juin 06, 2006

Equalize this

On February 8, 1865, George Brown, who was then leader of the Upper Canadian Liberals and who formed, with John A. MacDonald and George-Étienne Cartier, a triumvirate in favour of the Confederation project, explained to the Legislative Assembly of the United Province of Canada one of the reasons of his support for Confederation:
We [in Upper Canada] have complained that immense sums of public money have been systematically taken from the public chest for local purposes of Lower Canada, in which the people of Upper Canada had no interest whatever, though compelled to contribute three-fourths of the cash. Well, Mr. Speaker, this scheme remedies that. All local matters are to be banished from the General Legislature; local governments are to have control over local affairs, and if our friends in Lower Canada choose to be extravagant, they will have to bear the burden of it themselves.

The point of Confederation was not only to unite the British colonies of North America under a single federal government, but also to separate the provinces of Upper Canada and Lower Canada, now called Ontario and Québec. But George Brown could not know that the rise of the modern Welfare State would bring back the kind of redistribution that he thought would disappear with Confederation. The recent comments of Ontario Premier Dalton McGuinty bear an eery resemblance to those of Brown 141 years ago:

Exasperated by recriminations from Québec, [Dalton] McGuinty argued that Ontarians should not assume, indirectly through equalization, the exorbitant costs of Québec's public services. He gave as an example tuition fees, which have been frozen for years in Québec but are higher everywhere else in Canada.

What the Premier of Ontario is insinuating is that Quebecers are living beyond their means. They buy themselves the best social programs, the largest civil service in the country, but when numbers do not add up anymore, they ask for help from other provinces.

According to the Constitution Act, 1982, the purpose of equalization is to allow provincial governments to "provide reasonably comparable levels of public services". But the government of Québec, and this seems to apply to other equalization-receiving provinces as well, apparently does not need all that help since it ends up spending proportionately more on social services than the government of Ontario.

But we need to be fair and recognize that Quebecers do shoulder the largest part of their own burden since they are "the most heavily taxed taxpayers in North America". And the key point is that the Constitution says that the purpose of equalization is also to ensure that provincial public services are provided "at reasonably comparable levels of taxation". The government of Québec does not need more money, but Québec taxpayers do need tax relief, and there is nothing in the Constitution that would forbid the federal government from granting an equivalent tax relief to the residents of the relevant provinces as a substitute to part or all of the amounts which are currently paid to each of the equalization-receiving provincial governments. Such a tax relief would probably do much more for the economic development of Québec and Atlantic Canada than have decades of the current equalization program. And while these provincial governments could in theory reoccupy all the fiscal room that would have been vacated by the federal government, which would leave us at the statu quo ante, they would have to do so in a transparent and accountable manner by justifying it to their citizens through the democratic process.

Some might protest that this would be a disfiguration of the equalization program. On the contrary, this would return equalization to its roots and as it was originally conceived by economist James Buchanan. When asked in 2001 whether it would be wiser "to transfer resources directly to the individuals in these regions instead of governments", Buchanan replied:

Yes. In my original analysis of this, back in 1948, I made that point quite specifically. From an ideal economic point-of-view, you would definitely have to give it to individuals. My scheme at that time applied to differential rates of income tax in different provinces. Once you transfer from government to government, you have another source of major inefficiency.
Le 8 février 1865, George Brown, qui était alors le chef des Libéraux du Haut-Canada et qui formait, avec John A. MacDonald et George-Étienne Cartier, un triumvirat pour le projet de Confédération, a expliqué à l'Assemblée législative de la province du Canada-Uni une des raisons de son appui à la Confédération:
Nous [Haut-Canadiens] avons eu à nous plaindre de ce que sortaient de la caisse publique d'immenses sommes destinées à des usages locaux dans le Bas-Canada et n'intéressant nullement le peuple haut-canadien, quoiqu'il ait à en fournir les trois quarts; et le projet, M. le président, remédie encore à cela. Le Parlement fédéral ne s'occupera aucunement d'affaires locales, qui incomberont à chacune des législatures provinciales; et, si nos amis du Bas-Canada jugent à propos de faire trop de dépenses, eux seuls en porteront le fardeau.

L'objectif de la Confédération était non seulement d'unir les colonies britanniques d'Amérique du Nord sous un même gouvernement fédéral, mais aussi de séparer les provinces du Haut- et du Bas-Canada, aujourd'hui appelées Ontario et Québec. Mais George Brown ne pouvait pas savoir que l'apparition de l'État-providence moderne réintroduirait ce genre de redistribution qu'il pensait faire disparaître avec la Confédération. Les récents commentaires du Premier ministre de l'Ontario Dalton McGuinty ressemblent étrangement à ceux de Brown il y a 141 ans:

Exaspéré par les récriminations québécoises, [Dalton] McGuinty a fait comprendre que les Ontariens n'avaient pas à assumer, indirectement par la péréquation, les coûts exorbitants des services publics québécois. Il a donné en exemple les frais de scolarité, plus élevés partout ailleurs au Canada, mais gelés depuis des années au Québec.

Ce que le premier ministre de l'Ontario insinue, c'est que les Québécois vivent au-dessus de leurs moyens. Ils s'offrent les meilleurs programmes sociaux, la plus importante fonction publique du pays, mais quand les chiffres ne concordent plus, ils demandent de l'aide aux autres provinces.

