Across Quebec for the last few years, ordinary people and businesses have been asked to make sacrifices. They have done so for a broader public purpose, except for one group, a minority of university students.
Quebec’s sales tax has gone up by two points. A health tax was imposed to raise $945-million when fully implemented. One cent a litre was added to the price of fuel each year from 2010 to 2013. Business taxes were raised by $800-million.
A payroll freeze was instituted for government workers. The budgets of all departments except health and education were frozen or reduced.
Why? For three reasons.
First, Quebec has the highest per-capita debt in Canada. Debt payments eat up about $7-billion a year. The ratio of debt to GDP is about 55 per cent, and the government wants slowly to chip it down to 45 per cent by 2026.
Second, Quebec, with its high per-capita debt, wants to get out of deficit financing. The government proposes to balance the budget by 2013-2014 so as not to pile more debt on top of what already exists.
Third, economic growth is forecast to be only 1.5 per cent in 2012 and 1.9 per cent in 2013. The deficit, in other words, can’t be eliminated by fast growth and buoyant tax revenues.
In a period of universal restraint – except for health care, where budgets are slated to rise 5 per cent on average to 2016-2017 – the government is trying to be generous to universities. It knows what everyone in the field of higher education understands: that Quebec’s universities are underfunded (and most suffer qualitatively as a result) compared with those elsewhere in Canada and with public universities in the United States.
As a result, the government proposed that budgets for universities rise by $967-million by 2016-2017 (which would still leave them behind), of which the government would pay about half. Students would be asked to contribute about 30 per cent.
And this is where political hell broke loose more than 100 days ago. What began as a protest against an additional payment has blossomed into a movement bringing together union organizers, far-left splinter groups, Parti Québécois politicians past and present, some NDP MPs, sympathetic university professors and just about every social action group in Quebec.
The additional sum the students were being asked to pay over the next five years (since extended to seven) was $280-million, a drop in the bucket of what the government itself pays for higher education.
It is said by those who favour freezing fees or abolishing them altogether that the money will be recouped by the state in the form of higher taxes – an implicit acceptance that those who go to university, subsidized while there by the taxpayer – will earn more money than those who did not go to university and were therefore not subsidized.
The argument is completely bogus. Taxes would have to go up – or government spending lowered – to compensate for the gap in today’s unpaid fees. Where would taxes rise?
Quebeckers already pay the highest marginal tax rate in Canada. Quebeckers with two children who earn more than $200,000 a year already pay about $10,000 more in tax than Ontarians, $4,600 more than Nova Scotians and $18,000 more than Albertans. At $100,000, the same family pays more than anyone in Canada, but at $35,000 or lower, the Quebecker pays less.
Quebec has the highest small-business tax rate, the highest sales tax, the second-highest gas tax (after British Columbia with its carbon tax), the highest payroll tax (but the lowest tobacco tax!), and a 3.9 per cent compensation tax on those who work in financial institutions. And, of course, Quebec students pay by far the lowest fees, and are therefore subsidized more heavily by the taxpayer, than anywhere else in North America.
Quebec’s student drama cannot be divorced from the fiscal challenge that its government and citizens have been confronting with admirable fortitude.
Why in the overall context of Quebec’s challenges – the most obvious of which is that high indebtedness today leads to higher taxes or fewer government services tomorrow – university students should be exempted from offering even a minimal contribution is something they have not answered, perhaps because no plausible answer exists.