(Published in Inroads, Spring 2003 Issue.)
How are we to account for last year’s sudden ascendance of Mario Dumont, the young leader of Québec’s third party, the Action démocratique du Québec? There is, of course, the man himself: he has style, energy, determination. He comes across as sure of himself but not arrogant. He calls for dramatic changes, yet his style is anything but that of a damn-the-torpedoes radical. An experienced political tactician despite his age, he has a good timing and a developed ear for popular sentiment and for what will or will not play in the media. Above all, and contrary to his Parti québécois and Parti liberal foes, he doesn’t seem torn, anguished, burdened by Québec politics and his place in it. He seems at ease, like a fish in water. In Québec, a complex place that breeds inferiority complexes, this is a refreshing posture.
Yet Mario Dumont had all these qualities two, four, six years ago. Yet he rose to prominence only last year. And although his star has waned since garnering more than 50 percent of the votes in four by-elections in June of 2002, and ended up, despite a rather strong team of candidates including the former mayor of Montreal, with only four seats in the April 14 election, he garnered almost 20% of the vote and has made an important impact in the Québec political landscape.
George Bush Sr. used to say: “90% of politics is showing up”, and there are indeed times when persistence pays; but here, it is the Québec landscape that shifted to make Dumont man of the hour, not the other way around. In early 2002, what seemed to be an endless series of ethical and patronage blunders tarred the PQ leadership and – at a higher level of magnitude – the Chrétien liberals, with serious overspill on their Québec cousins. All of a sudden, every incumbent politician seemed on the take, passé, good for retirement. Dumont was alone – literally a single-member caucus – not to suffer from the alienation, his own previous considerable legal problems with political party financing apparently having left no trace in the electorate.
The general consensus that sovereignty – though supported by over 40% of the electorate – is not an issue to be revived in the foreseeable future, helped Dumont by blurring an essential political divide. His having been in the sovereigntist camp in the 1995 referendum, while today proclaiming – being careful not to fully reject the notion – that the issue is “no longer on the radar screen” allowed former PQ voters to join him without renouncing their ideal. At the same time, Jean Charest’s initial failure to win acceptance as an alternative premier among Francophones served to temporarily redirect the malcontent Liberal voters to the rising ADQ. A key moment was when Dumont seized upon an early spring by-election in 2002 in a riding in the Saguenay region and campaigned as though he was running himself. People came out to “vote for Mario” (his name is always on the ballot, since the official name of his party is: “Action démocratique du Québec, équipe Mario Dumont”). Then it was no longer just Mario: the Saguenay victory broke the dike. Now other victories could ensue.
Moreover, Dumont paradoxically benefited from the very thing he attacked: the so-called “Québec model”. He repeatedly insisted – as did Charest – that Québec is poorly managed, smothers initiative and entrepreneurship, confiscates productive capital and discourages individual success. And he promised to take the government “out of the way” of job-creating enterprises, cut red tape, trim the Québec state, lower taxes – the ADQ toyed, for a while, with the flat tax – and bring the private sector into health care. A Dumont government would not follow the lead of the unions, social advocates, and civil-society summits that were the trademark of the PQ government. And business (which has flocked to his side, wallet in hand, in the last few months) would at last take its rightful place.
The irony is that, if elected, as if by magic, he would have inherited the most buoyant economy in North America, in fact the fastest growing economy among the seven most industrialized nations for five long years. He would also have inherited a healthy business climate, reflected by the fact that production costs in its metropolis of Montreal are lower than in other large cities on the continent or in Europe, even when taxes and regulation costs are factored in[1].
Quebeckers are not accustomed to being on top of these charts. They know that Montreal’s economy is going well – even Dumont acknowledges that. They see their purchasing power growing – indeed it has grown over 7 percent in real terms during the last 1989-2000 economic cycle, while it remained static in Ontario[2]. They can see that more Quebeckers are working than before (more than at any other time in recorded statistical history). But they are absolutely convinced that they are lagging behind! They feel richer than before, but not as rich as the Joneses and, for the first time, they feel they can reasonably ask: why not?
