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Guilt-inducing ads won’t get Quebec tax evaders to pay up

This is a make-or-break year for Quebec, Canada's most indebted province in relation to its GDP, which promised to erase its deficit come hell or high water.

Finance Minister Nicolas Marceau is attempting to contain the growth of the province's expenses at a lowly 1.8 per cent. As no government has accomplished this in the past 14 years, this is a daunting task. But with dwindling economic growth, finding money to compensate for the revenue shortfall – now pegged at $565-million for the fiscal year that started Monday – is a pounding migraine for Mr. Marceau.

Critics of the Parti Québécois have been quick to point out that Quebec will receive some unexpected help from the federal government through richer equalization payments. But even the extra $280-million that will flow this year won't suffice.

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The Parti Québécois government is now using the money Quebec had stashed in its cookie jar for hard times. It is even resorting to cutting back welfare allowances and slashing expenses in the daycare network that Premier Pauline Marois cherishes, moves that are as foreign to the PQ as the Japanese tourists who get lost in the postcard streets of Quebec City.

As the government is leaving no stone unturned, Quebec is relying more and more on its fight against tax evasion. This has attracted less attention than the controversial equalization payments. But without the billions Quebec plans to capture from the underground economy, the government could kiss its zero-deficit target goodbye.

Quebec aims to recover close to $3.9-billion in the 2013-2014 fiscal year, which is twice the amount it reclaimed only six years ago. To find the estimated $3.5-billion that still eludes the province, Revenu Québec has hired 1,085 employees since 2010, beefing up its team to fight tax evasion to 4,700 experts. In a province where corrupt civil servants, shady engineers and Mafia bosses attract more attention than Hollywood stars, the war against tax evasion and collusion in public procurement has created an industry of its own.

Revenu Québec started airing this week its latest prime-time television ad against tax evasion. The ad, set in a boardroom, targets corporations that use questionable tax shelters.

Previous ads were aimed at consumers. In one, an auto mechanic offered to repair a woman's car for cash, without an invoice and the associated taxes. The woman asks the mechanic who pays for his hospital visits, and he then reluctantly agrees to give her a bill. In another, a father with his baby girl in his arms asks to pay his painter in cash but changes his mind when the handyman wonders aloud who will pay for the province's $7-a-day daycare.

All of the ads rely on a sense of guilt to put Quebeckers back on the right track. Yet after watching the Charbonneau inquiry, this looks doubtful. There was not much guilt at work when construction and engineering firms colluded for years to split up public work contracts while illegally financing political parties through back-door channels.

Maybe Quebeckers have grown accustomed to the enormities that have been aired and have lost some of their sense of indignation as the inquiry on the construction industry drags on. But it was striking, if not revolting to hear top executives from engineering firms talk in a candid and casual way about a system that has ripped off taxpayers and corrupted our democracy. Within the construction and engineering industry, everybody knew, or so it seems, and no one blew the whistle.

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And now, somehow, as the new ad portrays, a president who was tempted to hide corporate profit in another jurisdiction would change his mind for fear of being caught by the Quebec government? Um, I don't think so.

If humans are fallible, however, machines have proven they are less so, as Quebec's experience in the restaurant industry has demonstrated. In the fall of 2011, the province forced restaurateurs to install sales recording devices in their establishments to ensure business owners report all of the drinks and meals they sell. As of last September, more than 32,000 devices have been installed in roughly 18,850 restaurants.

For Quebec, forcing restaurateurs to give out bills has been as rewarding as a sundae with extra cherries on top. At the current rate, the government estimates it will recover $2.3-billion in lost tax revenue by 2019, or about $300-million per year.

Quebec plans to extend the use of sales recording devices to other industries, and this initiative looks a lot more promising than Revenu Québec's latest advertising campaign. Unlike the sci-fi movies where the robots get a mind of their own and seek to destroy mankind, these machines have proven themselves to be Quebec's newest best friend.

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