It’s not just about tuition
After five months of continuous student protests, it is time to admit that the problem of the "strike" or boycott is one which will never be truly solved by negotiation or concessions—how can one negotiate with professional “activists” who are so devoid of common sense and perspective that they can compare a one night stay in jail for blocking the streets to the struggles of Gandhi and Mandela or give Nazi salutes to the Montreal police as though they were the Gestapo? It’s also time to admit that the student conflict has long ceased to be about tuition rates or university funding. Rather, it is part of a much bigger battle that pits those, like the student leaders, who want to maintain the province’s decrepit 1970s social welfare model at all costs, against the politicians, like Premier Jean Charest and CAQ leader François Legault, who have come to recognize, however tentatively, that the status quo is unsustainable and that considerable sacrifices are going to be necessary to avoid the bankruptcy and economic stagnation currently afflicting Europe. Gabriel Nadeau Dubois, the leader of the radical CLASSE, has indicated on a number of occasions that he hopes that the protests will lead to a broader debate on the values and priorities of Québec society. For once, we agree with him.
Unfortunately, the politicians who preach the rhetoric of “responsibility”, as Premier Jean Charest did in a recent TV ad, are missing a golden opportunity to make the case for a real effort on the part of all Quebeckers to reform our bloated welfare state and culture of dependence on government handouts (of which heavily subsidized tuition is only one example) and put our fiscal house in order. Their failure to do so goes a long way towards explaining their discomfort and occasional incoherence in the face of the students.
The supporters of the strike can argue, with some justice, that the government is unfairly targeting young Quebeckers. A twenty something university graduate will pay higher tuition fees, taxes and pension premiums than her parents, while enjoying fewer services and less job security. The government seemingly has no problem asking her to make sacrifices, but would balk at the idea of cutting back on the pension and health benefits paid out to her baby boomer parents, especially if they happen to work in the public sector. Similarly, while the CLASSE proposal of free university tuition sounds ridiculous and overly expensive when considered in isolation, it is not necessarily more so than $7 a day nationalized daycare, a 20% pay increase for teachers, dirigiste schemes like the Plan Nord to take control of the natural resource sector, or the countless other spending programs proposed by the major parties during the last few years.
The Charest government is not in a good position to lecture young Quebeckers about “responsibility.” It was elected in 2003 on promises to “re-engineer” the Québec state by cutting bureaucracy and subsidies and using the savings to cut income taxes, reinvest in health care, and begin paying down the provincial debt. Almost a decade later, the provincial bureaucracy is bigger and more bloated than it has ever been while new interventionist subsidy programs like the “Plan Nord” and “Resources Québec” have proliferated. Spending has grown at least twice as fast as the economy in every year the Liberals have been in power while the debt is more than a third larger than it was when they first took office. They have consistently added as much as 10 billion dollars a year to the debt, but continue to pretend that their deficits are less than half that (they reported $2.5 billion this year) by counting only the deficit in direct program spending and moving parts of entire departments, like Revenue, off the ledger. The Charest government has repeatedly raised taxes and fees, by over $4 billion in the last three years alone. Massive injections of federal and provincial funding into health care have yielded no significant improvements; wait times of up to 24 hours are not uncommon in most hospital emergency rooms.
As a result, Québec is now the fifth most indebted jurisdiction in the Western world and is closing in on insolvency. A low birthrate and negligible immigration will make it even harder to escape the fate of Greece; by 2025 there will be one retiree for every two or three workers. One can’t help but feel some sympathy for the protesting students and for their classmates who did not vote to strike. They will be paying for the mistakes made by their parents when they were in their prime, and then handing over more than half of their paycheques to support them in their old age. If the government is going to ask them to tighten their belts today it should be prepared, as a matter of basic fairness, to follow its own advice.
The road to reform
Fortunately, there is no lack of solutions to Québec’s impending fiscal crisis, only a lack of common sense and political courage. It would be relatively simple to find the cuts necessary to eliminate the deficit in “program spending” and rein in the overall debt. Québec spends roughly twice as much per capita on business subsidies and tax credits ($4.3 billion or $544 per person) as Ontario does, without even accounting for the value of bailouts and loan guarantees to state investment agencies like Investment Québec. Ontario’s deficit cutting Drummond Report identified provincial business subsidies as being of little economic benefit and prime targets for elimination. Just by bringing its subsidies down to same per capital level as Ontario’s and dismantling Investment Québec, the Québec government could save close to $2.5 billion a year. Without having to cut core social services, it could eliminate many of the redundant structures that deliver them. Abolishing school boards and regional health agencies and replacing Quebec’s state run daycares with direct transfers to parents could save another $900 million. Crown corporations like the SAQ and Loto-Québec are ripe for privatization, while layoffs at Hydro-Québec and an end to subsidized utility rates for some businesses could yield at least an additional billion dollars a year in savings.
Finally, if Québec’s welfare state is to be sustainable in the long term, the Charest government must be prepared to make the kinds of difficult cuts and reforms that the Drummond Report recommended and which the Harper government has begun to undertake. That will mean freezing spending and making cuts to most government departments, shrinking a provincial bureaucracy that is over 20% larger, per capita, than Ontario’s, raising the retirement age for the Québec Pension Plan, and slowing the rate of growth in health spending (currently close to 5% annually) to economic growth so that it does not outstrip our ability to pay for it. It will also mean undertaking some long overdue economic reforms. Involving the private sector in the delivery of health care would make the system less costly and more efficient. Deregulating the construction sector and allowing out of province competition for government procurement and construction contracts would go a long way towards bringing down the costs of the infrastructure programs that are responsible for much of the current deficit.
We believe that these reforms are both necessary and inevitable. The only question is whether Québec’s political leaders will be prepared to make the hard decisions now or whether they will postpone the reckoning for a few more years, when the province will have become insolvent and its creditors will demand much harsher action. We are convinced that they must take action now. Only when they do so will they have the credibility and the moral authority to resolve the student crisis and win the battle against the forces of the irresponsible left—the péquistes, the unions, and the media—that have kept the protest movement alive for so long.