxes being a more "progressive" or equitable way to fill public coffers because one pays according to one's income.
Even raising the sales tax by one point would be more progressive because it covers consumer goods and you pay more only if you buy more. But fees for public services are more "regressive" because when you need them, you have to pay whether you can afford it or not.
For someone who makes $100,000 a year, paying Hydro more for heating is easier than it is for someone who makes $35,000 or who's on minimum wage or welfare. And that's just one kind of fee.
Those planets are aligning for another reason. With at least three years to go in his third mandate and a possibly supportive opposition, the premier could now afford some controversial measures - in this case by going back, in part or in whole, to the Montmarquette report it ordered when it knew full well what it would say.
The problem is that many Quebecers might not be able to afford the consequences.


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