Selon la Loi constitutionnelle de 1982, le but de la péréquation est de permettre aux gouvernements provinciaux "d'assurer les services publics à un niveau de qualité [...] sensiblement comparable". Mais le gouvernement du Québec, et ceci semble s'appliquer aussi aux autres provinces qui reçoivent de la péréquation, n'a apparemment pas besoin de toute cette aide étant donné qu'il arrive à faire, toutes proportions gardées, plus de dépenses en programmes sociaux que le gouvernement d'Ontario.

Mais il faut être juste et reconnaître que les Québécois portent en vérité la majeure partie de leur propre fardeau étant donné qu'ils sont "les contribuables les plus fortement taxés en Amérique du Nord". Et l'élément-clé est que la Constitution dit que le but de la péréquation est aussi d'assurer que les services publics provinciaux soient fournis "à un niveau [...] de fiscalité sensiblement comparable". Le gouvernement du Québec n'a pas besoin de plus d'argent, mais les contribuables québécois ont besoin d'un allègement fiscal, et il n'y a rien dans la Constitution qui empêcherait le gouvernement fédéral de consentir un allègement fiscal équivalent aux résidents des provinces concernées en tant que substitut en tout ou en partie des montants qui sont présentement versés à chacun des gouvernements provinciaux qui reçoivent la péréquation. Un tel allègement fiscal en ferait probablement bien plus pour le développement économique du Québec et des provinces atlantiques que ne l'a fait le présent programme de péréquation pendant des décennies. Et bien que les gouvernements provinciaux pourraient en théorie réoccuper tout l'espace fiscal qui aurait été libéré par le gouvernement fédéral, ce qui nous laisserait au statu quo ante, ils auraient à le faire d'une manière transparente et responsable en le justifiant à leurs citoyens dans le cadre du processus démocratique.

Certains pourraient protester que ce serait une défiguration du programme de péréquation. Cela retournerait au contraire la péréquation à ses racines et telle qu'elle a été originellement conçue par l'économiste James Buchanan. Lorsqu'on lui a demandé en 2001 s'il serait plus sage "de transférer les ressources directement aux individus de ces régions plutôt qu'aux gouvernements", Buchanan a répondu:

Oui. Dans mon analyse originale faite en 1948, j'ai spécifiquement soulevé ce point. D'un point de vue économique idéal, il faudrait définitivement la donner aux individus. Mon plan, à l'époque, appliquait des taux différentiels d'imposition du revenu dans les différentes provinces. Dès qu'on fait les transferts de gouvernement à gouvernement, on se retrouve avec une autre source majeure d'inefficacité.


Publié par Laurent à juin 6, 2006 12:46 PM | TrackBack
Commentaires

If Quebeckers want lower taxes, they don't need Ottawa's help, nor do they need to cut back their social programs to get started.

The government of Quebec spends about $150 million a year on foreign affairs, hosting parties at their "embassies" around the world for God-knows-what purpose. The government recently announced that it will open more offices in India and China and expand some of its European facilities, so that amount is likely to increase significantly. This is a waste of money and an intrusion into federal jurisdiction. Get rid of it and cut taxes.

Revenue Quebec is another waste of money that, as far as I can tell, is of no value to Quebeckers. I don't know how much it costs, but I imagine maintaining Revenue Quebec is more expensive than letting Ottawa collect all the personal income taxes like every other province does. Get rid of it and cut taxes.

Then there is Culture et Communications Quebec. In the late 1990s, Louise Beaudoin bragged that her department spent over $800 million a year. I know many Quebeckers want their government to provide financial assistance to the province's cultural enterprises, but some of the waste in that department would make Chuck Guite blush. In fact, I recall Guite and ad execs telling Gomery that they were inspired by the PQ government's communications strategy. Scary. I don't know how much was cut by Charest, but knowing how weak-willed he has been in these matters, I suspect he could cut much more.

I haven't lived in Quebec for about a decade, so I'm not sure what other half-cocked bureaucratic nightmares were started up by the PQ and PLQ since I moved to Ontario, but I'm sure they exist. Get rid of them all and cut taxes.

Other equalization-receiving provinces have managed to cut their taxes and maintain or improve their social services. Even Saskatchewan's NDP government cut its corporate income taxes in its last budget. The government of Quebec should make a real effort, not another timid 'reingenerie' farce, to rein in its public service and cut back on all the waste and duplication that appears to be unique in scale to that province.

Some Quebeckers like to talk about their sovereignty, well it's time for them to exercise it and take the first step towards getting out of the mess they created. Until then, I think it is unfair to let Quebeckers off the hook because the governments they elect choose to spend large amounts of money on programs and services that every other province seems to do just fine without.

Écrit par: Ed King à juin 8, 2006 10:27 AM

Um.

The Premier of Ontario is Dalton McGuinty.
David is an MP from Ottawa South and the brother of Dalton.

Écrit par: Randy à juin 11, 2006 12:15 AM

Right. The Journal de Québec article misspoke and the original post has been corrected.

Écrit par: Laurent à juin 11, 2006 03:57 PM

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