It is these feelings that have turned some of them towards Mario Dumont. Quebeckers, a notoriously prudent lot, feel economically confident enough to consider gambling on a leader with no managerial experience whatsoever. If times were bad, with deficits and unemployment growing, they would never have been so brash. But because public finances are sound, deficits are gone, investment and employment are up, they can afford to have a political affair with that bright young man. Dumont’s rise is a symptom of Québec’s newfound wealth, of, indeed, the success of the Québec model as it has developed in the past decade.
It is also a sign of impatience towards the state. Why are taxes higher in Québec? Why are salaries higher in New York? Something is wrong, claims Dumont, with Jean Charest, most of the media, the business class and economic analysts in tow. The Parti québécois government (full disclosure: I was an advisor for PQ premiers Parizeau and Bouchard from 1994 until the fall of 1999) which climbed aboard the tax-reduction wagon for a while, has helped fuel this perception, and only recently has come around to defending more forcefully the Québec model’s cost/benefit package against that of its neighbours. Quebeckers still perceive that they have the wrong package. There is, however, mounting evidence to the contrary.
Wealth and growth, some facts and figures
What is the “Québec model”? Definitions, accusatory and laudatory, abound. We can start with one crafted in 1998 under premier Bouchard. We honed-in on four basic elements:
A premium put on solidarity as a central value of our collective life, expressed as a more robust social safety net and lower income inequality than elsewhere on the continent ;
- A consensus-building approach that seeks to unite labour, business, government, and, more recently, community groups in setting national goals and be involved in local development;
- An economy in which the government takes a more active role, and of which cooperatives, employee investment funds and the social economy take a greater share;
- Finally, Québec’s special responsibility as the only state representing a majority of Francophones on the continent.
Much of what one finds in the specific policy proposals of the ADQ or the Liberal party is compatible with this definition. It does not preclude more private sector intervention in health care, more individual choice in day care, lower taxes or outsourcing. The level of state intervention in the economy can and has varied significantly over the years, now taking, as it should, a back seat to a very healthy, and rather recent, home-grown business class. Yet it seems that the particular dosage attained in the last decade pays off.
Look at the numbers: growth in Québec was stronger than in the United States for each of the four last years and stronger than in each of the G7 countries for at least three of the past five years. In all, over the last five years, growth in Québec, at 19.6%, has been more than double the G7 average of 9.5%.The difference is even greater per capita. On this basis, Québec grew by 250 percent the G7 average.[3]
According to November 2002 forecasts by the Bank of Montréal for North America and by the European Commission for Europe and Japan, Québec will still be leading the pack in 2003 and 2004. In gross figures, Québec is expected to grow at a rate 10 percent above the average of its American neighbours and 60 percent above that of the G7. Taken individually, no country will perform better than Québec.
Population growth in Québec during these same five years was exactly equal to the G7 average. And since the birth rate has been falling faster in Québec than elsewhere, this growth is even more dependent on its ability to attract and retain immigrants. Despite what is commonly believed, the Québec economy exerts a stronger attraction on immigrants than is the case for the average industrialized country. Canada, and in particular Ontario, shows an attractiveness far above the norm, which makes Québec look bad in comparison. Yet over the last decade, Québec had almost twice the population growth of Northeastern US states like New York or Massachusetts.
This does not mean that Québec is richer, per capita, than each of these countries. Québec has been poorer than Ontario, Canada, the G7 and OECD average since these statistics have been gathered.
The right question about Québec’s current model of development is whether it is causing Québec to lose ground, falling further behind, as Dumont and Charest state, or whether it is closing the historic gaps. The critics routinely use gross GDP figures to claim that Québec is losing ground in North America. Yet when using per capita figures based on purchasing power parities (PPPs), as is now the rule at the OECD, the World Bank and the IMF, the results are stunning.
