Sunday, March 11, 2007

White Lies on Fiscal Imbalance


On the 2th of March, Quebec’s outgoing Premier Jean Charest did a speech in Montreal before 850 people invited by the Italian Chamber of Commerce of Canada, including Montreal’s mayor Gérald Tremblay. The leader of the Liberal Party of Quebec (LPQ) averred that his party is the only federalist party in Quebec that can solve that ridiculous national problem of fiscal imbalance.

Many people will easily accuse me of being someone who is not interested to see Quebec get federal transfer payments. Come on, do think again! Since the concept of federalism is based on a partnership between two levels of governments, some fiscal transfers must be made in order to make sure that provincial governments can give services that they ought to give.

Obviously, the equalization program is not a viable option for Quebec’s economic development. What I’m trying to say is that Quebec’s government 1) don’t take any measures to create wealth; 2) can’t actually find a way to recuperate money that is uselessly spent and 3) that Quebec has become quite addicted to this fiscal program.

A few months ago, with a very well calculated leak from Canada’s Prime Minister Stephen Harper, it was said with a concealed sense of jubilation in Quebec’s media that this province’s government might receive more than $2 billion from the equalization program. Does it really sound like good news? Well, it depends of your own understanding of Canadian economy… Here’s my subjective analysis of this situation: completely P-A-T-H-E-T-I-C.

Even though I don’t agree with all of Mario Dumont’s stances (particularly on the practice of federalism), I admit that Dumont was right to say that Jean Charest and André Boisclair are ludicrously hooking the federal government. Furthermore, these two leaders of what most of us refer to in common parlance as “Quebec’s major political parties” try to entice voters by artistically mirroring that transfer of $2 billion on their canvas as a fiscally drinkable multi-colour rain from Ottawa.

In the first place, it is true that part of that transfer come from the federal government. However, there’s one inconvenient truth that must be said: provinces that can’t receive any sum of money from the equalization program (ex: Alberta, British-Columbia, Ontario) must transfer their economic surpluses to ensure 1) the development of Quebec and 2) the equality between all provinces as Pierre Elliott Trudeau wanted it in his pitiable dream that confines to utopia.

All in all, the shocking aspect of the “fiscal imbalance” lies in the concept of horizontal imbalance. According to that concept, there’s an inequality between the provinces, in terms of financial power. Simply put, the riches provinces (those who are over the Canadian average of financial standards) must send payments to poor provinces in the likes of Quebec.

No wonder why Jean Charest and André Boisclair enjoy talking about the fiscal imbalance! Do they know that the more a province receives from the equalization program, the more it is poor? Apparently not. Are Charest and Boisclair preparing a plan to sink Quebec a little bit more into poverty? Let’s hope not.

No matter what Jean Charest said during his press conference, the equalization program is more part of Quebec’s current self-fish interests. In fact, through the Canadian equalization program, which appeared during the traumatizing era of Pierre Elliott Trudeau, Quebec is imposing to other provinces its quite “distinct” social-democrat irresponsible way of life.

Let’s be very clear: social-democracy is not an ideological scourge that can be found in a book of political science. Simply put, the Canadian government is punishing fiscally responsible provinces to award a province (Quebec) that can’t 1) produce its own wealth adequately and 2) make responsible spendings. It's quite easy to understand why Danny Williams and Ed Stelmach, respectively Premiers of Newfoundland and Alberta, were infuriated to learn that revenues related to natural resources might be included in the calculation for the equalization program.

Honestly, this column is not about verbally bashing Quebec. I was just arguing that before it can claim money from the federal government (and also from other provinces), Quebec should think about eliminating the fiscal calories, that means useless expenses. All in all, the problem of fiscal imbalance looks more like a rhetoric used to lure Quebeckers rather than to please them.

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