Quebec 2030 (Part B): A Step Back or a Step Forward?
Etienne Lacroix Boston, April 2011 Quebec’s two main challenges: Our loss of national autonomy and our declining standard of living Over the last decade, we have reminded ourselves constantly that our more rapidly aging population and our relatively poor economic productivity will lead to difficult times ahead. This is not even a matter for debate anymore and groups representing different interests and ideologies have pushed for their own proposed reforms to be implemented. As a result, Quebec now has one of the most attractive business environments in North America while providing the most generous family and social programs. Yet it seems that none of those measures has lead to significant outcomes, as the prospects for our society don’t look any more encouraging than they did before. In light of this contradiction, we have to ask ourselves if those measures failed to address the most basic issues; if we all simply misunderstood what exactly we had to fix. The challenges we are facing are quite simple but their collateral consequences are very difficult to predict. On the one end, our debt level, although not yet critical, is severe and could threaten something both Quebec federalists and sovereignists value, that is, our level of autonomy within the Canadian Confederation, something we have worked too hard for to let go of. The world now abounds with examples of society that due to public finance mismanagement have given away their ability to fully decide for themselves: Greece, Portugal, Ireland, etc. If nothing is done, Quebec will be added to that list sometime during the next two decades. As capital market confidence in our public finance will slowly erode while our debt risk premium gradually increases, we will remain passive observers of the decline of our public services and national autonomy. And this will go on until, suddenly, the confidence of our debt holders will evaporate with the illusion of perpetual refinancing. Facing that situation, the federal government will very likely act as lender of
last resort, but that will come at a price that won’t be explained by the interest rate. The cultural differences between Quebec and other provinces will be a catalyst for misunderstanding, as the likely imposition of austerity measures will attack the very foundation of our collective identity. Will these measures require we forgo some of the rigidities in our economy that we willingly support such as the necessity of the French language in the workplace, and our stronger labor laws? Or, will they require that we sacrifice public services not available in the rest of Canada, such as accessible daycare, humanitarian parental leaves or subsidized culture? One thing is for certain, projections show that the magnitude of change that would be required in 20 years if nothing is done before then would be more dramatic and less democratic than changes that could be made today. On the other hand, even if we manage our public finances more responsibly, our continued lower economic productivity will fuel the erosion of our standard of living and the much needed provincial government revenue. As doctors, public attorneys, policemen, teachers, and others are now protesting in order to obtain salaries comparable to those in the rest of Canada, one has to wonder what differences in standard of living those groups will be willing to accept before self interest throws us all in a governance crisis further exacerbating our inability to achieve the level of coordination the situation requires. A solution that won’t come from the right or the left Some have proposed what might seem at first glance to be logical solutions. Right‐wing interest groups have recommended a reduction in the role of the state, de‐unionization and further deregulation in the name of increased economic productivity. But what if by trying to bring constructive solutions to life, those measures only make matters worse? How will pushing for a materially productive ideology that has
Quebec 2030: A Step Back or a Step Forward?
constantly been rejected by the majority lead to or in the factories of Montreal in the 50s? Was it overall productive outcomes? Could it instead result when we were called a nation without history or in further societal division and lack of coordination, culture, when we started using the expression “born bringing Quebec further away from the economic for bread crumbs” or when we tagged ourselves with growth we need to preserve our standard of living? It the word minority? Was it when we failed in creating a collective project in 1980 and in 1995 or was it is not that improving the efficiency of our institutions when at three different occasions we tried to join the should not be prioritized, but that getting rid of Quebec’s institutions alone won’t deliver the Canadian Constitution but failed at every attempt? economic results that right‐wing supporters expect. This root cause may have become anchored in us centuries ago, and we may have sustained it by institutionalizing the idea that we do not deserve to Surprisingly, left‐wing groups don’t seem to have be as confident in our society as others are in their found viable solutions either. By promoting increased own societies. revenue collection through taxes and tariffs as opposed to the creation of new sources of wealth, leftist political parties, unions, and university student But more recently, the cumulative impact of those associations have misunderstood that the cause of failed referendums and constitutional accords has standard of living erosion isn’t the amount of wealth pushed us into a self‐fulfilling downward spiral that the government collects, but the has exacerbated our loss of We have institutionalized confidence and brought us more amount of wealth we collectively collective failures. Since the create. Raising taxes or tariffs to the idea that we do not fund specific public programs is a deserve to be as confident second referendum, we have seen the erosion of our social short‐term and unsustainable in our society as others solution. It would only change values through waves of which groups suffer from our slowly are in their own societies. allegations of corruption and decreasing conditions of living. But more importantly, weak elected official accountability, we have seen it could also accelerate our societal decline, as our further societal division with the formation of capacity to collect more without stifling our already interest groups that have disproportional political anemic economic growth is influenced by whether or weight, leading to an omnipresent perception of immobilism, and we have seen Quebec’s politicians not we and others believe that Quebec presents at least the same or more opportunities than other increasingly and disrespectfully blame each other comparable societies. People don’t go to California instead of working together. And little by little, we for its healthcare, education or low taxes; they are all have counter‐reacted to the dilapidation of our among the worst in the United States. People go to informal social contract by instituting widespread California because they believe that it is where the cynicism that only makes it more difficult to attract a new class of leaders that could break the cycle. As next big thing will happen. Unfortunately, it seems that not enough of us are convinced that Quebec can our confidence has slowly declined, and our media promise similar prospects, as every year there are has spent more time covering those unfortunate more Quebecers who leave to join those more events than anything else, we have further promising societies than there are people joining us legitimized in our own mind and in the minds of from those same societies. others that great things don’t happen here as much as they happen elsewhere. The intangible root cause: Quebec’s quiet And more disappointments have followed, fueling depression what seems like a collective, painless and quiet The solutions proposed by the left and the right depression. With the Peel Basin, we failed in won’t lead to positive results because they are based creating an acceptable solution that would also on misconceptions of the root cause of our problems. increase the international standing of our society. This cause is not one of economic ideology, but one With the CHUM, we failed in developing a project of that is deeply rooted in a vast majority of us and has which we could all be proud. More importantly, we been for so long that it has become invisible even have failed and are still failing in making the though the symptoms are still present today. To decisions and taking the measures that could understand where it all started, we need to go back ensure our society’s progress. to the first time we experienced a collective doubt about the opportunities Quebec presented. Was it on the Plains of Abraham in 1759, in the British parliament in 1841, in the asbestos mines in the 40s, 2
Quebec 2030: A Step Back or a Step Forward?
