Adam Daifallah is a partner at HATLEY Strategy Advisors, a Montreal-based public affairs firm.
The other day, a provincial Premier was waxing philosophically about the role of the state. “My view is that government should be a force for good in people’s lives and it should be active where it is appropriate,” the Premier said. “The things that people can’t do themselves are where government has to … take a critical role.”
Meanwhile, another provincial Premier was striking a different tone.
“Our government does not intend to pick winners and losers,” he said. “The government’s role is not to create jobs – entrepreneurs do. They will lead on their own, if given the right environment. Our job is to create an ecosystem that will allow entrepreneurs to express themselves freely.”
The first comment was from Ontario’s Kathleen Wynne; the second from Quebec’s Philippe Couillard.
To those familiar with the usual narrative of Quebec politics, these diverging rhetorical tacks come as a surprise.
For the first time in a while, Quebec’s penchant for embracing big government, corporate welfare and high taxes is being seriously challenged by a sitting government.
While Ms. Wynne’s government proposes higher taxes on upper income earners, more than $100-billion on new infrastructure spending, billions in new corporate welfare and a new Ontario public pension plan, the Quebec government is talking about reducing the tax burden, reining in spending and even the possible privatization of some state-owned businesses.
All this is making Quebec look more serious about fixing its fiscal woes than Ontario – something that seemed impossible only a few months ago.
Mr. Couillard has surrounded himself with a trio of economic ministers – Carlos Leitao, a former Laurentian Bank economist, in Finance; Jacques D’Aoust, a former business executive from the financial sector, at Economic Development; and Martin Coiteux, formerly of the Bank of Canada, at the Treasury Board – all fully committed to administering tough medicine.
Upon taking office, Mr. Couillard and his team discovered that the economic picture was worse than previously thought.
Mr. Leitao’s first budget, tabled June 4, committed to reduce public spending by more than $5-billion in the next two fiscal years. All ministries and government bodies have been asked to cut operating and administrative costs, and a public-hiring freeze has been imposed.
The government also created two new committees to evaluate taxation and waste.
The Quebec Taxation Review Committee, chaired by respected economist Luc Godbout, has a mandate to review the tax system and propose changes to make it more competitive. Mr. Couillard has speculated in the past about increasing consumption taxes in order to lower income taxes, something we may hear more about when the committee presents their report.
The Ongoing (i.e. permanent) Program Review Committee has been tasked with freeing up $3.2-billion from the books. Mr. Couillard has mused publicly that no new government program will be created unless another equivalent one is eliminated, avoiding the pile on to which Quebeckers are accustomed.
Never has the opportunity been greater to truly reform Quebec’s social and economic model.
The Parti Québécois is a shambles, and is about to enter a soul-searching and divisive leadership race that will distract it from its role as the Official Opposition.
This will elevate the position of François Legault’s Coalition Avenir Québec, a party likely to support – or at least not oppose – many of the Liberals’ belt-tightening measures.
The ongoing Charbonneau commission into corruption in the province’s construction industry has weakened the labour unions and made them a less formidable force.
In short, if Mr. Couillard cannot get his agenda through in these conditions, it’s likely no one ever will.
Those negatively affected by Mr. Couillard’s reform agenda – public-sector workers and those who benefit from government grants, subsidies and tax credits – will likely get organized and try to bring the government’s agenda to a halt.
No one has taken to the streets yet, but they might once the fall comes.
If that’s the case, Mr. Couillard must hold firm. If he succeeds, he could go down as the man who reversed Quebec’s long and steady economic decline.