If placed among the 30 members of the OECD, Québec went from 17th place in 1992 to 10th place 2002 in wealth per capita in PPPs. Only Ireland climbed higher faster. It did so because the “Québec model” was able to evolve from its 1960s form, to reengineer itself, especially since the mid-eighties
Specifically, Québec has been steadily narrowing the gap with its closest neighbours, Canada and the US. And this does not take into account the greater inequality of income in the latter. The obscene accumulation of wealth of late, by the top 1 percent of US earners (almost 20 percent of after-tax income), makes averages less than meaningful. As stated by economist Paul Krugman in his New York Times column earlier this year, when Bill Gates enters a bar at which 40 workers are seated, all patrons automatically become, on average, billionaires.
|
Québec’s compared to the OECD, Canada and USA, 1992-2004
GDP per person and in PPP
|
|
1992
|
1998
|
2000
|
2002
|
2004
|
| Québec/OECD |
101%
|
102%
|
107%
|
111%
|
114%
|
| Québec/Canada |
89%
|
89%
|
91%
|
92%
|
93%
|
| Québec/USA |
74%
|
71%
|
74%
|
79%
|
81%
|
| Sources : 1992-2001 : OECD and Institut de la Statistique du Québec; Estimates 2002 and forceasts 2004 : StatsCan, OECD, Bank of Montreal. |
There can be no doubt: the top 10 percent of earners in Ontario, BC and, especially, the US are much richer than in Québec. If that is the objective, Québec, with the lowest Gini[5] on the continent, is out of the game. If, instead, greater wealth for the whole population is the objective, then, we need note that the 25 percent of the population with the lowest income live better in Québec than in Canada as a whole, who, in turn, have it better than those in the US.
What of the middle class? Québec economist Pierre Fortin used the landmark study of Michael Wolfson and Brian Murphy on incomes in North America in 1997[6], adding PPP differentials for Québec that the study did not take into account, and came up with the figures of median income set out below:
|
Median earnings, 1997, (in PPPs) in US (1995)$
|
|
Canada
|
20 300
|
|
Québec
|
20 500
|
|
Ontario
|
21 600
|
|
Etats-Unis
|
21 700
|
Two facts stick out: First, the Québec figure is slightly higher than that of Canada, no doubt a recent development. Second, the differential with the US is less than 6 percent, far from the 20 plus percent gap arrived at when using non-PPP adjusted average figures. Since growth has been significantly higher in Québec than in the US since 1997, and much more evenly distributed, it is a good bet that more recent data will show the gap disappearing[7].
Taxes, services and the weight of the Québec state
Mario Dumont also expresses a strong distaste for the state and for civil servants. The state is too heavy, he argues, too intrusive, too all-encompassing. Dumont is the freshest face on a very old right-wing talk-show rant against civil servants’ cushy jobs and security. There is ample room for debate on the nature of state intervention in Québec life; but the numbers don’t quite add up.
Comparison with Ontario – the rich cousin who, Quebeckers all assume, knows how to handle things – doesn’t quite buttress the Dumont prima facie case. According to comparisons compiled by Québecs Conseil du Trésor this February, and essentially drawn from Statistics Canada, it is true that Ontario has 8 civil servants per 1000 citizens, and Québec 12. A huge gap, except that many civil-service tasks have been devolved to Ontario city workers, who are more numerous there. When this is taken into account, Québec has 22 civil servants per 1000 inhabitants, Ontario 20. Not quite worth storming the Bastille over.
Furthermore, Québec carries out tasks that Ontario leaves to the federal government: Manpower training, immigration selection and integration, GST management, the Québec pension board. Québec has also a Revenue Department, State Auto Insurance and Pharmacare, a more robust presence in child care, culture, social housing, international relations… the list goes on. One can argue that Québec should not be in these fields – something neither Dumont nor Charest do since both demanding even more decentralisation from Ottawa to Québec, ergo more work for Québec civil servants. When Quebec’s Conseil de Trésor factors this in, it finds the ratio for Québec to fall to 20.3 per 1000 in Québec, just above Ontario’s 20.[8]
We thus come to the bottom line, the costs. To hear Dumont and friends, Quebeckers live in a “fiscal hell”. Again, one can argue on the merits of lower taxation per se. But the critics assume that Quebeckers get nothing in exchange for their tax dollars, that this money is somehow dumped into a great bureaucratic black hole. One Dumont electoral ad went as far as to claim that “50% of our tax dollars are wasted”. “Do we get better health care for this money? asks one of his star recruits, fiscal advisor Yvon Cyrenne. Shorter waiting lists? Better education?” (In fact we do get better overall education and health, and under Canadian average waiting lists, but Cyrenne, like most Quebeckers, doesn’t believe so.)