Our depressed perception of reality and Quebec’s poor investment, we have ended up with one of the economic paradox lowest economic productivity rates, which pushed our standard of living even farther from the Canadian It seems that our quiet depression has prevented us average. If all the building blocks of economic from seeing how successful we really are. We are not development are already in place, the only thing perfect, but we have achieved an almost perfect missing for it to happen is the expectation and the equilibrium between our social and cultural values, confidence that it will indeed happen. our environmental expectations and our need for economic development. We don’t seem to appreciate how much of a challenge this The solution to our economic problems isn’t economic represented, but the fact that so few societies have This confidence won’t change anything if it’s just ever achieved such equilibrium should make us all about one person being more confident than the significantly more proud and confident than what we person next to him. This will only currently are. Our quiet depression lead to weak coordination and We have created the most egalitarian has prevented us from negligible growth. It’s about all of and culturally vibrant society in North‐ seeing how successful us, individually and collectively, America. We have provide more believing in ourselves as much as we really are. family and social services than our other societies believe in counterparts, our healthcare system, although not themselves, or more. As our own confidence increases, the confidence others have in us will do perfect, is universal, costs collectively less and is the same. Only this internally and externally shared within the best of all provinces, our education system confidence about future opportunities in Quebec will is the most affordable to its users while delivering lead us and others to invest here. This will not only same quality degrees, and our artists are no doubt among the most well recognized inside and outside lead to new machineries being bought, to students of the country. deciding to stay a few more years in school, or to new business ideas being funded, it will also enable us to achieve the economic productivity needed to We are also, along with California, one of the maintain our standard of living. greenest societies on this side of the Atlantic. We produce less than half the Canadian average in And as small wins materialize, the same mechanisms greenhouse gas emissions, almost all of our that reinforced our quiet depression will reinforce electricity comes from renewable sources, we are the country’s leader in transportation electrification and our confidence that opportunities are indeed available here; eliminating along the way the we will be one of the only regions in North America apparent contradiction between our attractive to meet its share of the Kyoto protocol by 2012. business environment and our relatively weak economic performance. This is not about left or right And all this has been achieved while we have policies; taken without regard to our confidence in developed one of the most attractive business the opportunities our society will provide, these are environments in North America. We are more diversified and have more high technology of little importance. It’s about the policies that will make all of us confident that Quebec will offer businesses than anywhere else in the country, the opportunities to every one of us. cost of doing business is within the lowest in North America, and we invest more in R&D and receive A new role for our society leaders more venture capital than any other province. If we want to maintain both our national autonomy and preserve our standard of living, tightly controlling But at the same time, this is where Quebec’s paradox is the most visible. On the one hand, there is our public expenses won’t be enough. We will also need to ignite Quebec’s economy to a level we absolutely nothing wrong with our business haven’t achieved in our recent history and regardless environment, it is probably among the best there is in of the incentives; it won’t happen unless we believe the country. But on the other hand, our economic that it will. This will not be the first time that we have performance has remained among the lowest of all had to mobilize ourselves in order to prevent the provinces. It seems that, for some obscure reason and despite the economic rationale, we have decline of our society, only this time the threat seems to come from within. increasingly refrained from investing our resources, our time and ourselves, as if we weren’t confident that returns would materialize. As a result of this 3
Quebec 2030: A Step Back or a Step Forward?
The situation is not as compelling as some of the historical events we’ve been through, the urgency is difficult to gage, the mechanisms by which our decline is occurring seem unconnected and we have no motivation to make the first effort if we are not convinced others will do the same. Our chance to succeed resides in our ability to see that by setting goals and taking measures to prevent our decline, we will emerge as one of the greatest societies in the world. We already have the social, cultural and environmental perspective. It is now time to expand our economic perspective as well. Our leaders have an extremely important role to play in rebuilding the confidence we need to spark our economic development. They must realize that although they need to maintain the checks and
balances of our institutions, they can’t afford to be divided on the end goal. The party in power, opposition parties, union leaders, professional associations, student associations and environmental leaders must, in an unprecedented coordinated effort, demonstrate that they are taking the first steps. As their demonstration of confidence creates momentum, they will need to keep it going by accepting that some of them will have to lose a little now to prevent all of us from losing a lot later. And then, reprioritizing some of our public services, adapting our healthcare and education networks, developing some of our natural resources and opening up the North won’t be a step back, but a step forward towards something bigger
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