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Jeffrey Simpson (Brigitte Bouvier For The Globe and Mail)

Jeffrey Simpson

(Brigitte Bouvier For The Globe and Mail)

Jeffrey Simpson

Quebec's pay-everyone social programs are draining its purse Add to ...

Free-market economics often struggles for intellectual ascendancy in Quebec. Politicians will sometimes pay verbal service to it. So will academic economists. But the province's political culture frequently gets in the way.

Forty per cent of Quebeckers do not pay income tax, as young economist Mathieu Laberge has noted. One result is fierce opposition to program cuts by people who are not taxed to pay for government services. Another result is that, with only 60 per cent of the population paying income tax, it's hard to raise big new revenues. Still another result has been a growing deficit and indebtedness as politicians find cutting spending hard and prefer to subsidize hydro rates, daycare, university fees, pharmaceuticals.

Mr. Laberge is among the young economists in Quebec who have been challenging conventional wisdom about the province's economy. He worries greatly about the province's debt (per capita, the highest in Canada), the gap in productivity between Quebec and the rest of Canada (and, of course, the United States), the aging of Quebec's population.

More profoundly, he questions what he calls the esprit égalitaire (spirit of equality) in Quebec that "puts everybody on the same level," with policies that have political appeal but produce the perverse result of helping the already well-off.

As Exhibit A, he offers Quebec's very low fees for university students - by far the lowest in Canada. Wealthy students pay the same as the poor, so the wealthy benefit more from the state subsidy. It would be much better, he argues, for fees to rise and for student aid to increase for those who need it. Quebec's university administrators agree with that argument, as does the provincial government. But so powerful are Quebec's students and so strong this idea of esprit égalitaire that nothing has happened.

Calling for higher fees is heretical argument in student circles, but then Mr. Laberge knows a little about heresy. While studying at l'université de Montréal, he was vice-president of the youth wing of the Parti Québécois when Lucien Bouchard led that party. ("I was in favour even then of unfreezing fees. I argued inside for that position but couldn't say it publicly.")

Later, while studying for his masters at the University of Nottingham, he saw Quebec from outside Canada, and changed his mind on the existential question of Quebec's role in or out of Canada. "While in England, I asked myself if sovereignty was necessary. Being outside the country took the emotion out of it. I concluded that it was no longer necessary to have sovereignty. I'm a pragmatist, so I decided it was better to participate in Canada," he said.

Today, he is a researcher with CIRANO, a kind of Montreal-based think tank that links university professors and CIRANO's own staff in collaborative projects looking at many aspects of Quebec's economy and social policy. It's too bad CIRANO, like so many other Quebec institutions, has such weak links with opposite numbers in the rest of Canada, because issues confronting Quebec are often quite similar to those elsewhere.

Take aging, a subject of great interest to Mr. Laberge. He co-authored a paper with Claude Castonguay, one of the grand old men of Quebec public affairs, that raised the question: What happens to government finances with the average Quebecker leaving the work force at 59.5 years of age? Canadian governments elsewhere are asking themselves the same question, and with good reason. Mr. Laberge argues for a new way of looking at retirement, giving people a chance to phase in their departure from the work force.

In addition, hydro rates will have to go up and health-care arrangements will have to be rethought. "If we don't, we'll have to raise taxes," he concludes. Not a cheery thought for any government, especially a Quebec government with already high tax rates relative to those elsewhere in North America.

To its intellectual credit, but its political peril, the Jean Charest government is today following or tip-toeing toward the ideas of Mr. Laberge and his ilk. It has promised higher university fees and hydro rates - some years from now. It has implemented a special tax to pay for health care, and a fee for seeing a doctor. It's trying to bring down the provincial deficit, which is now well below Ontario's.

Maybe Mr. Laberge is no longer an iconoclast.

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