I have not found a scholarly comparison of taxes and services collected and provided by the governments of Québec and Ontario, and thus rely on the Québec Finance department’s computation of what it would look like if the Ontario tax structure had been applied in Québec in the 2001-2002 fiscal year. On the tax side, Quebeckers would have paid 4.2 billion less in taxes; but Québec businesses would have paid 1.4 billion more. So the net extra burden is of 2.8 billion.
On the expenditure side, a simple perusal of the spending reports of both governments in 2001-2002 visualized in the table below shows some of the services provided by the Québec government but not by Ontario. Two big ticket items, 5$ a-day daycare and Pharmacare, bring us to $2.7 billion. Add Québec’s supplement to the federal child benefit, its generous student grants program (Ontario provides only loans), its grants to private education (nonexistent in Ontario and very much middle-class oriented), its strong involvement in local development and its larger investment in culture, and the sum climbs over $4 billion. And this does not include additional administrative activities related to the Québec pension plan, the Revenue department (which also handles the GST), immigration selection and integration, and foreign delegations.
|
Expenses and services available only in Québec, 2001-2002
(partial list)
|
Amount
(in millions$)
|
| 5$ a day daycare |
1020
|
| Supplementary child benefit |
565
|
| Pharmacare |
1686
|
| Student grants |
177
|
| Private school grants |
307
|
| Local and regional development |
219
|
| Supplementary effort in Culture |
155
|
| Total |
|
4139
|
| Supplementary fiscal load |
|
(2800)
|
The conclusion in inescapable. Not only do Quebeckers get their money’s worth in terms of services, but they actually get considerably more bang out of each tax buck than Ontarians.
Dumont, a pre-Reagan Republican
If Mario Dumont had a clear neo-conservative vision of where he wants to go, it would at least allow for a well-drawn electoral debate between social-democrats and conservatives. Unfortunately he does not walk the talk. Last fall, after calling for deregulation in well-attended speeches before businessmen and women in Toronto and Montreal, he voted in the December in the National Assembly for a bill extending labour regulation and worker protection in Québec to a level unmatched on the continent. Not an exception, since he voted in favour of Québec’s 1996 ground-breaking equity pay law, that imposes pay hikes for women in the public and the private sector over 10 years as well as a burdensome assessment process on businesses. And in 1998, he pushed the Bouchard government to craft Québec’s distinctive law banning dual pay scales, thus protecting younger workers against this discriminatory practice.
Similarly, last December, after having denounced the tax burden, and vowing to lower upper tax brackets, he voted in favour of the Law against poverty and social exclusion, which commits the government to provide funds – tax funds – to lift poor citizens out of poverty.
His team of star candidates hardly complemented his ideological stance. Former Montreal mayor Pierre Bourque talked of wealth redistribution at every turn, and didn’t seem to have read the party platform. Diane Bellemarre, who used to head the board of Québec’s labour-training agency on which sit union, business and community representatives, was a symbol of the Québec corporatist culture that Dumont publicly loathes. His health critic, Joëlle Lescop, contradicted him on the ability of patients to pay for care – the private sector can deliver the service, but the state should pay, she argues, her approach rooted in mainstream thinking. The list goes on. (None of the above were elected on April 14.)
When questioned about his values, Dumont’s ‘small c’ conservatism emerges. He’s not keen on abortion, though he would not act to restrict access to it. Gay marriage is not his thing, though he voted in 2002 for Québec’s very progressive law on the issue. He would not legalize marijuana — a federal responsibility. He clearly doesn’t like unions, and pledges to repeal the section of the Québec labour code that gives unionised workers some protection where their employer sells his business. All this summit/partnership/let’s get-together-and-have-a-consensus business would go; instead he would represent the “silent majority” who are not invited to these gatherings, though is not clear on how he would have consulted them – though he attended every summit to which he was invited since his election in 1994.
He never comments on international affairs. Globalisation doesn’t seem to bother him, as long as we can trade with the US. Québec’s delegation network should stay, he says, but get behind our entrepreneurs and cut down on petits-fours. We can get better policy pronouncements from taxi drivers.
Overall, we are in the presence of a pre-Reagan republican. A soft reactionary, not a feisty revolutionary. If elected, it is doubtful that he would have succeeded in turning the Québec model upside down, though his proposal to import US-style education vouchers could have wreaked havoc on a Québec education system, which, according to the OECD’s PISA survey[9], has been producing the best high school results in science, math and reading in the West, overall and especially among economically disadvantaged students.
The pace of reform has been extremely brisk since the PQ election in 1994 and re-election in 1998, as manifested in particular in decentralisation in education and economic development and in enhanced performance in the public sector. The rise of the ADQ gave impetus to reformers within the PQ, which found its way both into social policy plans, like the right to a 4-day week for parents of young children, and efficiency oriented ones, like further reduction of the corporate tax burden, more pruning of the civil service and more devolution of power to regions. This did give a boost to the PQ fortunes and made possible a come back that, for a while in the spring of 2003, seemed to point to a re-election. The outgoing Landry government actually ended the campaign with a 50% plus satisfaction rating, and lost.
The ADQ rise also forced the Charest liberals to redraw new policy positions without trying to outflank Dumont’s boldness. At first, their decision to be mild seemed risky. But a series of Dumont blunders and reversals got a number of Quebeckers into rethinking their choices. Yes, a majority of them were satisfied of the government, but a bigger majority yet was ripe for a change, and with Charest’s personal performance at his best since the 1995 referendum days, change without radicalism was back in style.
If nothing else, then, Mario Dumont and the ADQ will leave their mark in further changes in the Québec model. The election has allowed voters to set the direction of these changes, and the place of individualism in it. On the PQ side lied a balance between social and economic development with an eye on social cohesion, on the ADQ side, a gradual weakening of the state and of civil organisations to accommodate a more individual approach, creating a more unequal society than Quebeckers have known. By choosing the Charest liberals, Quebeckers decided to try and have both.
Jean-François Lisée is a guest researcher at the Centre d’études et de recherches internationales in Paris, and a member of the Centre d’études sur les politiques et le développement social, de Montréal.
[1] See the latest: KPMG report, Competitive alternatives – Comparing business costs in North America, Europe and Japan, January 2002 , at www.competitivealternatives.com
[5] The Gini coefficient measures income inequality. The possible minimum Gini is 0.0, i.e. all income equally distributed; the possible maximum is 1.0, i.e. all income going to the 10 percent of households receiving the most income.
[7] These figures are not adjusted for time spent at work. We know for a fact that, like Europeans, Quebeckers choose to take more leisure time than English-Canadians, and much more than Americans.
[8] These numbers are drawn from Comparaison des effectifs Québec/Ontario, Conseil du Trésor du Québec, February 17, 2003.
[9] In 2000, on three tests among 30 countries, Quebeckers held places 2 to 3 for results and 1 to 3 for inequality, Ontarians held places 4 to 10 for results and 2 to 3 for inequality. The US held places 16 to 21 for results and 8 to 12 for inequality. Quebeckers were also among the top three for the only two other previous surveys, in 1994 and 1997. See Conseil des ministres de l’Éducation (Canada), À la hauteur : La perfomance des jeunes du Canada en lecture, en mathématiques et en sciences; Étude PISA de l’OCDE – Premiers résultats pour les Canadiens de 15 ans, 2001, 97 pages. See www.cmec.ca/pisa/2000/rapportcanada.fr.pdf
